Minister: Procurement & Framework Agreements

December 7, 2018 | 2 Comments

“The Public Service is now taking the necessary steps to implement procurement strategies that leverage the Government’s purchasing power, maximise efficiencies, and achieve cost savings,” Minister for the Cabinet Office Walton Brown said in the House of Assembly today [Dec 7].

In providing an update on the implementation of the Code of Practice for Project Management and Procurement, the Minister said he will “focus on work that is being undertaken to implement framework agreements.”

“The administrative burden associated with the repetitive tendering processes throughout Government has proven time and cost prohibitive and contributes to ongoing inefficiency,” Minister Brown said.

“The advantages to the Government of using framework agreements include less downtime between identifying a need and fulfilling it; a reduction in administrative costs with removal of the full procurement process for every requirement; and potential savings with economies of scale in that suppliers may offer more competitive prices.

“Suppliers will also benefit from the introduction of framework agreements with the reduction in the administrative burden due to a streamlined procedure in working with the Government.

“Framework agreements save time. This is especially true for relatively simple, frequently repeated purchases, such as office supplies.

“Framework agreements will allow the Government to choose suppliers that offer long-term value, so as to reduce overall procurement costs and save internal resources. The Government will also have certainty as prices are set for the duration of the term of the framework.

“Framework agreements provide for the implementation of processes that promote agility, enabling public officers to react and adapt optimally in a speedy and cost effective manner, whilst maintaining good governance practices.

“Mr. Speaker, this Government will continue to focus on maintaining internal efficiency and effectiveness by implementing processes and policies established to drive accountability of all public officers. Our vision is a future-forward Government for the people of Bermuda.”

The Minister’s full statement follows below:

Good morning, Mr. Speaker.

I rise today to provide an update to the Members of this Honourable House and the people of Bermuda on the implementation of the Code of Practice for Project Management and Procurement.

In particular, I wish to focus on work that is being undertaken to implement framework agreements.

Mr. Speaker, the Code of Practice for Project Management and Procurement was implemented on July 2, 2018.

Accordingly, the Public Service is now taking the necessary steps to implement procurement strategies that leverage the Government’s purchasing power, maximise efficiencies, and achieve cost savings. To this end, the Government is identifying opportunities to aggregate purchases and negotiate favourable rates.

Mr. Speaker, the Code, in accordance with Section 35, Framework Agreements, sets out conditions for the use of framework agreements by public officers when the Government wishes to contract for the provision of goods and services.

Mr. Speaker, a framework agreement maximizes economy, efficiency and effectiveness in procurement. It consolidates the Government’s buying power and gives public officers the flexibility to order goods and services from private sector suppliers without going through the full tender application process more than once during a defined period. This, as opposed to each Department and/or Ministry undertaking a tendering process to acquire the same goods and services for their individual shops.

The administrative burden associated with the repetitive tendering processes throughout Government has proven time and cost prohibitive and contributes to ongoing inefficiency.

Mr. Speaker, when setting up a framework, the Government, via the Office of Project Management and Procurement, will run a full procurement exercise to select suitable suppliers and set terms and prices for a period. The suppliers are awarded a place on the framework agreement and individual Departments and Ministries will not have to engage in any further tendering for the relevant product or service during the term of the agreement.

Mr. Speaker, at present, framework agreements are being developed for the procurement of commodities such as office supplies, uniforms, telecommunications services, and other standard operating products and services.

Mr. Speaker, the Government will commence the implementation of framework agreements with mobile devices and services.

Mr. Speaker, in accordance with the Code, several months ago the Office of Project Management and Procurement used a restricted tendering procurement method to solicit quotations for the provision of a varied menu of mobile services. The objective of the solicitation was to secure fixed and preferential pricing from the carriers.

Mr. Speaker, in response to the solicitation, the relevant carriers developed specific packages based upon the services required by the bulk of the Government’s mobile users. Each service package takes into account cost savings initiatives such as the inclusion of overages in data usage management; a data provision to include free access to the Government and officially nominated sites; and the elimination of charges for overages. In order to determine the optimal combinations of services and prices, as part of the tendering process carriers were asked to submit their best and final offers.

Mr. Speaker, the terms of the framework agreement are now being finalized and it is expected that its use will provide for more efficient and cost effective purchases of mobile devices and services. The main purpose of this approach is to ensure that consistent and cost-effective rates are applied for the benefit of all Government’s mobile users. Device types will be standardized via bulk purchases of un-locked devices and devise usage will be managed in a further effort to control costs.

Mr. Speaker, the Government expects that it will have at least three [3] framework agreements for various products and services in place prior to the end of this fiscal year.

Mr. Speaker, the advantages to the Government of using framework agreements include less downtime between identifying a need and fulfilling it; a reduction in administrative costs with removal of the full procurement process for every requirement; and potential savings with economies of scale in that suppliers may offer more competitive prices.

Mr. Speaker, suppliers will also benefit from the introduction of framework agreements with the reduction in the administrative burden due to a streamlined procedure in working with the Government.

Mr. Speaker, framework agreements save time. This is especially true for relatively simple, frequently repeated purchases, such as office supplies. Framework agreements will allow the Government to choose suppliers that offer long-term value, so as to reduce overall procurement costs and save internal resources. The Government will also have certainty as prices are set for the duration of the term of the framework.

Mr. Speaker, framework agreements provide for the implementation of processes that promote agility, enabling public officers to react and adapt optimally in a speedy and cost effective manner, whilst maintaining good governance practices.

Mr. Speaker, this Government will continue to focus on maintaining internal efficiency and effectiveness by implementing processes and policies established to drive accountability of all public officers. Our vision is a future-forward Government for the people of Bermuda.

Thank you, Mr. Speaker.

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Comments (2)

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  1. Guy Carri says:

    Except who is willing to give volume discounts to an entity that takes MONTHS to pay their bills??!! Bigger sale, bigger outstanding balance, bigger financial hit to vendor = bigger wait time on payment??….

  2. Triangle Drifter says:

    Wait a minute. We heard all of this before from PLP version #1. What happened to it? How many times can you make grand announcements about GONNA DO the same thing & then do nothing.

    What company wants to do business with a Government which is notorious for delayed payment & is known to be in a very serious financial situation? They have a choice. Refuse to do business with Government or pad their bills sufficiently to cover extra expense incurred by a customer that delays payment.

    Here is an idea. Maybe they can withold tax payment, payroll, land tax etc. until Government pays for goods or services rendered.

    See how that goes over?

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