Review of Procurement

Background

Effective procurement is a key means of:

• securing value for money
• managing risk; and
• reducing the risk of impropriety.

The States have recognised that procurement has the capacity to deliver substantial savings. The States:

• established a central procurement function within the States Treasury
• issued a Financial Direction (FD) on procurement; and
• set a target for procurement savings of £6.5 million as part of the Comprehensive Spending Review (CSR). A report to the Public Accounts Committee in January 2013 reported the attainment of savings of £3.0 million.

Scope

The review considers:

• whether procurement arrangements meet with recognised best practice, taking into account the circumstances in Jersey including the broad range of services provided
• whether Financial Directions for procurement are complied with; and
• the effectiveness of the identification and monitoring of savings.

The review focusses on higher value procurement processes (over £100,000) but does not extend to:

• procurement of major capital projects; or
• evaluation of the attainment of the target for procurement savings in the CSR.

Conclusions

There are areas of good practice and some considerable developments since the central procurement function was established. However, good practice needs to be consistently applied across States departments and the Corporate Procurement Strategy needs to be updated in light of experience and changes in the environment.

Learning from different procurement exercises, coupled with feedback from contractors, will promote good practice, potentially help streamline processes and reduce the risk of mistakes being repeated. Learning should be shared across the States in a structured way to strengthen the role of the central function and help individual departments achieve value for money from their procurement.

There is scope to improve processes for estimating and monitoring the delivery of savings.