Headlines: July 25th, 2001

Failure to deliver Minister’s promises on e-procurement is a further example of the tortuous path from rhetoric to reality. March 2001 was the deadline for 90% of central government low value procurements to be carried out electronically. The Treasury estimate that departments are now about half way towards the target. This failure to deliver puts in jeopardy the Office for Government Commerce target to make savings of 1 billion pounds on central government procurement by 2005. Savings in the last three years
amounted to 100 million pounds.

A key weapon in the drive for e-procurement for low value items is the Government Procurement Card which is managed by the Office for Government Commerce in conjunction with VISA and its member banks. It is seen as a catalyst for change among Government buying professionals as it challenges the status quo and encourages suppliers to operate in a more efficient and cost effective way. The card was launched by the Treasury in October 1997. It was estimated then that savings from card transactions could amount to 70 million pounds annually when the five year contract ends in 2002. The actual saving in the first three years was 25 million pounds.

In 1999 the National Audit Office gave a warning of the need for a sea-change in approach to Government procurement if target savings of a billion pounds are to be met. It predicted that unless the Government set clear targets about ordering via e-commerce, most procurement staff would continue to use the telephone because it seems easier.