Improving Service Delivery Outcomes through Procurement

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Queensland Government Chief Procurement Office

• Greg Smyth
• Manager, Procurement Services

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Tough times - It is only a flesh wound!
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Todays message

• In the tough times
• better procurement will save you!

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What is procurement and where do we put the
effort in
Required change in effort to deliver value
Traditional level of effort applied
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Investing in managing procurement

• The Qld Government Procurement Reform Initiative
• Policy
• Plan
• Execute
• Measure
• Report
• Governance Procurement Board of Management
• Whole-of-Government arrangements
• Lead Agency Framework
• Agency procurement improvement
• Corporate Procurement Plans hands up if you
  have seen yours?
• Significant Procurement Plans

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Procurement reform initiative

• The procurement reform program was premised on an
  assessment that Queensland Government agencies
  procurement was generally good but there were
  clear opportunities to improve results from
  supplies and services and capital works.
• A five-year timeframe was given to build
  capability to the expected levels.
• Expected savings and other benefits in the order
  of 486 million per annum by 2011-12.
• Improved procurement practices helps agencies
  better manage the costs to the business.

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Procurement overview
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What do you need to make the tough decisions?

• Motivation
• Data/Information
• Strategy
• Skills

• Savings initiative
• Spend Data (SAP), vendor supplied data, market
  information
• Corporate Procurement Plan and Significant
  Purchase Plans
• Training new skills to meet changing challenges

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Motivation you want motivation?

• Global financial crisis
• Machinery of government changes
• Savings initiatives
• Efficiency dividend, productivity requirement,
  budget realignment, managing for outcomes,
  performance dividends

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• CBRC Decision No 2710, 1 June 2009
• Sharpened focus on procurement performance and
  reporting results
• Stronger mandate to use WoG procurement
  arrangements
• Agencies to review their procurement structures
  to ensure senior leadership is established to
  drive and manage the agencys procurement
• WoG e-procurement systems mandate

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Is it just plain old mind-numbing DATA or is it
a gold mine?

• It is the quality of data collected and the
  quality of the analysis of that data that has the
  biggest impact on the quality of the decision
• What gets done is what gets measured!
• The current Procurement Reform Initiative is
  leveraging on the governments improved data set.

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Strategy where do you get that from?

• A well developed strategy relies on good data
• Then there is analysis and decision making
• And finally the execution

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ICT contractors - one example of a strategyThe
current position

• Spend of 200 - 500 million pa
• More than 7000 contractors in the market
• Over 2400 contractors employed in government on
  FTE basis (230 days pa) about 30 percent of our
  total ICT workforce
• No visibility in the market
• More than 300 recruitment agencies many SMEs
  operating as recruitment agencies mates rates
• Variations from 20-40 per cent in agency fees
• Qld paying more for its contractors than other
  states

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How bad can it really be?
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Significant duplication in panels covering
similar suppliers and similar types of project
work
Source Agency Interviews
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What is the cost of doing business with
government?
Example Supplier panel arrangement vendor 3
out of 350
Panels
Agencies
Primary Industries Fisheries
Supplier
Information management and Information technology
services
Corporate Solutions
QTRY
Information technology contractor panel
arrangement
CLK
CorpTech
Information technology contractor resources
Natural Resources
Vendor3
Main Roads
Environment
Provision of information and communication
technology and system services
Health

• Impacts on supplier
• Increased cost to serve
• Inconsistent experience in dealing with
  government
• Increased costs passed on to government

Communities
Training
Supply of information systems and information
technology services
Tourism Wine
Source Data 3 Interview
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• The basics of the strategy
• Coordinate WoG demand
• Leverage WoG demand
• Standardise and simplify engagement
• Facilitate WoG governance
• Obtain appropriate quality resources at best
  value
• Simplify contact for suppliers
• Centralise performance management and reporting

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ICT contractors and consultants
Estimated maximum annual savings
Maximum Potential Savings
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ICT contractors and consultants
Estimated annual savings from current spend
Percentage conversion of contractors to FTEs, plus
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Benefits of whole-of-Government and QGCPO
approved lead agency arrangements

• Cash savings
• Reduced procurement process duplication
• Increased market significance of arrangement
• Wider non-Government and GOC use
• Reduced vendor costs in servicing government
• Specifications cover broader requirements,
  include sustainability and standard reporting
• Use standard terms and conditions
• Uniform vendor data requirements
• Procurement Advisory Committee for each
  arrangement ensures relevance to agency, GOC and
  council customers
• Central contract management

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Current arrangements

• Fuel
• Air Travel
• Office Furniture
• Disposal Services Auctioneers
• Salary Packaging Services
• Desktops, Portable Computers and Servers
• Business Machines (photocopiers and
  multi-functional devices)
• Safety equipment
• Tyres
• Auction Mart Services
• Rental of Motor Vehicles
• Records Storage and Retrieval

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New or revised arrangements 09-10

• ICT contractors and consultants
• Other contractors and consultants
• Finance, HR, Legal
• Office Supplies
• Office Furniture (including Project Furniture and
  School Furniture)
• Print Management
• Post
• Couriers
• Freight
• Electricity
• EAS
• Corporate Wardrobe

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Current projects

• ICT contractors ITO early in 2010
• Furniture released to the market
• Ad hoc/replacement purchases
• Office Accommodation and Project Services
  requirements
• Education requirements
• Office supplies combining existing arrangements
  and focusing on regional suppliers (ITO
  November/December 2009)
• Non-ICT contractors (ITO early 2010)
• Finance and accounting
• Human resources
• Strategic management
• Legal
• Communications and public relations
• Procurement
• Print Management Unit now in implementation
• Regional Procurement Sessions and local council
  liaison - ongoing
• Standard terms and conditions possible
  mandating to reduce risk to government
• GITC Review
• Lead Agency

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SKILLS What do you need

• Finance skills are a great start
• Project management
• Problem solving
• Analysis
• Communication - influencing
• Negotiation
• Leadership
• QGCPO Training Program Internationally
  recognised
• 4 levels
• CIPSA Program
• Degrees in Supply Chain Management Griffith,
  CQU and Curtain

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In tough times collaborate get involved
you are not alone

• There are savings and efficiency in
  collaboration.
• More whole-of-Government arrangements either
  formed by the QGCPO or by an approved lead agency
• Local councils, universities and other states are
  working with QGCPO on collaborative procurement
• So who are your service partners and are you
  working with them?

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Questions?

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