Appendix 3: Improving procurement spending data

Using "functional leadership" to improve government procurement.

Cabinet papers from 2009, 2012, and 2018 expressed concern at the lack of good-quality, consistent, and easily available information about government procurement spending that can be used to inform decision-making.

New Zealand falls behind some other jurisdictions in being able to answer these questions:

  • How much money is the Government spending through procurement?
  • What is the Government buying?
  • How many contracts are there, and of what value and length?

There is a cost in collecting this information, but there are also costs in not having the information.

As procurement becomes a more strategic function in a public organisation, analysing spending is a fundamental technique that procurement professionals can use to guide executive leaders and budget holders in maximising public value. Analysing procurement spending provides data that can be used as a baseline to measure improvements and provide reliable data for deciding strategies to realise short-term and long-term savings.

Analysing spending is important for proactively identifying savings opportunities, managing risks, and optimising buying power. Public organisations vary in their ability to easily analyse their spending. For example, not all the public organisations involved in our audit could easily produce a report confirming that all spending that should have gone through its all-of-government contracts has done so. This means that executive leaders do not necessarily have a comprehensive understanding of their spending.

Executive leaders should know the answers to these questions:

  • What are we buying?
  • Who are we buying from?
  • Who is buying?
  • How often do we buy?
  • When did we buy?
  • How much did we pay?
  • Are we getting what we had been promised?
  • What location were the items delivered to?
  • How does the data compare with previous years?