The Austrian Federal Procurement Agency Practical experience of Austria with collaborative purchasing Prague, 29 April 2016 Dana Mitea Legal Advisor Head of Department for International Cooperation

Content  Overview Public Procurement in Austria  Federal Procurement Agency (BBG)

Austria – Federal System  Federation: 3 levels of Government –Federal Government –9 State Governments (Länder) –2,357 Municipalities

Institutional System- Main Stakeholders  Federal Chancellery: drafting legislation, information functions  Federal Procurement Agency (BBG): central purchasing body for the Federal State of Austria to execute procurement (bundle, standardize etc.)  The Court of Audit: controls the necessity (as such) and the concrete conduct of public procurement procedures  Federal Administrative Court: review body for entities at federal level  Regional Administrative Courts: review body for entities at regional level (one for each of the nine Austrian provinces).  Supreme Administrative Court: second instance

Institutional System- main Stakeholders  Auftrag.at: tender database  Lieferanzeiger.at: online tool for creating and publishing tenders for public procurement  The Austrian Register of Tenderers (ANKÖ) supports public procurement procedures - in favour of contracting authorities, tenderers and candidates. It provides online services for searching and executing tender procedures. (pre/post evaluation of bidders)  Other CPBs: –ASFINAG Austrian Motorway and Expressway Network Operator –ÖBB Austrian Federal Railways –BIG Federal Real Estate Company

Content  Overview Public Procurement in Austria  Federal Procurement Agency (BBG)

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

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”

Federal Procurement Agency act as Central Procurement Body  Established by law: Federal Procurement Agency Act 2001  Portfolio assigned by Decree (Minister of Finance)  Awards procedures based on Federal Procurement Act

 Federal entities are obliged by law to procure defined goods and services 1) through the Federal Procurement Agency (BBG).  Other public entities 2) can use the services of the BBG but can also procure by themselves.  When purchasing, all public entities are bound to the rules set in the Austrian Public Procurement Act. 1) procurement of non-military goods and services, (except construction) 2) Other public entities: Municipal or federal state authorities as well as entities financed by such authorities or being governed by or under the supervision of these authorities Impact on Austrian Public Procurement Sector

Our Objectives & Goals  Optimizing purchasing conditions & getting best value for money  Reducing legal risks  Contributing to a effect-oriented, efficient and transparent administration  Optimizing procurement processes by means advanced IT  Allow Ministries to concentrate on their core businesses Improve efficiency of public procurement & reduce public expenditure

Our Solutions  Bundling public demand & joint tenders for framework agreements  Standardisation of goods and services  Making framework agreements available to the entire public sector  Optimizing public purchasing procedures by providing comprehensive e-procurement solutions  Establishing an organization with procurement specialists (professionalization of staff) & consulting capabilities The Federal Procurement Agency was set up as a shared service provider

Areas of our Business  Procurement Over 1.4 Mio. products are ready to be bought by all government authorities and cover 12 product-families – such as IT, office equipment or cleaning services etc. Consulting  Projects on particular order by customers („PibA“) Consulting services in the fields of public procurement, procurement-organisation and in special product-ranges  e-Procurement Solutions Provision of comprehensive and integrated solutions covering the entire procurement processes („e-Shop“ and „e-Reisen“ and e-Invoicing gateway)

Advantages for all public authorities  Participation at a huge procurement market (volume approx Billion Euro) Optimal conditions (17.7% savings) 24/7 availability of goods and services No own tendering procedures  Reduction of process-costs Legal certainty No risk allocation Standardized, periodic processes

BBG: Procurement Service Provider Customers Suppliers Award procedures Ascertainment of requirements Supplier X Agency X Order Delivery Invoice e-Shop processing BBG

Σ-strategy BBG purchasing process documents publishing tendering phase opening of tender (negotiation) awarding close the tender customer info order approval confirmation delivery phases sub-processes process steps §-strategy e-strategy proc. strategy invoice reporting price adjustment quality management lessons learned sourcing supplier market need assessment

Total Procurement Volume & Savings Savings 2015: 269 Million Euro Procurement volume 2015: 1,27 Billion Euro Million Euro

Procurement Volume per Customer Group of BBG Million Euro Savings: 269 Million Euro Universities: 7% Health: 13% Provinces/Municipalities: 13% Spin-off companies: 22 % Federal customers: 44 % Procurement volume 2015: 1,27 Billion Euro

Procurement Volume per Purchasing Area of BBG

Share of SMEs 2014 The SME strategy of FPA ensures that 67% of all suppliers come from the small and medium enterprise sector.

Organisation and Staffing Organisation of institution (departments) Purchasing departments: Health and Services (8) IT and Mobility (15) Food and Furniture (9) Facility management and cleaning serv.(11) Travel management and Electricity (7)  Currently: 105 employees (99 full time equivalent) Support departments: Key account management (8) Marketing (2) I&T Management (15) Legal (5) Controlling (3) Human resources and Finance (5) International Affairs (2) Innovation (4) CEOs offices (2)

The constant growing number of customers, contracts and services is reflected in the growing number of employees. 2015: Out of 105 employees there are 99 full time equivalent. The ratio between men and women is well balanced. Employees: Moderate Growth

Legal certainty: 2071 to 24 Since its incorporation, BBG has concluded 2071 award procedures. Only 95 cases were appealed – with only 24 of these complaints being successful for the plaintiff.

Best marks for the service provider Customer satisfaction is of paramount importance for BBG. Once a year, BBG conducts a comprehensive customer satisfaction survey.

Procurers Handbook  Strategic project of BBG  First complete and detailed description of the procurement process incl. procurement strategies in over 300 pages  First handbook for public purchasing (in the EU)  One comprehensive document for all procurers  Basis for further optimisation of processes and also training of new employees

The secret of success for BBG We know the market We know our customers We master public procurement law Purchas e