STATE bodies buy about €15 billion worth of goods and services every year and significant savings could be made by tighter management of state purchasing. This was the key message at the Forum on Public Procurement (FPP) Conference held in Dublin this week.

Last year most policy focus was on cutting the €20bn state pay bill and introducing a pensions-related levy but little attention has been paid to securing value for money in purchases apart from the general imposition of an 8% claw-back on professional services tenders.

The embargo on public appointments has limited the availability of procurement expertise in many state-funded organisations and inhibits supply-chain management according to some participants at the conference.

Vincent Campbell, director of the new National Public Procurement Operations Unit detailed plans to launch a new version of the government’s E-tenders website before the end of this year. It will include new standardised terms and documentation for procurement by all government departments, local authorities, and the health services.

18% of Irish public service contracts go to Overseas Suppliers

In an overview of European Union procurement practices, Niall Bohan of the EU Commission pointed out that the number of contracts awarded to companies based in other member states is only 3.4% of the 150,000 tenders advertised. Yet nearly 18% of Irish public service contracts go to overseas suppliers reflecting an openness far exceeding that of any other EU state.

Various service providers highlighted the imbalance between price and quality considerations when assessing tender bids but welcomed the increased provision of detailed assessment and marking scores for unsuccessful bidders. In a dialogue, Cecil Ryan of OCS Ireland and Tony Redmond of the Rail Procurement Agency discussed the merits of having a Procurement Ombudsman to handle appeals or complaints by unsuccessful bidders and to monitor standards in the tendering process.

‘Daft’ ideas

Dr. Peter Brennan of Bid Management presented a rapid-fire 15 suggestions on handling significant infrastructural projects in imaginative ways of international tenders for investors who, in turn, subcontract parts of the national projects. These ranged from offshore wind farms, a national waste treatment facility, to a single contact phone number for essential services. Other suggestions included the provision of three or four national retrofitting contracts for energy savings and also provision of the much-discussed electronic delivery of welfare payments as well as an imaginative invitation to develop electric cars and batteries on a research project basis using Ireland as an international test laboratory.

Dr Brennan’s thought-provoking ideas came under the title of “Daft or Doable” inviting conference participants to think imaginatively about efficient tendering for large-scale  projects.

Better Procurement is a Key Component in Expenditure Control

UCD economist, Colm McCarthy noted that “better procurement is a key component in expenditure control” and added that much more outsourcing and use of shared-services  should be adopted in the public sector. He said that state agencies and semi-state companies had a passive attitude to their assets and need to review and sell properties which are no longer being utilised.

He warned against ambitions to return to the economic position of 2006 with ‘bubble’ valuations of property assets. Instead we need to rebalance the economy and must accept that recovering from a ‘bubble’ is more demanding than a cyclical recovery and will demand significant cuts in domestic costs for water, waste, energy, rents and government or local authority levies and not just wage rates.

Public Procurement Supports 250,000 Irish Jobs

FPP chief executive, Lionel McCarthy said that significant changes in the public procurement process can assist in restoring economic confidence, generate economic activity and offer innovative solutions benefitting the procurement professionals, Irish suppliers and ultimately the taxpayer.

Public procurement supports up to 250,000 jobs in Ireland, making it an integral and vital component of our society.  Mr. McCarthy added that some buyers may be over-relying on guidelines rather than adapting procedures to ensure value for money and minimize bureaucratic hurdles through, for example, settling a project price or budget in advance of an invitation for tenders.

For further information on FPP 2010 contact Gerald Flynn. Mob: 087 223 8562

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The popular RTE ‘Fair City’ soap has been dealt a dose of hard reality with pay cuts for the cast of popular actors whose  complicated lives of bed-hopping and brawls  entertains the nations most evenings.

Wage reductions of between 4.5% and  7% have been agreed with the cast members as part of RTE’s six-month drive to reduce its labour costs. But the impact on the cast will not be reflected in the episodes with pints still flowing freely around McCoys Pub and orders flying in the restaurant and coffee shop.

Most of the 50 actors are represented by SIPTU which earlier last summer, along with the  state broadcaster’s group of unions, agreed to salary reductions and cuts in basic rates. these ranged from around 2.5% for lower earners but with pay exceeding €500 a week.

Higher earners at RTE had 12.5% cut from the top of the salary scale while there is a general freeze on annual increments for 2009-10. Some of those on individual contracts  agreed to initial reductions but baulked at a second trance been taken from their pay packages.

Originally the ‘Fair City’ cast were  asked to accept cuts of  up to nearly 9% but this was scaled back in negotiations late last year.

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The escalating dispute between Irish Aviation Authority employees and the semi-state agency may set the tone for public sector employment relations over the coming months.

Impact, the largest public service trade union, responded swiftly to moves to suspend 15 members who refused to operate a newer system to monitor and control air traffic in Irish airspace.

Discussions last week at the Labour Relations Commission (LRC) failed to secure a compromise and the issue has been referred to the Labour Court.

Management contends that the new procedures are part of  normal air-traffic control work but there is a  backdrop of a union claim for a 6% pay rise based on the national ‘partnership’ agreement which has been either repudiated or abandoned  in recent weeks by its main participants.

It will be interesting to see how much management autonomy is allowed in this dispute by the Minister for Transport if industrial action is expanded from tomorrow’s (Wednesday, Jan 20th) planned four-hour ’stoppage’ for Impact consultations meetings.

Its 300 members at the IAA, who rank among the highest-paid public sector employees in the state (along with staff at ESB and Bord Gais) have not been affected by the public service pension levy or the cuts in standard pay rates imposed in Budget 2010 for the 315,000 public service employees.

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