Report of the Local Government Efficiency Review Group

9.2.4 The Local Government e-Procurement Strategy in 2003 projected
substantial financial benefits and savings, particularly through reductions in
transaction costs (from lower administration costs through standardisation,
streamlining and automation) and in unit costs (from leveraging buying
power and improved procurement practices), as well as reducing the
number of transactions and savings on logistics through reductions in costs
for storage and delivery. This strategy report was written with the
assistance of a cross-functional team comprised of local authority staff from
the e-procurement pilot sites of Cork County Council, Cork City Council,
Dublin City Council, and Kerry County Council, in conjunction with staff from
the Department of Environment, Heritage and Local Government and the
Local Government Computer Services Board. It was agreed that the
recommendations be implemented in a pilot site and Kerry County Council
developed an electronic procurement system called LAQuotes (see section
9.4).
9.3 International Experience with Procurement
9.3.1 Joint purchasing has become a common theme in many countries to
increase efficiency in local government and take advantage of purchasing
power. For example, key areas for collaborative regional procurement
between local authorities in Britain have included:
• Energy;
• Insurance;
• Vehicle fleets;
• Agency staff.
9.3.2 Part of this process of sharpening procurement practice involves building
capacity and support on best practice in procurement and category
management within the local government system, as well as introducing
low-value procurement cards to reduce the transaction costs associated
with processing invoices. A precursor to collaborative procurement is
communication between local authorities so that renewal dates for contracts
in high spending areas can be aligned between neighbouring authorities.
Other tools such as eAuctions (a kind of reverse eBay) have been
developed, with pre-qualified suppliers invited to offer improved prices and
other terms under an online auction.
9.3.3 In some cases, joint procurement has gone beyond the local government
system to include other public sector bodies based in different regions. For
example, there are increasing efforts to ensure joint public sector-wide
procurement agreements on energy. There are also examples of
collaborative procurement across public sector organisations in different
regions in the purchasing of transport vehicles involving local authorities, fire
authorities, police services, health services, probation services, and higher
education.
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