Savings from New Zealand’s collective procurement surpass forecasts

10 Dec 15

All-of-Government procurement contracts will save New Zealand an estimated NZ$699m, almost NZ$300m more than previously forecast, Steven Joyce, the country’s minister for economic development, has announced.

New Zealand’s AoG approach to procurement establishes single supply agreements for selected common goods and services, accounting for around 2% of government spend. This harnesses the collective purchasing power of government and improves engagement with suppliers, ministers say.

In a statement, Joyce gave credit to the latter for the increase in savings – up from NZ$415m forecast in July – as well as greater efficiency and the implementation of more new contracts.

He said that 860 agencies are participating in one or more AoG contracts, including 500 schools, and embracing their availability has lead to “significant savings” in their procurements for products including IT hardware, office supplies and advertising.

Initial AoG contracts for vehicles, IT and printing hardware and office supplies delivered savings of more than NZ$130m. These have recently been retendered and are now projected to save an additional NZ$168m.

Suppliers are benefiting too, he added, as the diversity of the supplier base has given companies of all sizes the opportunity to pitch for government business.

AoG procurement is one component of New Zealand’s Procurement Functional Leadership programme, which was set up in 2012 to build procurement effectiveness across the public sector.

The government also recently announced an AoG approach to banking services, which is expected to deliver NZ$120m across its eight-year lifespan in addition to significant productivity gains for government agencies.

  • Emma Rumney

    Emma is a reporter at Cooking Recipes International. She also writes for in the UK.

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