Centralised procurement Andreas NEMEC Sofia,

Establishing and Developing a CPB in Austria

Austria - Federal System  Federation: 3 levels of Government –Federal Government –9 State Governments (Länder) –2,100 Municipalities

PP Reform in AT Initial situation  Until 2001: Each ministry and subordinated authorities conducted procurement independently  Prices were higher than in the case of joint purchasing  Loss of synergies: each ministry had its own purchasing department  Comprehensive procurement reform in 2001

Objectives Improve efficiency of public procurement & reduce public expenditure  Getting best value for money  Optimizing purchasing conditions  Reducing administration costs  Enhancing transparency

Success factors in setting up BBG  Strong political will (all Ministries had to cooperate)  Project management  Goals, costs, milestones, project team  Change management  Organisational & legal aspects  Collaboration with stakeholders and open communication throughout the project  Phased process instead of “big bang”

3 Phases of the project 1. Data gathering 7

3 Phases of the project 2. Conceptual work Concentration of know-how and information –Purchasing groups –Economic operators –Procurement law/procedures Centralized system maintenance and user access common system management decentralized use of the system large procurements lead to ad-hoc cooperations common system management decentralized use of the system Know-how is bundled via procurement groups (decentralized) Decentralized modelShared service providerLead buyer model Pros highest concentration of know how makes best use of purchasing power Pros autonomy ensures high acceptance voluntary coordination Pros good concentration of procurement volume within procurement group higher acceptance since know how remains decentralized Cons Less acceptance since a lot of procurement activities are transferred from the line ministries to the shared service provider Cons insufficient concentration of purchase volume can lead to less purchasing power less knowledge of suppliers lack of –norms –standardisation Cons less knowledge about –suppliers –market definition und demarcation of procurements groups may be difficult; tendency of undermining Preferred due to highest savings potential

3 Phases of the project 3. Implementation process (quick wins) Complexity

Development of BBG BBG as supplier of framework contracts BBG on the way from supplier of framework contracts to service provider BBG as service provider in public purchasing Challanges  Struggle for survival  Assure availability of contracts  Drittkunden neu  Serviceorientierung lernen  Aufbau Vertrieb  Mehrqualitäten- strategie  Bund:Dritte = 50:50  Sicherstellung Vergaberecht  Sicherstellung Preis/Leistungs- verhältnis  Fokussierung  Bund:Dritte = ~ 40:60