Office of Government Commerce - UK HUGH BARRETT Chief Executive, OGCbuying.solutions EU Procurement Learning Lab Friday, 28 November 2003
VALUE FOR MONEY 2 Agenda Introduction to UK Public Sector Purchasing Cross Public Sector deal with Microsoft Government Procurement Card
VALUE FOR MONEY 3 Introduction Size of UK Public Sector Market Purchases CCG (England) - €19b Ministry of Defence - €14b National Health Service - €16b Local Government - €37b
VALUE FOR MONEY 4 Office of Government Commerce Created in April 2000 Office of HM Treasury Supervisory Board
VALUE FOR MONEY 5 OGC’s Purpose and Agenda OGC’s vision is to work with Central Civil Government as a catalyst to achieve best value for money in commercial activities
VALUE FOR MONEY 6 OGC’s Objectives: From 1999 – 2002 € 1.43 billion value for money improvements. From 2002 – 2006 Deliver € 4.29 billion of value for money gains in civil government procurement through the Office of Government Commerce Agreed measurement methodology Departments can keep their contribution
VALUE FOR MONEY 7 Major Issues Improving Delivery Small and Medium size enterprises “e” Agenda
VALUE FOR MONEY 8 OGCbuying.solutions is a trading arm of the Office of Government Commerce. Agency’s role is to deliver value for money gains for the public sector Manage €2b of public expenditure through central arrangements Realising €233m of savings to the public purse in 2002 OGCbuying.solutions
VALUE FOR MONEY 9 Aggregate demand to save public money and lower cost of sale for supplier Voluntary agreements, not procurements Specify pricing and terms for whole public sector Operate within existing contractual and procurement frameworks What are Memoranda of Understanding?
VALUE FOR MONEY 10 Signed in February 2002 for 3 years Specifies pricing and terms on Enterprise Agreement 6.0, Select Agreement 6.0 and Software Assurance 3 year payment schedule on Enterprise licenses Savings to date are €71.5m over pre-MoU pricing Covers up to 1.5 million desktops The Microsoft MoU
VALUE FOR MONEY 11 GPC 1 launched in 1997 Originally available to all Central Civil Government Departments Visa Purchasing card Method of paying for “low value” goods and services Visa Corporate Card – Travel and Subsistence Original contract let for 5 years and expired January 2003 GPC 2 contract let in February 2003 Government Procurement Card – History
VALUE FOR MONEY 12 Savings Process efficiency savings = Time / Environment / Monetary KPMG Analysis 1997 Review of all Central Government Departments Average savings figure = €40 per transaction
VALUE FOR MONEY 13 How does GPC save cost?
VALUE FOR MONEY 14 Growth of GPC: Spend & Savings
VALUE FOR MONEY 15 GPC 1 Key Aims & Achievements Aim:To achieve €430m spend by December 2002 Achieved:€580m cumulative spend Aim:To process 2.5m transactions by December 2002, resulting in a process efficiency saving of €100m Achieved:€110m in process efficiency savings
VALUE FOR MONEY 16 The New GPC 2 Contract EU compliant competitive tender resulted in VISA and a consortium of 7 issuing banks being awarded new GPC Contract New GPC Contract commenced February’03 for 5 years, with option to extend for further 2 years Now open to wider Public Sector Target spend - €6.4b €2.1b in Central Civil Government €4.3b in the Wider Public Sector
VALUE FOR MONEY 17 Why the Success? Strategic Benefits Although Non-Mandated it has been successful because: Link to the Modernising Government Agenda Gives financial transparency and accountability Helps to meet the Prompt Payment Initiative Helps to adhere to Late Payment Legislation Most cost effective “e-payment method” Drives out inefficiency Endorsed by the Treasury Chief Minister Saves cost
VALUE FOR MONEY 18 Environmentally Friendly Every transaction saves at least 6 pieces of A4 paper 11,500 pieces of paper = 1 tree WHICH MEANS THAT…… Over 2,000 trees saved in UK to date