Capacity And Capability Review Of Central Procurement Function

Author:Mr Aaron Boyle and Patrick McGovern
Profession:Arthur Cox
 
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On 6 September 2012, the Department of Public Expenditure and Reform published a report ("the Report") received by it from Accenture, which undertook a capacity and capability review of Ireland's central procurement function.

The Report conveys that Ireland currently spends €9 billion on supplier goods and services on an annual basis. The Report focuses on the €6.9billion of spend made on goods and services which it considers is "Addressable by Procurement", that is, could be reduced if reform is introduced in relation to how those supplies and services are procured. Of this spend, the health sector accounts for €3.1 billion, education €1.1 billion and local government €1.1 billion. Justice and Defence, combined, account for €647 million and other central agencies account for a further €890 million.

The Report identifies annual savings of between €249 million - €637 million as being achievable through adopting the various recommendations. Those recommendations can be summarised as follows:

The Report recommends the establishment of a hybrid centralised procurement operating model in a single location in Dublin. Under this model, there would be a new Chief Procurement Officer accountable for national procurement strategy policy implementation and effective compliance. The Chief Procurement Officer would sit at the head of a new agency – the New Procurement Office, under the aegis of the Department of Public Expenditure and Reform. The current National Procurement Service, National Public Procurement Policy Unit and Centre for Management and Organisation Development, which all currently perform certain centralised procurement functions, would all transition across to the new agency. A new Minister of State for Procurement position would be established within the Department of Public Expenditure and Reform and the Chief Procurement Officer would report to the Minister for State. The National Procurement Office functions will have three primary headings: Policy & Compliance, Strategic Sourcing and Category Management & Procurement Operations. The Procurement Board of the National Procurement Office would comprise representatives from each of the key procuring Departments at Assistant Secretary General level, to include the Department of the Environment, Community and Local Government, Defence, Justice and Equality, Education and Skills, Health as well as representatives from the Department of Public Expenditure and Reform and the...

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