Development of joint procurement
In terms of the tendering of joint procurement, 2022 was slightly calmer than the previous year for Hansel. A total of 35 new joint procurement contracts entered into force (12 framework agreements, 4 dynamic purchasing systems, 19 small-scale procurements). There were 527 signed agreements. We processed 328 applications for participation in dynamic purchasing systems (DPS). A total of 102 agreements were amended.
At the end of 2022, we were able to offer 73 framework agreements and 47 DPSs for our customers. A total of 26 small-scale procurement were available. There were 981 contractual suppliers, of which 56% were SMEs. The contractual suppliers had more than 3, 000 subcontractors.
Joint procurement by category
|Vehicle and logistics services||80,095||97, 471||102,520||97,113||93,457|
|Specialist services||151,800||127, 634||143,459||135,006||106,406|
|Food and restaurant services||94,586||86,308||76,128||25,779||25,199|
|Personnel and healthcare services||113,777||90,690||73,435||78,008||73,560|
|Furniture and office services||86,375||84,006||60,214||44,944||60,414|
|Data centre services and hardware||34,184||45,361||60,997||60,279||58,522|
|Travel and meeting services||59,437||20,477||25,313||97,917||87,324|
|Cleaning services and supplies||54,683||52,079||46,323||39,232||36,132|
|Security technology and related services||33,280||33,112||29,969||25,028||24,764|
The joint procurement category system was changed due to an organisational change in the autumn of 2019. There are now 14 categories instead of 17. In reporting, data has been moved to the new categories.
Framework agreements, top 15
|Resale of Microsoft licences||159,381|
|Food and non-food products||85,355|
|Occupational healthcare services||81,447|
|Hardware leasing services||67,432|
|Fuel purchases from petrol stations||29,474|
Ease of joint procurement
Joint procurement was facilitated by arranging minicompetition information events and webinars for customers. The operating model of the procurement support unit was improved and the number of employees was increased to better ensure adequate support for customers during minicompetitions. In 2022, the procurement support unit assisted customers in 127 minicompetitions (119 in 2021). The customer satisfaction rate for the minicompetition support was 4.61.
In late 2021, we introduced a free Competition Assistant to make procurement easier for our customers. With the Competition Assistant, our customers can more easily arrange competition based on framework agreements in dynamic purchasing systems and small-scale procurement processes. The service allows the customer to create an invitation to tender using predefined document templates maintained by Hansel and send the invitation to tender to suppliers. The suppliers submit their offers directly to the customer via the service and the customer can choose a supplier in the service, in which case the system will automatically generate the necessary documents and send them to the selected supplier.
During the year, customers used the Competition Assistant more often for minicompetitions and small-scale procurement. There were 153 competitions based on framework agreements in dynamic purchasing systems (16 in 2021). The most competitive tendering processes were arranged for temp services in the healthcare and social welfare sector, computer hardware and occupational healthcare services. The value of procurements made through the Competition Assistant multiplied to €70 million (€4 million in 2021).
A total of 119 small-scale procurements were realised (108 in 2021). The most competitive tendering processes were arranged for office furniture, communication and marketing services, and small-scale procurements in the fields of management and IT consulting. The value of small-scale procurements increased by more than a third to €4.2 million (€3 million in 2021).
Preliminary studies on new joint procurement processes and customers’ procurement needs
In 2022, we carried out several preliminary studies on new joint procurement processes. We studied customer needs in areas such as a dynamic purchasing system for food, air source heat pumps and wind power, laboratory equipment and cleaning supplies. A decision to establish a new dynamic purchasing system (DPS) for laboratory equipment was made. Furthermore, it was decided that cleaning supplies would be included in the next cleaning equipment joint procurement process, which will be put out to tender in 2023. As for the other preliminary studies, it was concluded that the prerequisites required for joint procurement did not exist at this stage. Regarding vehicle procurement, the evolution of the needs of the security authorities was studied.
A decision was made in late 2022 to launch a strategic project to explore the possibility of joint procurement in the healthcare and social welfare sector. The project will be launched in early 2023.
Delivery problems and price change pressures in joint procurement
The effects of the pandemic and the war in Ukraine were reflected in joint procurement in 2022. Some contractual suppliers experienced delivery difficulties. In addition, several industries experienced strong pressure to increase the prices of goods and services due to factors such as rising raw material and fuel prices and challenges encountered in logistics.
Hansel actively engaged in discussions with its contractual suppliers to address the challenges. There was no need to terminate any contracts due to delivery difficulties or an unsustainable price level. Several of Hansel’s joint procurement contracts include a price cap for the contract period, and the level of price changes generally remained in line with the contractual terms.
The exceptional circumstances and price pressures caused changes in some industries that Hansel could not have anticipated when issuing the invitation to tender, nor could the suppliers be expected to have anticipated and taken them into account when submitting their offers. To ensure that meeting their contractual obligations would not be unreasonable for the contractual suppliers due to the unforeseen changes in circumstances, price adjustments for a fixed term were introduced in some joint procurement contracts. The amendments applied to the joint procurement of office supplies, cleaning supplies, food and liquid helium. The changes allowed the contracts to remain in force and secured the deliveries. The increases that are valid for a fixed term are not expected to have any impact on the value and the overall nature of the procurement during the joint procurement contract period.
Obligation to use joint procurement in central government and the joint procurement coordination group
In August 2021, the Ministry of Finance established a working group to
- assess and prepare measures for the development of joint procurement in central government, such as how the Government Decree and the decision of the Ministry of Finance on joint procurement in central government should be clarified;
- investigate and assess how and by what means procurement subject to the joint procurement obligation should be monitored in the future; and
- explore the possibility of Hansel auditing joint procurement suppliers in matters such as the social objectives set out in framework agreements.
The working group completed its assignment at the end of 2022. The Government Decree and the decision of the Ministry of Finance were amended on 8 September 2022 based on the working group’s proposal. No new joint procurement procedures were added to the decision on the obligation to use joint procurement. Earlier in the summer, the Ministry of Finance removed refuelling from the decision on the obligation to use joint procurement.
On 20 December 2022, the Ministry of Finance appointed a coordination group to develop joint procurement in central government for the period 1 January 2023 to 31 December 2024. The working group aims to:
- create a channel for government agencies and institutions to introduce their needs and expectations for the development of joint procurement to the joint discussion with the Ministry of Finance and Hansel;
- provide the Ministry of Finance with a clear process to guide the content of joint procurement;
- enable Hansel to extensively communicate on matters related to joint procurement; and
- strengthen the role of public authorities in the development and guidance of the content of joint procurement and enable better consideration of the joint procurement needs of government agencies.
Susanna Närvänen, Chief Category Officer at Hansel, is a member of the working group, and Mervi Olkinuora, Head of Unit, is a member of the secretariat.
Study on the benefits of joint procurement
A project on the cost-effectiveness of joint procurement was launched as part of the Government plan for analysis, assessment and research. The study was commissioned by the Ministry of Finance and will be carried out by VATT Institute for Economic Research, Hanken School of Economics, the University of Lapland and Aalto University. The aim is to produce new and easily usable information on the cost effects of joint procurement for decision-makers.
The study empirically examines cost effects through both prices and process expenses. The research questions are:
- Does the centralisation of procurement result in cost savings through negotiated prices, and can lower unit prices (i.e. economies of scale) be achieved by tendering for larger quantities?
- Does the centralisation of procurement generate cost savings through process costs, and will the overall workload of the contracting entities in a procurement process be reduced in the case of joint procurement?
- Does the use of a central contracting authority contribute to the monitoring or management of procurement by contracting entities during the contract period?
- How do the different methods of tendering in joint procurement (e.g. traditional framework agreements, the dynamic purchasing system procedure, own procurement) affect the process costs for the parties involved in the procurement process (contracting entity, central contracting authority)?
Hansel strongly supports the study and participates in the research steering group.
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