Brian Cowen (Laois-Offaly, Fianna Fail)

In recent weeks I held meetings with the Minister of State at the Department of Finance who has responsibility for the Office of Public Works at which we discussed the issue of procurement. The main aim of national policy on procurement is to achieve value for money while also having regard to probity and accountability. While price is very important in determining value for money outcomes in procurement and for certain categories of purchases in particular, it is not the only variable that needs to be considered. Value for money also encompasses non-cost factors. When making purchases of goods or services consideration should be given to whether they are fit for the purpose for which they are intended, whether the goods or services provided are of sufficient quality and whether the level of service or support provided meets the requirements.

There are other issues that should be also considered, including whole-of-life and transaction costs associated with acquiring, using, holding, maintaining and disposing of the goods or service. Value for money in procurement is, therefore, the optimum combination of whole-life-costs and-or price, where appropriate, and quality or fitness for purpose to meet the user's requirements.

The increasing complexity and importance of purchasing decisions by public bodies is leading to a need for a more strategic focus and improved management of the public procurement process. Effective and efficient procurement policy, procedures and practices by public bodies can have a significant impact on the accountability and value for money aspects of the purchase of goods and services by the State. The potential for real savings from more effective procurement policies and practices is significant. Achieving savings is important as it frees up resources which can be redirected to the provision of services within organisations.

Departments are required and expected to include procurement management reform as one of the key strategic priorities and aims in their statements of strategy or other key strategic documents. They are also expected to develop appropriate corporate procurement plans. On foot of the production of the latter, they are further expected to develop plans in respect of significant purchases.

The national public procurement policy requires each Department to prepare plans when making significant purchases of goods and services. These are purchases which have been identified by the purchasing body as being of high relative expenditure and or where securing supply can be difficult or is critical to the operation of the public body. Significant purchases can be characterised as those that represent the majority of a purchasing body's spend; they are generally complex in terms of demand and supply; and individually they can have a significant impact on a purchasing body's operation.

We are in the process of ensuring that all Departments are not simply acting individually but are pulling together where asked to by the OPW to ensure we get the best possible value for money for specific items. Categories targeted this year include advertising, clothing and footwear for Garda Síochána and Defence Force uniforms, energy, electricity, gas, liquid bulk fuels, liquified petroleum gas, fuel charge cards, IT consumables, office supplies, stationery, office equipment, printing and transport. All of this is being done.

To answer a previous question, my Department incurs operating expenditure across a range of goods and services such as travel, staff training and development, telecommunications, office equipment, maintenance of premises, information technology, library costs, consultancy, printing and other incidental costs. On average, these costs are approximately €3 million each year.

See this speech in context