We manage 33 whole-of-government Common Use Arrangements (CUAs) through which approximately $1 billion of expenditure is entered into annually. We leverage our strong buying power to deliver value-for-money to the community.
Finance is the leader in government procurement or “buying” on behalf of government.
A key function of a CUA is the opportunity to substantially reduce the administrative cost and duplication for 139 public authorities and other government entities, which access the CUAs. Additionally, CUAs offer government protection with consistent and well-established terms and conditions to mitigate financial, legal and reputational risk.
Central to our ability to generate savings and accommodate changes in the market place is the evidence-based advice we provide to government via business intelligence tools. Details about this initiative are available here.
CUAs – savings for WA
Finance has generated savings through CUAs again this year. Across the 2018-19 period, CUAs have saved the WA Government approximately $202 million through lower priced goods and services.
One example was a new electricity contract that extends across 81 Public Transport Authority (PTA) sites including train electrification networks, train stations, bus shelters, and car parks.
Finance developed a pricing framework and contract term structure, which was the catalyst for competitive tension between CUA suppliers. Following a pricing analysis of quotes by Finance, PTA awarded the contract under the electricity CUA, which achieves:
- a saving of $35 million over the contract term (five years), when the current spend ($167 million) was compared to forecast spend under the new contract ($132 million);
- the option to roll in newly constructed sites (for example, METRONET) under the same discounted rates;
- a single supplier arrangement resulting in administrative efficiencies; and
- an electricity contract with terms and conditions, which favoured the PTA more than its previous arrangement.
Finance also saved an estimated $714,511 in the reticulated gas contract for the South Metropolitan Health Service, reducing current contract rates by nearly 42 per cent.
Through site and consumption analysis followed by a thorough pricing evaluation, Finance was able to recommend awarding a two-year contract to a single supplier. The contract was awarded by the South Metropolitan Health Service in March 2019.
Finance gets tick of approval from customers
It is worth noting Finance’s CUAs offer more than just savings to its customers. Externally conducted satisfaction surveys from the last four years confirmed:
Agency Procurement Services client satisfaction results also illustrate the calibre of Finance staff in the delivery of procurement services.
The latest survey results from March 2019 confirmed that 95 per cent of respondents were satisfied with the level of procurement knowledge and expertise and 97 per cent of staff demonstrated a professional approach to procurement.
One of the key learnings was that our clients would like us to engage with them face-to-face and better explain procurement processes – feedback Finance will look to action as it adapts its services over the coming year.
This year saw significant changes to the State Government fleet with agency vehicle fleet caps to reflect each agency’s actual fleet size as at 1 January 2019. This saw a total cap reduction of 572 vehicles.
Additionally, a review of vehicle usage levels was undertaken, which identified 211 of the Government Vehicle Scheme (GVS) vehicles in the metropolitan area were underutilised. These vehicles will be progressively removed from the fleet from 1 July 2019, generating savings of $1.1 million annually across government.
Finance has been trialling telematics (in-vehicle monitoring systems) technology and a Poolcar shared booking system within its own fleet. It is now facilitating the implementation of this technology across government, which will improve fleet utilisation data across the sector and enable government to identify further opportunities for fleet efficiencies.
Ultimately, the indicative annual whole-of-life cost of the fleet has reduced from $119.3 million to $99.6 million – a reduction of $19.7 million per year. The reduction is a result of longer vehicle lease terms, lower fringe benefits tax and from savings on operational fleet costs.View Case Study