Our intentions: Looking at the functional leadership role for public sector procurement

10 July 2019: Functional leadership aims to build procurement capability, improve effectiveness, and reduce the overall costs to government of common business functions. We're looking at what the Ministry of Business, Innovation and Employment does, how the central agencies support MBIE’s functional leadership, and government agency and third-party perceptions of it.

For public organisations, delivering services well depends on doing procurement well. We estimate that the public sector spends about $42 billion on procurement each year. It is important that New Zealanders get the best possible outcomes from such a significant amount of public spending on goods and services.

In the first year of our work on procurement, we have been looking at the Ministry of Business, Innovation and Employment's functional leadership role for public sector procurement. Functional leadership aims to build procurement capability, improve effectiveness, and reduce the overall costs to government of common business functions. We are looking at what the Ministry does, how the central agencies support the Ministry’s functional leadership, and government agency and third-party perceptions of that functional leadership.

What we’re focusing on

To provide effective leadership, MBIE is expected to engage collaboratively with agencies, and chief executives of the agencies are expected to respond.

We are looking at how effectively and efficiently the Ministry (MBIE) is:

  • improving procurement practices through its activities, including its work on procurement principles, rules, and guidance (the Rules of Procurement) and its all-of-government contracts; and
  • developing procurement workforce expertise and capability in central government.

Our main focus is MBIE and the New Zealand Government Procurement Group inside MBIE, and we are also looking at how central agencies have supported MBIE’s change management role.

In total, about 135 agencies must use the Rules. And other government agencies, including local government, are also expected to use the framework provided by the Rules because it represents good practice.

We have picked six agencies of different sizes to understand how MBIE has supported them to improve their procurement. These agencies are the Ministry of Social Development, Fire and Emergency New Zealand, the Ministry of Foreign Affairs and Trade, the Ministry for Culture and Heritage, the New Zealand Antarctic Institute, and the Ministry of Education. We are also meeting with representatives of third parties to government agencies.

The difference we expect to make

We expect our work to be useful in:

  • explaining how the arrangements for improving government procurement work, and how well;
  • helping to improve government procurement by making suggestions or recommendations to central agencies, MBIE, and government agencies; and
  • challenging the public sector to openly share information about what government agencies spend, and on what.

We’ll also share our thoughts on lessons to be learned from the Ministry’s efforts to improve government procurement.

The contact person for this audit is the Sector Manager for the Ministry of Business, Innovation and Employment, Colleen Pilgrim.

Please use the feedback form on the right if you’d like to interview Colleen about this audit, make a suggestion, or ask a question.

We expect to complete this work before the end of 2019.