Introduction

E ngā mana, e ngā reo, e ngā karangarangatanga maha o te motu, tēnā koutou.

For public organisations, delivering services well depends on doing procurement well. It is important that New Zealanders get the best possible outcomes from the significant public spending on goods and services.

New Zealanders expect that public resources, including taxes and rates, will be managed effectively and efficiently, competently, and with integrity.

This report introduces our work on procurement. Drawing from our audit work and conversations with people involved in public sector procurement, we summarise what we see as the main issues and opportunities for improving procurement practice in the public sector. It is our "conversation starter" for ongoing discussions with public organisations, people involved in procurement, and Parliament about where we want to add value.

In our view, the public sector still has work to do to improve procurement practices. Despite considerable focus on it, and despite improvements that have been made, we continue to see instances of procurement practice that give us cause for concern.

We will give special focus to procurement during the next three years. Through our work, we want to help improve how the public sector does procurement, including its planning of procurement, how procurement is carried out, and how it ensures that New Zealanders are getting the benefits from public spending that they expect and need. This will lead to stronger public accountability for the use of public funds and improved awareness about the implications of poor procurement.

We also want to help maintain the public sector's reputation for honesty and integrity. Poor procurement practices can erode trust and confidence in the public sector. Through our work, we want to support people involved in procurement to manage it well and in a principled way. New Zealand has a strong reputation internationally for transparency and a low level of corruption. We want to help keep it that way.

Public sector procurement also has to work well for those who supply the goods and services. There need to be robust processes that support appropriate accountability for public expenditure without hindering innovation. A competitive market that does not impose unnecessary costs on suppliers needs to be maintained.

Leadership is an important element of public sector procurement. We will look at the Ministry of Business, Innovation and Employment's leadership role in public sector procurement, including what it does to support effective and efficient procurement and develop procurement workforce expertise and capability. We will look at the Government Chief Digital Officer's leadership role in information and communications technology procurement.

We will focus on procurement that is critical to improving outcomes for New Zealanders. We will look at the governance, management, and effectiveness of procurement in procurement-intensive public organisations and in high-spending areas. We will also look at procurement approaches that intend to achieve increased efficiency and innovation, including the use of all-of-government contracts, panels of suppliers, and public private partnerships. We are interested in how risks are managed where there is a dependence on suppliers of critical services.

Although we have planned a three-year programme of work, we will continue to review our programme to ensure that it reflects emerging findings and risks.

To get the best possible results from our work, we will communicate with and involve, as much as we can, public sector staff, procurement professionals, suppliers, and Parliament. As well as publishing the findings from our audit work, we plan to try new ways to ensure that our work makes a positive difference. This is likely to include directly taking our concerns and what we learn about good practice to specific audiences, speaking with groups of stakeholders at relevant conferences and events, and publishing our work and ideas in a range of media.

We encourage your input at all stages of our procurement work.

Nāku noa, nā,

John Ryan
Controller and Auditor-General

21 September 2018

Photo acknowledgement: mychillybin © Lakeview images