Government Procurement Reform Programme

Government Procurement Reform Programme

Update Briefing - November

Agenda

• Cabinet report back

• Support structure

• All-of-Government Contracts

• Capacity building

• Next steps

Cabinet Report Back

October 2009

Key issues

• Funding

• Savings

• Ministerial intervention

Ministerial Directions

• Direct MED to report back to the ECC with

information on any Public Service Department or

State Services agency that wishes to opt out of,

or takes actions that may undermine the savings

available from an A-o-G contract approach

Ministerial Directions

• Agree that Public Service Departments and

State Services agencies transition to A-o-G

contracts as soon as possible from June 2010;

and that agencies should not enter into new or

extend existing arrangements that may

undermine the planned A-o-G contracts

Resources

• 09/10 - $3.0M

• 10/11 - $5.6M

• 11/12 - $5.6M

• 12/13 - $5.7M

• Out years - $5.7M

• Headcount increase

Funding/Savings

• Year 1 central funding

• Year 2 funded from savings delivered

• Agencies count savings against their individual targets

• On-going support dependent on benefits evidence

Support structure

Delivering procurement reform

Governance• Strategy

– Future direction, business participation

• Procurement Development– Technical support, sounding board

• Cost Savings– Contract strategy, scrutiny

• Client Groups– Service requirements, technical input

Advisory Groups - Invited

Strategy Development SavingsPhil O’Reilly Ron Stuart Ron Stuart

Laila Harre Ted Dean John Richards

Chris Morgan Brett Rigden Craig Williams

Andrea Gregory Colin Fairweather TBA

Peter Mersi Matthew Perkins David Scampton

Nicola White Alyson Moody

Bruce Wooller Steve Bickers

Peter Fehl

Team Leader appointments• John Ivil Manager AoG Contracts

• Paul Simonsen Team Leader - Vehicles

• Gareth Charles Team Leader - IT

• Neville Johnson Team Leader - Stationery

• Peter Cooper Team Leader - Capability

• TBA Policy Development

All-of-Government Contracts

Collaborate to deliver efficiencies

Contract areas

Spend Area Annual Spend

Desktop/laptop computers $58 Million + $20 MinEd

Vehicles $87 Million

Stationery $61 Million

Multi-functional Devices $20 Million

Summary Data

IT Equipment

Spend & Units by Sector – IT Hardware

Note: Number are rounded to $1M

Average Annual Spend

Average Annual Units

Desktops Laptops Desktops Laptops

Public Service $11M $6M 8500 3100

State Services $20M $7M 14600 3600

State Sector $10M $4M 6900 1800

Desktops: Total Spend over 4 Years

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

80% of total spend

2.0

4.0

6.0

8.0

10.0

12.0

$M

14.0

16.0

Pareto – Significant Procurers Desktops

Laptops: Total Spend over 4 Years

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,00080% of total spend

2.0

4.0

6.0

8.0

5.0

7.0

$M

3.0

1.0

Pareto – Significant Procurers Laptops

Desktop suppliers:

23%

14%

11%11%

10%

7%

4%

4%

3%

2%

11%

Dell

HP

Axon

Datacom

Gen-i

Cyclone Computers

Fujitsu

Silicon Systems

Acer

IBM / Lenovo*

Other

Laptop suppliers:

13%

13%

12%

12%6%

6%

5%3%

2%

1%

27%

Axon

HP

Gen-i

Dell

Datacom

Fujitsu

The Laptop Company

Cyclone Computers

Advantage Computers

Lenovo

Other

Summary Data

Vehicles

Spend & Units by Sector – Vehicles

Note: Number are rounded to $1M

24

Average Annual Spend (Millions)

Passenger Cars

4x4 Ute's Vans Total

Public Service $19 $2 $8 $3 $31

State Service $31 $3 $2 $5 $40

State Sector $5 $3 $4 $2 $14

Average Annual Units

Passenger Cars

4x4 Ute's Vans Total

Public Service 1000 100 200 100 1300

State Service 1600 100 200 200 2100

State Sector 300 100 200 100 700

Pareto – Significant Procurers Vehicles

25

$0

$10M

$20M

$30M

$40M

$50M

$60M

$70M

Vehicle suppliers:

26

18%

13%

11%

10%8%

6%

6%

5%

4%

4%

15%

Hyundai

GSB Supplycorp Ltd

Holden

Volkswagon

Toyota

Custom Fleet

FleetPartners

Local Car Dealers

Honda

Ford

Other

Spend & Units by Sector – MFD

Note: Number are rounded to $1M

24

Average Annual Spend Average Annual Units

Public Service $6M 900

State Services $10M 2200

State Sector $4M 300

TOTAL $20M 3400

MFDs: Total Spend over 4 Years

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

2.0

4.0

6.0

8.0

10.0

12.0

$M

80% of total spend

Pareto – Significant Procurers MFDs

25

MFD suppliers:

26

TOP 10 MFD Suppliers

13%

14%

8%

4%

2% 0%1%

25%

30%

1%2%

Konica Minolta

Ricoh

Canon

Fuji Xerox

Axon

Gen-i

Sharp

Datacom

Fujitsu

GSB SupplyCorp

Other Suppliers

Summary Data

Stationery

Spend by Sector – Stationery

Public Service $18M

State Services $32M

State Sector $11M

Average Annual Spend by Sector$61m

53%

18%29%

Public Service

State Services

State Sector

Current Stationery Supply

Public Service Spend

$0

$2

$4

$6

$8

$10

$12

$14

Public Service State Services State Sector

Mill

ion

s

Corporate Express

Office Max

Other Suppliers

Pareto – Significant Stationery Procurers

Annual Average Spend on Stationery

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

80% of spend

Breakdown of Agency Spend

SPEND AGENCIES TOTAL SPEND PERCENTAGE

0 - $100000 63 $2,380,470 4%

$100000 - $200000 31 $4,394,311 7%

$200000 - $300000 16 $3,973,490 6%

$300000 - $400000 14 $4,953,189 8%

$400000 - $500000 4 $1,820,514 3%

$500000 - $1000000 17 $12,651,614 21%

$1000000 - $1500000 5 $6,729,360 11%

$1500000 - $2000000 3 $5,333,960 9%

$2000000 - $2500000 2 $4,642,848 8%

$2500000 - $3000000 2 $5,363,474 9%

$3000000 + 2 $8,949,472 15%

  159 $61,192,701 100%

Data Set 2 - Surveys

• Desktops/Laptops 3 December

• Multi-functional devices 3 December

• Vehicles 17 December

• Stationery 17 December

All-of-Government Contracts

Challenges

Current challenges

• Change management

• Supplier conditioning

• Transition dates

Engagement

• Ministerial intervention

• Chief Executive engagement

• Work groups

• Supplier engagement

• Client Groups

Summary

• Generally strong support

• Few cases of undermining behaviour

• Testing reform resolve

• Ministerial intervention

• Savings = Investment in Procurement

Capacity & Capability Building

Resource, training & education

Skilled migration

• “Professional Procurement” NZIS

• Long term skills shortage register

• MCIPS qualified

• 5 Years experience

• Job offer not pre-requisite

• Prioritisation in process

Education• Year 1 focus on CIPS

• Year 2 broaden curriculum

• E-Learning Platform (levels 3, 4, 5, 6)

• Workshops (20 plus per year)– feasibility of pod cast under investigation

• Study Guides

Education• Pathfinder assessment to determine optimum

route for individuals• Offer up to 50 places Year 1, 100 by year 4• High subsidy (50-100%)• Details to be worked through with Development

Group• Finalisation/establishment work• Likely to start in May ‘10

Training• On the job training

• Scope to be agreed:– Procurement Introduction (101)– Procurement Leaders Event– Strategic Procurement– Negotiation

• Out to market soon

• Subsidised 50% to 100%

Conclusions

Procurement reform is happening

Conclusions

• Reform is happening

• Significant investment

• Generally good support

• Pockets of resistance

• Ministerial personal intervention

• Increase engagement

Government Procurement Reform Programme

Update Briefing - November