Whitehall buying body takes an alternative approach

6 Jul 00
Government plans to introduce an 'electronic shopping mall' to buy stationery and other staple items through on-line catalogues have been abandoned.

07 July 2000

Instead, the Office of Government Commerce is to review 15 alternative models of electronic procurement to determine which is the most appropriate for the public sector.

Ultimately, different departments may adopt alternative electronic systems – not least because the OGC believes they can face contrasting problems.

In some, there may be cost advantages from reducing the number of suppliers. Elsewhere, increasing the number of potential suppliers may cut costs and improve standards by raising competition.

In an interview with Public Finance, OGC chief executive Peter Gershon also disclosed that he was in discussion with the NHS Supplies Authority and various local authorities' purchasing consortiums about joint procurement arrangements, possibly through electronic systems.

One of the sticking points of a public sector electronic procurement system is the question of which party will bear the costs of building the infrastructure.

There are no immediate plans to build an electronic procurement hub similar to those being adopted by several industries, including motor and computer manufacturers. These involve competitors creating common buying platforms, which can cut buying bills by 7% and transaction costs by as much as 80%.

Instead, pilot electronic procurement systems are to be established in several departments to see which work best. These will focus on reducing 'whole cycle' costs, by integrating buying, payment and accounting systems.

'As with any large organisation, the technology bit is easy – the hard bit is about the culture, the process, the integration with existing back offices,' says Peter Gershon. Departments will also be encouraged to use charge cards more extensively.

Gershon further disclosed that the OGC will promote the virtue of disposing of property portfolios so that office and other accommodation can be rented instead of owned.


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