Strategic procurement (Report 1: 2016–17)

Procurement of services and supplies makes up a significant proportion of expenditure for Queensland Government departments. During 2015–16, 21 government departments and 16 Hospital and Health Services made around 2.1 million separate payments to procure about $10 billion of supplies and services from 33 903 suppliers (excluding capital spend). This is about 18 per cent of their total expenditure.

Accountable officers — usually departmental directors-general and agency chief executives — are responsible for carrying out their operations efficiently, effectively, and economically. This includes economy in procurement — the cost-effective acquisition of services and supplies of the right quality at the best price.

There have been several reviews into whole-of-government procurement between 2007 and 2012. Each review identified significant opportunities for departments to achieve substantial cost savings; however, while the public sector is better positioned to undertake strategic procurement now than it was four years ago, significant financial benefits have not been fully delivered. 

This audit examines whether Queensland government departments are enabling and achieving value-for-money procurement outcomes through effective strategic procurement. It also examines if sufficient measures are in place to develop the necessary procurement capability in the staff who work in this field, and whether good quality data is available.

Recommendations

In this report to parliament, we recommend that the Department of the Premier and Cabinet, Queensland Treasury and the Department of Housing and Public Works (DHPW):

1. work together to:

  • confirm the role and level of authority required by the Office of the Chief Advisor — Procurement to enable strategic procurement outcomes
  • assess the merits of retaining the role within the DHPW verses within a central agency.  

We recommend that the Office of the Chief Advisor — Procurement collaborates with government departments to:

2. develop a Queensland Government procurement planning guide that establishes better practice and defines the roles and responsibilities for creating category and agency procurement plans

3. develop a benefits realisation framework to ensure that departments consistently establish, measure, report, and validate benefits 

4. improve procurement capability in the public sector as part of its current program, and:

  • review, and agree with departments, the technical competency framework so that it includes all the skills a procurement professional needs to be effective, like data analytics and benefits realisation
  • review and update the procurement training needs assessment so it aligns to a professional accreditation scheme
  • implement a professional accreditation scheme for procurement staff in government to incentivise them to undertake certification and continue with professional development activities.  

We recommend that the Office of the Chief Advisor — Procurement and the Department of Science, Information Technology and Innovation collaborate with government departments to:

5. develop a procurement data strategy that identifies and assesses:

  • what procurement data government departments need to record
  • how procurement data should be categorised, ideally using a universally recognised categorisation approach 
  • cost-benefit of options for improving existing systems to improve the quality and accessibility of procurement data from a central source.

We recommend that all departments:

6. work with category leads to develop an agency procurement plan that includes, in addition to the QPP’s minimum requirements:

  • spend analysis by the categories established and agreed with the Office of the Chief Advisor — Procurement
  • their use of existing whole-of-government supply arrangements
  • agency-specific opportunities (economic, social, and environmental) to realise procurement benefits and reduce processing costs
  • measurable benefits targets (financial and non-financial) against realistic timeframes that departments set, but which align to whole-of-government category goals and objectives. 

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