Minister of State O’Donovan welcomes Office of Government Procurement Report

Minister of State with special responsibility for Public Procurement, Patrick O’Donovan TD today (19 September 2017) launched the Office of Government Procurement’s (OGP) Public Service Spend and Tendering Analysis for 2015 report.

This is the OGP’s third annual report that analyses expenditure and tendering activity on goods, services and minor works across public service bodies (PSBs) in Ireland.

This report analyses just over €4.5 billion – or three-quarters – of the estimated annual public procurement addressable spend under the remit of the OGP and its sector partners for 2015.

The report continues the work of the OGP in increasing openness and transparency on public expenditure. The analysis is encouraging, indicating that 94% of the state’s expenditure is with firms within the state.

Minister of State O’Donovan said:

To view the report, please click here.

ENDS

The OGP Business Intelligence team has now gathered considerable data from large public sector bodies. This Public Service Spend and Tendering Analysis for 2015 is the OGP’s third annual report that analyses expenditure and tendering activity on goods and services across Public Service Bodies (PSBs) in Ireland.

One of the OGP’s strategic objectives is to improve the transparency of spend across public service bodies to support more effective sourcing strategies, procurement execution and value for money.

The spend analysis in this report is based on expenditure data that has been gathered from 86 PSBs and excludes expenditure that is not addressable by public procurement such as third party grants or payments made by one public service body to another.

The procurement addressable spend, excluding major capital projects, under the remit of the OGP and its sourcing partners in the Health, Education, Local Government and Defence sectors is estimated at €6 billion annually. Three quarters of this estimated procurement addressable spend is analysed in this report.

The analysis of tendering activity is based on data from eTenders, the government’s national web-based electronic tendering platform administered by OGP, excluding semi-state organisations as these bodies are not under the procurement remit of the OGP and its sourcing partners.

Key findings of the Public Service Spend and Tendering Analysis 2015 Report:

Public Service Spend Analysis

• total value of 2015 spend analysed was €4.535 billion, a 15% increase on the 2014 analysed spend figure of €3.931 billion
• 94% of the 2015 analysed spend is within the State, a decrease of one percentage point on the 2014 report total
• medical, surgical and pharmaceutical supplies remains the largest spend area with 15% share of analysed spend
• as in 2014, the majority of the spend analysed is with SME’s with a slight decrease of three percentage points in the 2015 profile of SME to large suppliers to 52:48% from the 55:45% 2014 profile. A factor behind this movement is the majority of analysed spend from PSB’s not included in the 2014 report is with large suppliers
• the 2015 supplier profile of 11 of the 16 procurement spend categories remains predominantly SME (i.e. greater than or equal to the overall 52% SME share of spend)

Public Service Tendering Analysis

• the volume of published tender notices analysed has decreased by 7% to 3,836 from 4,121 in 2014
• the estimated contract value of 2015 analysed tender notices has increased by 33% to €4.747 billion from €3.561 billion in 2014 – mainly attributable to high value tender notices published for utilities
• the average estimated value of 2015 published tender notices analysed is €1.24 million as against €860,000 in 2014 while the 2015 median (typical) value remains unchanged from 2014 at €100,000
• 76% (2,916) of tender notices analysed are below the Official Journal of the European Union (OJEU) tender thresholds, accounting for an estimated value of €555 million. This represents 12% of all the 2015 published tender estimated values
• the utilities category accounts for the largest share (€1.144 billion) of the total estimated contract value of published tender notices with an average contract value of €71.5 million and a median (typical) value of €1.25 million
• the average contract value of 2015 tender notices analysed by category ranges from €71.5 million (utilities) to €140,000 (veterinary) while the median values range from €1.25 million (utilities) to €50,000 (marketing, print and stationery)
• the median contract value of 2015 tender notices is less than or equal to €100,000 in 12 of the 16 spend categories
• the volume of ‘in-year’ award notices published (i.e. award notices published in 2015 for tender notices published in 2015) has decreased by 22% to 846 from 1,087 ‘in-year’ awards in 2014. The total estimated award value from €506 million in 2014 to €1.793 billion in 2015 largely due to the utilities category
• total in-year award notices as a percentage of tender notices published has decreased from 26% in 2014 to 22% in 2015

About the OGP

• the OGP was established by the government to integrate procurement policy, strategy and operations into a centralised office with the aim of reducing procurement risk and enabling savings for public service bodies across the State. The OGP is headed by the government’s Chief Procurement Officer, and operates as an office of the Department of Public Expenditure and Reform
• the OGP is charged with leading procurement reform and building procurement capacity and capability along with sector sourcing partners in Health, Education, Local Government and Defence in a centralised procurement model for goods, services and minor works