Report of the Local Government Efficiency Review Group

(b) works. Minor works are contracted in accordance with these
procurement plans. These set out requirements to obtain competitive
quotations from suppliers for small contracts, with public advertisement and
advertisement on e-tenders generally for contracts above €50,000, as well
as compliance with the procedures required under the EU Procurement
Directives for contracts above the EU thresholds.
9.5.5 Materials are procured through a combination of written quotations, tenders,
e-tenders, LAQuotes, Low Value Purchase (LVP) cards and fuel cards. The
LVP card is a specific form of charge card for the purchase of low value but
frequently purchased goods and services. The card while similar in
operation to a credit card, has inbuilt limits on individual transaction value,
monthly combined transaction value and category of business in which it
may be used. The effect is to substantially reduce transaction costs thereby
providing a more efficient and cost-effective method of handling purchases
and the related payment procedures.
9.5.6 Almost two-thirds of expenditure under the heading of materials is spent on
roads, with the majority of the remainder spent on water services. The
principal materials used in roads are bitumen, road chippings, and road salt.
Road chippings are procured through LAQuotes, and bitumen and related
products through LABitumen (a specialist procurement vehicle for these
products as the price of these tends to fluctuate more regularly).
9.5.7 Road salt is bought by local authorities on an individual basis and annual
usage is about 50,000 tons at a cost of approximately €10 million. Due to
the severe weather conditions which affected Ireland in December 2009–
January 2010, there were difficulties in securing supply of salt. Many local
authorities were effectively placed in direct competition with one another
because of the high demand for road salt and a shortage of supply.
Because of this situation the procurement of road salt was moved on a
temporary basis to the National Roads Authority. The Group considers that
a repeat of this situation should be avoided and measures put in place to
move this procurement function to the National Roads Authority on a
permanent basis.
9.5.8 Chemicals, including aluminium sulphate, and fluoride for water treatment
are procured from LAQuotes.
9.5.9 All local authorities have tendered or are going to tender for their electricity
supply and contracts have been awarded to Bord Gais, ESB, and Airtricity.
In some authorities, all three are suppliers. Tenders were secured on a joint
basis, with counties grouping together to purchase electricity in the majority
of cases. It is estimated that savings of €5 million were made in 2009 due
to the tendering process and this is expected to rise to €10 million in 2010.
In addition, a number of local authorities have established joint energy
bodies to carry out energy audits, promote renewable energy and energy
efficiency, and reduce the carbon footprint of local government. Savings of
3% per annum are targeted for each of the next 10 years equating to €3
million per annum for local authorities.
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