1. Smarter buyer
Iceland
Gudrun Ogmundsdottir
15 May 2017

2. How the Icelandic gov. became better informed buyer
Governmental sector in Iceland and its challenges
Why public procurement is important
Why there was a need for structural and organizational change in the procurement system
What we did
The results
The way forward
What we learned and why it worked

3. Smarter buyer – joining forces and breaking silos in public procurement delivers better performance
Joining forces with the private sector
Developing procurement policy
Implementing the best practices and knowledge of the private sector
Improve procurement processes and deliver savings.
Benefit for private sector – more transparency
Breaking silos and joining forces across all government organizations in public procurement
Delivers better products/services at lower cost.
All agencies needed to take part

4. Procurement is an important tool governmental operation
Procurement expenditure
Public procurement large portion of governmental expenditure
Governmental expenditure 44% of GDP
Public procurement 18% of GDP
50/50 central/local government
30% of governmental expenditure

5. Why was smarter buyer important
Awareness that there were flaws in the procurement system and changes were needed
Agencies were not complying to the framework agreements
Not many tenders
Believed that the gov. was paying higher prices than other private sectors.
Increased media attention

6. Workgroup - Key Findings
Workgroup appointed by the Minister of Finance 2015
Public and private sector experts
The government had limited information about its purchases in many categories and little overview of savings opportunities.
Framework agreements did not provide the government the lowest possible price.
The procurement policy had only been written but not fully implemented.
Opportunities in place to acquire significant savings by using new “methods” in purchasing goods and services.
Er þessi setning kannski ný setning Lack of tools to exploit the full benefit of the procurement policy.?

7. Same product sold to agencies at different prices by the same supplier.
Highest
8.000
9.000
10.000
11.000
12.000
13.000
Avarage
Highest
+97%
TEXT
+68%

8. Work group recommendations
Implementation of long term procurement plans
Within all 160 agencies
Connect them with the implementation of the budget
Use strategicaly by informing the market well in advance about the State´s future needs.
Procurement procedures applied in a targeted manner
by a joint procurement, mini tendering and making agreements with fewer suppliers.
Improve IT-solutions for better overview of purchases and defining goals for optimization.
By optimizing the purchasing process, in line with private sector best practice, will lead to more efficient sourcing – quality goods and services delivered on time.
Create incentive programmes for agencies and suppliers

9. Implementation process defined in phases
Proof of project
Structural organizational changes implemented at central procurement New framework agreement.
Full roll-out e-procurement
Tasks force set-up within ministry
Greater steering + standards and requirement defined
Procurement officers across the system + private market
Joint procurement
Strategic use of procurement plans
Link budget to procurement plans
Set up procurement plans
E-procurement system pilot
More joint procurement
Need analysis e-procurement system
Comply or explain
Rautt alltof langt

10. Pilot project – joint procurement.
Lap-top computers Monitors Paper
-40%
-56%
-35%
48.379
37.736
-55%
-49%
-65%
67.969
16.700
Reg. Price
Best price
Joint procurement
Reg. price
Best price
Joint procurement
Reg. price
Best price
Joint procurement

11. Major challenges Lack of information
IT solutions
Capacity and culture in central procurement agency
Mobilize support across all 160 agencies

12. Main lessons learned. Implement changes with pilot projects
Importance of high level political engagement by minister
Policy was improved and co-developed by experts from the public and private sector
Private sector best practices can be beneficial in the public sector.
Easier to mobilize support for changes by focusing on low hanging fruits.
Benefits implemented early in the process – short time span from policy change is announced and results are visible.

13. Thank You Guðrún Ögmundsdóttir
Ministry of Finance and Economic Affairs
Icleand