Earlier this year, a research project into low value procurement in Australian Local Government was conducted. The objective was to provide insights into below tender threshold Council purchases and the associated risks. The resulting Whitepaper has now been published and was presented at the ninth annual Local Government Procurement Conference in Sydney.
The Whitepaper was commissioned by VendorPanel and produced by ArcBlue.
The research found that 80 percent of purchase activity occurs below the tender threshold; that 80 percent of Councils have numerous people at different levels managing quote processes; almost half of Councils use the procurement policy as the key mechanism to manage procurement risk below-tender; 93 percent of requests for quote are managed through a manual email process; and more than half said it is ‘difficult’ or ‘very difficult’ to demonstrate governance and probity in procurement below tender threshold.
On average, the Local Government sector spends up to $9 billion per annum on low value procurement (that which falls below the tender threshold) and conducts around 81,000 low value request for quote activities – an average of 145 events per council.
Daniel Fielding, the Director of ArcBlue said, “The project provided us with the opportunity to really look at the challenges faced by councils when managing their below tender threshold sourcing.
“It means that we can now quantify the risk to councils in below-tender procurement and provide options for councils to manage risk effectively.”
The research was commissioned by VendorPanel, an award winning procurement application used by hundreds of Governments, Universities, Utilities and Corporates.
James Leathem, CEO, Magnetized Markets, the developers of the VendorPanel application said, “I think most Councils intuitively know there are significant risks with procurement below the tender threshold, but with little current data or benchmarking it’s hard to substantiate and chart a way forward.
“We decided to commission some independent research to shine a light on the topic and try to quantify it. I think ArcBlue did a very good job and it’s great to see the positive response to the Whitepaper.”
The full Whitepaper is available from www.arcblue.com.au/white-paper-request-form/
