SME ACCESS to the Public Sector Market - South Mayo · 2014. 9. 15. · SME ACCESS to the Public...

SME ACCESS to the Public Sector Market

Mary O Halloran Office of Government Procurement 16th September 2014

Topics covered

•  1. Changing Landscape of Public Procurement

•  2. Initiatives to promote SME access the public

procurement market

Overview of Annual Spend

• EU: €2.4 trillion

• UK: £240 billion

• All-island: €14 billion (ROI reducing, NI

stable)

Establishing the Office of Government Procurement: Vision and Mission

• To deliver sustainable procurement

savings for the tax payer by optimising value for money across the public service

• Everybody will have easy access to high

quality procurement services that they have confidence in and that procurement staff are proud to provide

An Overview of Procurement

Reform

Operating Model

Agenda

Progress Update

An Overview of Procurement

Reform

Operating Model

Agenda

Progress Update

•  A  key  public  service  reform  programme  -­‐  to  reduce  costs  and  achieve  be4er  value  for  money  

through  reform  of  public  procurement   •  The  Office  of  Government  Procurement:  

–  launched  in  July  2013  –  operates  as  an  office  of  the  Department  of  Public  Expenditure  and  Reform,  with  its  own  Vote  

–  strong  governance  model  •  Savings  target  of  €500m  over  3  years    

•  Opera?on  of  the  new  model  commened  in  2014  

Drivers  of  the  Programme  

•  The  current  model  is  highly  fragmented  

•  We  have  limited  systems  and  data  upon  which  to  make  decisions.  

•  Government  strategy  is  to  …  –  centralise  procurement  more,    –  enable  consistency  and  standardisa?on  of  approach,    –  align  policy  with  opera?ons,    –  professionalise  and  modernise  public  service  procurement,    

–  deliver  be4er  value  for  the  tax-­‐payer,    –  deliver  broader  policy  goals  in  a  consistent  fashion.  

To deliver sustainable procurement savings for the tax payer by

optimising value for money across the public service.

Customers will have easy access to high quality procurement services that

they have confidence in and procurement staff are proud to provide.

Vision and Mission

An Overview of Procurement

Reform

Operating Model

Agenda

Progress Update

Common Policies Common Systems, Processes and Data

Management Common Governance

Office of Government Procuremen

t

Health

Defence

Education

Local Governme

nt

•  The Public Service will speak with ‘one voice’ to the market •  Common goods and services will be sourced from one office, formed

from resources who will come together from across the civil and public service.

•  Health, Education, Local Government and Defence will each retain a single sector procurement function to procure sector-specific categories.

Operating Model

OGP Led Categories Professional Services

Facilities Management and Maintenance

Utilities

ICT and Office Equipment

Marketing, Print and Stationery

Travel and HR Services

Fleet and Plant

Managed Services

Sector Led Categories Local Government

Minor Building Works and Civils

Plant Hire

Health Medical Professional Services Medical and Diagnostic Equipment and Supplies

Medical, Surgical and Pharmaceutical Supplies

Defence Defence and Security

Education Veterinary and Agriculture

Laboratory, Diagnostics and Equipment

The New Model

60% of

spend

OGP Led Categories   Sub-categories  Professional Services   Actuarial, Advisory, Architect, Audit, Banking, Communication, Creative Services,

Financial, Information Technology, Insurance, Legal, Public Relations, Quantity Surveying, Research, Temporary Staff/Contractors  

Facilities Management, Maintenance   Building Maintenance, Catering Equipment / Supplies and Services, Cleaning Equipment / Supplies and Services, Document Management, Fittings / Furnishings, Health and Safety, Laundry, Rental, Security, Sports Equipment, Uniforms / Clothing, Waste Management  

Utilities   Electricity, Gas, Fuels, Water  ICT and Office Equipment   Hardware, Software, Services, Telecoms – Data / Equipment / Mobile / Voice, Postage,

Couriers  Marketing, Print and Stationery   Advertising, Creative Media, Promotional Events, IT Consumables / Peripherals,

Marketing Printing, Office Printing, Office Supplies, Production Printing  

Travel and HR Services   Car Hire, Employee Assistance Programme, Health and Safety, Hotel / Meetings / Incentives / Conferences / Events, Pension, Recruitment, Travel Agency/Travel Services, Training, Transport–Air/Rail/Road  

Fleet and Plant   Equipment, Fuel, Maintenance, Other Plant (Lifter, Generator etc.), Vehicles Purchased, Vehicle Fit Out, Vehicle Rental/Leasing/Fleet Hire  

Managed Services   Outsourced Services

How Procurement is Changing

How Procurement is Changing Sector Led Categories   Sub-categories   Lead Sector  Minor Building Works and Civils   Building, Civil, Electrical, Materials, Mechanical,

Road  Local Government  

Plant Hire   Plant / Equipment Hire (including Driver / Operator)   Local Government  

Medical Professional Services   Carers (Disability Care, Senior Care), Care Services, Locums (Medical Professional)  

Health (HSE)  

Medical and Diagnostic Equipment and Supplies (including; Health Informatics)  

Medical Equipment, Medical Diagnostic Equipment, Medical Diagnostic Services, Health Information Systems  

Health (HSE)  

Medical, Surgical and Pharmaceutical Supplies  

Surgical Equipment and Supplies, Blood / Blood Products, Drugs and Medicines, Medical Gases  

Health (HSE)  

Laboratory, Diagnostics and Equipment (including; Health Informatics)  

Laboratory Equipment, Laboratory Diagnostic Systems and Supplies  

Education  

Defence and Security   Aircraft, Aircraft Maintenance Military Equipment, Military Equipment, Maintenance, Naval Vessels, Naval Vessels Maintenance, Ordinance Equipment, Other Military Supplies, Military Vehicles / Maintenance  

Defence  

Veterinary and Agriculture   Livestock, Feed, Consumables, Equipment, Other, Services, Supplies, Veterinary  

Education  

•  Objective is to deliver contracts that meet the needs of customer organisations and that deliver value for money for the tax-payer.

•  Aim is not to homogenise everything the public sector buys.

_________________

•  Role of Category Councils is decide the sourcing strategies for goods and services, taking into account customers’ requirements, market dynamics and the savings required.

•  Each Council made up of members who are nominated by the Departments and Agencies that are the main users of the category.

Customer Needs & Category Councils

Customer Needs & Category Councils

Budgeting and

Planning

Sourcing and Category

Management Contract

Management Requisition to

Payment

Responsibility Split

The procurement function will focus on market sourcing strategies and tendering, and will support internal customers in budgeting and contract management.

Responsibility Split

BENEFITS OF NEW MODEL

•  Cash savings

•  Administrative savings

•  Reduced duplicates of tenders.

•  Greater purchasing expertise

•  Improved consistency levels

•  Enhanced service levels

•  Legal certainty

Benefits of New Model

Benefits of

New Model

Reduced Costs through

demand / specifications /

price

Capacity & Expertise

Standardisation & Admin

Efficiency

Simplicity & Usability

Increased Certainty and Reduced Risk

Vehicle for Policy Goals

•  Lack of understanding of how the public sector buys

•  Administrative/Cost burden

•  Size of contracts

•  Disproportionate financial capacity requirements

•  Unclear award criteria

•  Lack of accessibility of public procurers

•  Absence of feedback

Perceived Barriers to SME’s

•  Government very conscious that SME’s are a significant driver in economic recovery

•  We have established an SME working group to reduce barriers for SME participation in public procurement

–  SFA, IBEC, ISME, CIF, Chambers Ireland

•  In April, we launched new instructions for public procurers (Circular 10/14) to assist in SME participation

–  it lowered guidance on turnover requirements, –  gave clarity to reasonable insurance requirements, –  promoted open tendering for contracts > €25,000, –  promoted lots and consortia building, –  requires contracting bodies to use e-tenders for contracts > €25,000

SME Involvement

•  We continue to drive pro-active engagement and education with suppliers e.g. ‘Meet the Buyer’ events and ‘Go 2 Tender’ training programme

–  delivered in partnership with InterTrade Ireland and Enterprise Ireland

•  We continue to standardise our tender and contract documents

•  We have commenced the process of transposing the three new EU Procurement Directives which were agreed as part of the Irish Presidency.

–  These contain many business-friendly obligations, –  The implementation of many of these we have already accelerated

through our Circular 10/14, –  Consultation with > 180 bodies commenced.

SME Involvement

An Overview of Procurement

Reform

Operating Model

Agenda

Progress Update

• Governance established with involvement from across public service at Ministerial, Secretary General and Senior Management levels. • Temporary HQ in Bishop’s Square with permanent location identified. Other offices in Trim, Mount Street and Cork. • Recruitment process at an advanced stage

ü  Staffing of OGP will be 231 people ü  151 staff: already on-board/selected ü  >50 roles: final stages of recruitment process

• Operation of the new model commencing in 2014.

Progress to Date

Initiation Planning & Scoping Implementation Operation On-going

Review

Procurement reform a key element of Government reform agenda with significant substantial savings targeted.

Policy and Operations are coming together into

one office. Government investing in procurement across the

public service through dedicated structures, increased professionalisation, and improving systems and data.

Key Messages

Key Messages

Dept. of Finance – Circular 10/14 to Address the Barriers Experienced by SMEs

1. Encourage buyers to divide contracts into lots where possible 2. Turnover twice value of contracts 3. Declaration & evidence at the award/shortlisting stage 4. No charging businesses to compete 5. Promote use of electronic tendering 6. €25K advertising threshold 7. Need for proportionality

Current Trends

1. Increase in legal challenges

2. Procurement expertise improving

3. Prices low and still falling

4. Greater collaboration amongst buyers

5. Expenditure falling

6.Contracts being split into lots

Challenges Going Forward

•  Education of suppliers in consortium building – appointment of consortia facilitator by InterTradeIreland & advanced Go 2 Tender programme

•  Consortia facilitator service – develop effective partnership

capability •  Recapture the lost GDP – Target the number of public

procurement contracts going to overseas firms •  Professionalisation of buyers – elimination of part-time buyers

SMEs Need to....

1. Be competitive & explain how they are so

2. Prioritise tendering to a board room level

3. Focus on markets & do their research

4. Understand what the buyer is looking for

5. Attend Meet-the-Buyer events

6. Partner to fill the gaps

Go-2-Tender Programe

1. 1300 SMEs to date

2. Some of these companies recently won

contracts valued at €60 million

3. Two day workshops and up to 3.5 days

support

4. Cost: €100 registration fee

Meet-the-Buyer Events

1. Belfast & Dublin events 22/10/14 & 12/11/14

2. 1200 plus SMEs attended

3. 5,000 plus buyer/supplier engagements

4. Contracts valued at €3 million

5. Unprecedented buyer access

Consortia Facilitation Service

1. To support SMEs form partnerships

2. Cross-border contracts: stepping stone to UK

£240 billion market

3. Innovative but necessary approach to

tendering

4. Identifying upcoming opportunities

5. Develop effective partnership capabilities

6. Bid support package

To conclude

i) Register with all relevant sites ii) Always submit a compliant, competitive and compelling tender iii) Review your project management iv) Remember tenders take time v) Always seek feedback vi) Learn from highs and lows

Any Questions?

Mary O Halloran mary.ohalloranl@opw.ie Office of Government Procurement September 2014