Appendix 1: New Zealand Government Procurement and Property

Using “functional leadership” to improve government procurement.

When it was first set up in 2012, NZGP had about 30 staff. It has grown over time. In April 2016, NZGP was renamed New Zealand Government Procurement and Property after the staff working on property functional leadership were transferred into MBIE. In this Appendix, "NZGPP" refers to New Zealand Government Procurement and Property.

From a functional leadership perspective, they have separate names:

  • New Zealand Government Procurement; and
  • Government Property Group.

New Zealand Government Procurement and Property's structure and staffing in 2018/19

Figure 1 shows the teams that make up NZGPP, summarises their responsibilities, and reports the staffing headcount as at 30 June 2019. Some teams (such as the Legal, Policy, and Enabling Services teams, and Other) support procurement and property functional leadership. The current structure was put in place in July 2017.

Figure 1
Structure of New Zealand Government Procurement and Property, summary of responsibilities, and staff numbers, as at 30 June 2019

Teams Summary of responsibilities Staff numbers
Delivery Services Develop commercial strategies, market engagement, sourcing activities, and contract and supplier relationship management for all-of-government contracts.

Property, planning, and advisory services, and key property projects.

All-of-government risk financing and insurance.		 59
Capability Services Manage the PCI, significant service contracts framework, graduate programme, social services procurement capability, and other capability development work aimed at improving commercial acumen within public organisations.

Provide advice and support to public organisations on significant procurement plans and collaborative contracting arrangements.		 17
Enabling Services Manage business systems and data.

Public organisation engagement through account managers, strategic stakeholder engagement, and communications.

Strategy setting, business planning, reporting, and governance.		 21
Commercial Pool Provide commercial and procurement support to public organisations on a cost-recovery basis.

The Commercial Pool focuses on public organisations carrying out complex, risky, and strategically important procurements.		 15
Policy Provide policy advice to Responsible Ministers.

Manage public sector procurement and property policy frameworks, including the Rules.

International engagement on public sector procurement policy and practice.

Support the Ministry of Foreign Affairs and Trade in trade negotiations.		 8
Other NZGPP management.

Provide advice and support to the general manager, teams, and public organisations.

Manage external advisory groups that help with thought and strategic leadership on functional leadership activities.		 5
Legal Provide legal advice and support to NZGPP on policy and operational matters, and to public organisations on procurement and property matters.

Lead cross-agency practice groups that drive the agenda for procurement and property for the public sector legal community.		 4
Total 129
Capability Services Graduates, who work at a different public organisation every six months. 18
Total 147

Notes: Figure 1 includes 14 staff working only on property functional leadership, seven procurement vacancies, and four property vacancies. The figure excludes three procurement contractors.
"Other" staff are executive assistant, chief advisor procurement, chief advisor property, principal advisor, and the general manager.
As needed, NZGPP gets support from the wider organisation (for example, some corporate services) and contributes to the wider organisation's work where it relates to procurement (for example, MBIE's Business Policy Unit). We did not ask NZGPP to quantify this support.

Source: Ministry of Business, Innovation and Employment.

Actual revenue and spending for 2018/19

Figure 2 shows NZGPP's actual revenue and spending for 2018/19.

Figure 2
New Zealand Government Procurement and Property's actual revenue and spending, year ended 30 June 2019

The table shows revenue from administration levies was about 68% of NZGP's total revenue.

Revenue $ Percentage of total revenue (rounded)
Delivery Services procurement and property: administration levies paid by public organisations buying goods and services through all-of-government contracts 20,338,731 68
Delivery Services procurement and property: other 143,066 1
Appropriation for implementation of improvement in public sector procurement (Crown and Government Electronic Tender Service) 4,610,851 15
Commercial Pool 1,158,298 4
Government Property Group operations 3,537,607 12
Total revenue 29,788,553 100
Actual spending 25,201,307 85
Accumulated surplus from unspent administration levies 6,651,857 -

Note: MBIE transfers revenue from administration levies that exceeds spending to a memorandum account. The balance of the memorandum account was $14,526,231 at 30 June 2019. NZGP told us that it plans to review the amount of the administration levies and how it could use the accumulated funds. NZGP also told us that higher volumes are increasing operational support requirements and it expects that costs will increase, which would result in a reduction in the memorandum account balance from 2018/19.

Source: Ministry of Business, Innovation and Employment.

How the administration levies from all-of-government contracts were spent in 2018/19

Figure 3 shows how MBIE spent the administration levies from all-of-government contracts for 2018/19.

Figure 3
How the administration levies for all-of-government contracts were spent in 2018/19

The table shows a breakdown of spending; the total is $14.9 million.

Category Description $
Salaries Sourcing, supplier relationship management, all-of-government contracts administration teams, director Delivery Services, manager commercial operations, and support staff. 4,957,360
MBIE overhead allocations Corporate overheads, including health and safety, information and communications technology, property, finance, legal, and human resources. 3,359,797
Enabling Services See Figure 1. 2,512,286
Building, Resources and Markets and NZGPP management and support costs Other, legal, portfolio management office (project management). 2,281,409
Information and communications technology and communication Maintaining and enhancing:
  • the Government Electronic Tender Service;
  • the procurement.govt.nz website;
  • the Online Panel Directory; and
  • the client relationship management portal used to manage relationships with public organisations.
 736,701
Contractors and consultants Backfill support and expert advice. 635,938
Other Predominantly other staff costs such as KiwiSaver, training, and Accident Compensation Corporation costs. 363,619
Travel Attendance at conferences and participating in meetings with suppliers and public organisations, including attendance at World Trade Organisation Government Procurement Agreement, and Organisation for Economic Co-operation and Development activities. 88,061
Total spending 14,935,171