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Achieving greater societal value from procurement spend

Part of: Breakfast session Procurement news

Last month Cabinet agreed to leverage the money it spends on goods and services to support broader societal and environmental outcomes for New Zealand.

New Zealand Government Procurement and Property (NZGPP) has been working on ways to use procurement to achieve an inclusive, sustainable economy that lifts the living standards of all New Zealanders.

Karen English, Manager Policy, NZGPP says each year across the public sector we spend around $41 billion buying goods and services. We have an opportunity to use this spending power to contribute to a range of outcomes beyond delivery of the goods and services themselves.

“We need to redefine what value for money is,” she says. “Rather than just thinking about traditional commercial approaches to our contracts, how can the procurement community do things differently to make things better for all New Zealanders or tackle some of the big issues we’re facing?”

What that means is putting the force of government procurement behind standards of behaviour in the private sector. For example, putting provisions in place to ensure government contracts only go to businesses with an excellent health and safety track record or with squeaky clean labour practices.

Another area where procurement can make a difference is in supporting skills creation where New Zealand has critical shortages such as the construction sector workforce or considering how we can better support competitive New Zealand businesses.

Government decided on a targeted approach that focuses on where we can achieve the greatest benefit for the country. The four target outcomes are to:

  • Increase New Zealand businesses’ access to government procurement.
  • Increase the size and skill level of the domestic construction sector workforce and provide employment opportunities to targeted groups.
  • Improve conditions for workers and future-proof the ability of New Zealand businesses to trade.
  • Support the transition to a net zero emissions economy and assist the government to meet its goal of significant reduction in waste by 2020.

“NZGPP will be working closely with the procurement community on how to practically implement these outcomes in the coming months,” says Karen. Agencies should begin examining their own procurement activities to see how these priorities can be applied by them.”

Read about New Zealand Government Procurement’s work to use procurement for broader outcomes.