Room for improvement

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It’s now three years since Sir Philip Green found that different government departments were paying between £350 and £2,000 for the same laptop from the same supplier.

And while that lesson might have been learnt, it seems that there is still room for improvement.

In the wake of the Green report, the UK government set out plans to save £3 billion on procurement, including creation of a central team, named Government Procurement, to contract for widely used goods and services for the whole of the government.

However, a new study by accountants BDO for Procserve has found that public sector organisations could save millions of pounds simply by using internet procurement technologies.

For example, an organisation with a modest procurement budget (£100m), could save £2-3m just by moving its purchasing online.

Procserve was created in 2006 to develop and run the government e-marketplace. BDO studied the experience of Procserve’s clients from across the public sector. It found that the major price savings were achieved through bringing the best value deals direct to the buyers’ desktop and using electronic requests for quotation and mini-competitions for individual purchases.

Purchasing electronically from the best value contracts delivered average savings of seven per cent, while another five per cent of savings were achieved through electronic requests for quotation for one-off purchases.

Clearly, this is all good news for Procserve, but it also suggests that there is still plenty of scope for public sector organisations to make significant savings in procurement. At a time when budgets are being cut, that has to be worth exploring.

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