The Corporate Procurement Plan 2021-2024 is the Office of the Ombudsman’s strategy to form the basis for strong financial management, risk management, audit and corporate governance systems for procurement for the Office. It outlines our procurement goals and objectives for the next three years.
The plan sets out the role of the Office in procurement and outlines the evolving nature of centralised procurement in the Public Service. Procurement is a key element of the Government’s Public Service Reform Agenda and is a very significant portion of overall spending. In this context, it is essential that the Public Service operates in a co-ordinated and efficient way and delivers sustainable savings to the taxpayer.
The purposes of the Corporate Procurement Plan are:
This plan covers the period from 2021-2024. It covers all areas of non-pay expenditure under the Ombudsman Vote including the Office of the Ombudsman, the Office of the Information Commissioner, the Office of the Commissioner for Environmental Information, the Office of the Secretariat to the Standards in Public Office Commission and the Office of the Commission for Public Service Appointments. It should be noted that the Office procurement procedures also apply to Referendum Commission (when established) expenditure.
The overall estimate provision for the Ombudsman Vote for 2021 is €12.644m of which €3.345m or 26% relates to non-pay expenditure which is the focus of the Corporate Procurement Plan.
It can be seen from the chart below that legal fees (29%); office equipment and external IT services (49%); and, training and development and incidental expenses (12%) amount to a combined 90% of the non-pay budget of the Office for 2021.
Title | Percent |
---|---|
Office Equipment and External IT services | 49% |
Legal Fees | 29% |
Training and Development and Incidental | 12% |
Office Premises Expenses | 6% |
Travel and Subsistence | 2% |
Postal and Telecoms | 1% |
Consultancy Services and VFM | 1% |
Referendum Commission | 0% |
The following table gives a breakdown of the main categories of non-pay expenditure for 2019 and 2020.
Area of Expenditure |
Expenditure in 2020 (‘000s) |
Expenditure in 2019 (‘000s) |
---|---|---|
Advertising and Publicity |
49 |
51 |
Staff training and Development |
47 |
91 |
Cleaning Services |
29 |
47 |
Annual Report Costs |
21 |
25 |
Corporate Services Support |
93 |
96 |
Postal Services |
7 |
19 |
Telephones |
19 |
22 |
IT/Computer |
788 |
918 |
Maintenance |
16 |
47 |
Heat, Light and Fuel |
60 |
70 |
Non-IT Consultancy |
37 |
41 |
Legal Fees |
511 |
490 |
Total |
1,677 |
1,917 |
The main focus of procurement for the period is to assist the Office in reaching its goals as identified in the Statement of Strategy. A primary focus of the Strategy is the harnessing of digital technology to improve the efficiency of the daily activities of the Office whilst also making our services more accessible to our customers.
Openness and transparency are central to ensuring that procurement transactions and decisions are fair, equitable and achieve value for money. Similarly, good governance results in more efficient use of resources and promotes better informed decision making. The Office has a responsibility to implement good corporate governance, of which a Corporate Procurement Plan is an important component.
All procurement carried out by the Office is governed by the following key principles:
The following EU Treaty principles must be observed:
Procurement in the Office is the responsibility of business units in the Office but is subject to general oversight by the Procurement Officer. The Office is committed to aligning its procurement with the national procurement model which is focused around the operations of the Office of Government Procurement (OGP). The OGP and its partners in Health, Defence, Local Government and Education put in place framework agreements and contracts which the Office will utilise to as great an extent as possible. Where such arrangements are not available, the Office will strive to ensure that its own tender processes comply with public procurement guidelines. The OGP now has in excess of 120 active framework agreements. The system the OGP uses has evolved to include direct drawdown facilities. This can be used for laptops and computer devices instead of more resource consuming mini-competitions as previously used. OGP also provides assistance to clients in the form of practical guidance and support. Recently, it has launched a “self-serve” system which allows the Office to conduct its own “mini-tender” competitions within certain Framework agreements, on the OGP website. This will assist in avoiding lengthy waiting periods for access to OGP staff and should enable many tender processes to be carried out more efficiently.
The National Shared Services Office is at an advanced stage of development of the provision of a financial management services for all of Central Government utilising a single common chart of accounts, standardised accounting processes and a single integrated financial management system. It envisages that it will deliver a centralised approach to eProcurement and will support enhanced strategic decision-making capability through access to better cost information.
If a central procurement arrangement is not available, the approach to be applied, in terms of nature of the approval required and the processes to be followed and by whom, is determined by the value and the nature of the goods or services involved. The position is as follows:
Goods or services with an estimated value (excluding VAT)
|
|
under €1,000 |
May be purchased directly, subject to the proviso that, where feasible, a verbal quotation (RFQ) is sought from three competitive suppliers. |
between €1,000 and €5,000 |
Require at least three verbal Requests for a Quotation (RFQ) and these quotations are confirmed by email |
between €5,000 and €25,000 |
Require a written Request for Quotation from a minimum of three suppliers (1) |
over €25,000 |
Require a formal Request for Tenders (RFT) |
over the EU Threshold (currently €139,000(2)) |
Require a formal Request for Tenders (RFT) and a more formal and more detailed process applies |
(1) It will be necessary for the purposes of Audit to be able to provide information that shows that every effort was made to obtain a minimum of 3 written competitive quotes. (2) This threshold is updated every 2 years. The threshold of €139,000 came into effect on 1st January 2020.
All procurement competitions, which could involve expenditure in excess of €25,000, including VAT, must be referred, together with a business case, to the Director General for approval in advance of the procurement competition being conducted. In addition, all invoices to the value of €20,000, inclusive of VAT, should be approved by the Director General or in her absence by the Finance Officer.
All orders for goods / services must be accompanied by a Purchase Order number which is obtained from Finance Unit prior to the placing of an order with the supplier. Requests for POs should be sent by e-mail to riar@ombudsman.ie. It should also be noted that there will be an increase in emphasis on the importance of having accurate and timely Purchase Orders for all goods and services procured under the Financial Management Shared Services Project, which is likely to go live for this Office in January 2022. It is likely that it will not be possible to process a payment without a PO number.
Due account must be taken of the relevant Circulars and Office policies with regard to all expenditure, including expenditure on travel and subsistence, entertainment and credit cards.
Sanction will be obtained from DPER in advance of any special payments which fall under the section C.7.11 of the Public Financial Procedures https://govacc.per.gov.ie/wp-content/uploads/2012/05/SECTION-C.pdf
The risks associated with a procurement process must be specifically addressed, having regard to the Office’s overall risk management processes. This should be done where the purchase is high (i.e. over €25,000 excluding VAT); the procurement process is complex; adverse consequences could significantly affect the Office’s operation; and delivering the Office’s core services is significantly affected. The risk should be included in the Office’s Risk Register where considered appropriate.
When risk is being considered with respect to procurement, the SRO should ensure that risk is assessed in relation to each category of goods and services. Examples of risk assessment could include: the nature of the supply market, e.g. does it favour the buyer or the supplier; the probability of supply failure; the impact on the Office of supply failure; and, the strategic importance of the good/service to the Office.
The Office has considered the potential risk resulting from the possibility of supply failure and the impact of the risk on services, particularly in the context of Brexit and Covid-19. In particular, risk mitigation strategies need to be considered if there is risk attaching to critical contracts to ensure continuity of service.
As expenditure on ICT and legal services accounts for approximately 78% of total non-pay expenditure, certain considerations must be taken into account for these categories.
ICT expenditure is overseen by the Office of the Government Chief Information Officer (OGCIO) through its expenditure approval and reporting process. The provisions of circular 14/21: Arrangements for Oversight Digital and ICT related Initiatives in the Civil and Public
It should be noted in particular that:
The procurement process for the selection of an external legal services provider is currently underway with the assistance of OGP. This process is being conducted under the new Framework which was concluded by OGP at the end of May 2021.
The headline figures concerning legal expenditure in 2020 were as follows:
The table below provides a breakdown per office of the expenditure for 2020 compared with 2019 and 2018 (it should be noted that court hearings were disrupted in 2020 due to Covid-19 restrictions).
Year | Ombudsman | CPSA | OIC | OCEI | SIPO |
2018 | 0 | 67 | 277 | 156 | 52 |
2019 | 23 | 0 | 236 | 106 | 66 |
2020 | 10 | 0 | 92 | 240 | 6 |
In relation to Court-related expenditure, a combination of the in-house legal services unit and the external legal advisors are used together with Counsel as required. Senior Counsel may be used in exceptional circumstances.
Circular 05/13 https://circulars.gov.ie/pdf/circular/per/2013/05.pdf sets out guidelines for the procurement of legal services and managing legal costs in the civil service. Staff embarking on a tendering process for legal services should be familiar with its provisions. It states that it is a basic principle of public procurement that a competitive process should be used unless there are justifiable exceptional circumstances. If the Office seek to rely on the justifiable exceptional circumstances provision, it must be approved in advance by the Director General and the reason must be clearly recorded and a verifiable audit trail be maintained. The circular further states that best value for money must be obtained in all procurement including legal services and that a competitive process, based on appropriate advertising, as part of a transparent and objective tendering process is generally accepted as the means of achieving this. The circular further requires public bodies to put in place internal protocols regulating the basis on which access to legal services may be available.
The internal protocol will be as follows:
Direct Professional Access should only be used in exceptional circumstances (e.g. highly time-sensitive Referendum Commission campaign questions), as the Legal Unit is qualified to instruct Counsel.
If the Legal Unit engage outside Counsel directly, the procedure must be consistent with the procurement rules of the Office and Public Financial Procedures. With regard to the setting up of panels it should be noted that circular 05/13 states that this can be done by inviting expressions of interest or tenders through the eTenders website (www.etenders.gov.ie) from those qualified and having the expertise to provide the specified service. The Legal Unit will set up a new panel, on the basis of suitable criteria (including, as appropriate, competitive pricing criteria), every three years. The current panel was created in 2020 and will thus be renewed in 2023 unless it becomes necessary to do so before that date. As the counsel panel may include details of the fees to be charged it may not be necessary in all cases to seek three quotes. When the Legal Unit is making the decision to engage a particular barrister for an item of work, it will email the Procurement Officer outlining the rationale for the decision. This can be based on the exiting fees quoted, expertise and availability of counsel. It is also best practice for the Legal Unit to rotate through the panel. Alternatively, a competitive process can be used to select a single legal service provider to provide the appropriate service over a given period (effectively a single party framework).
The Procurement Officer and the Finance Unit have overall responsibility for supporting the procurement function within the Office. First and foremost, they are responsible for ensuring that the actions identified in this plan are delivered. The onus remains on staff members directly involved in procuring goods and services to ensure that all procurements are in accordance with the overall strategic aims of the Office (e.g. the IT Unit is responsible for procuring IT goods and services, while the QSEC is responsible for procuring goods and services related to the production of annual and other reports).
While it is appropriate that responsibility for securing certain goods and services rests with the staff members who possess the necessary relevant expertise to determine how best the demand may be met, it is important that those staff members are sufficiently skilled to deliver best procurement practice. Accordingly, the Procurement Officer also provides practical procurement advice and guidance, where required. The Procurement Officer and the Finance Unit will ensure that all staff members involved in the procurement function are made aware of the Office’s internal procurement policy and are kept up to date with best practice in the procurement area.
Competency in procurement will be considered in the context of the preparation of training and development plans for key staff involved in procurement.
Monthly meetings will be held involving the Director General, the Finance Officer, the Accountant and the Procurement Officer to discuss procurement and review the central list of contracts. The Central List of Contracts will be used as a tool for planning future procurement requirements.
Where a unit intends to undertake a procurement process, a Senior Responsible Officer (SRO) - at minimum Assistant Principal level for projects in excess of €25,000 excluding VAT - must be assigned within that section to take full responsibility for that procurement process and retains overall responsibility for the procurement throughout the process. The SRO is the key contact with the Procurement Officer.
The SRO has responsibility to:
The SRO should be familiar with Article 84 of Directive 2014/24/EC (applies to contracts over EU threshold only) which requires that, for every contract, framework agreement or establishment of a dynamic purchasing system (above EU thresholds), a report should be prepared on the procurement process undertaken and the results of this process. This report should be sent to the Procurement Officer.
The Department is required to have a nominated Procurement Officer under Department of Finance Circular 40/02. The Procurement Officer will be appointed by the Director General and will report to the Finance Officer and the Director General.
The role of the Procurement Officer should be independent of the procurement processes being undertaken. While s/he may be present to observe and ensure that the evaluation is conducted in line with the appropriate guidelines and procedures, s/he will not have a vote on the evaluation process.
The Procurement Officer will:
An Evaluation Committee is required for larger value contracts (above €25,000 exclusive of VAT) but can also be requested for medium value contracts if deemed appropriate by the SRO.
The Evaluation Committee is a group of individuals assembled by the SRO, who together have the requisite knowledge and experience to evaluate tenders. The Committee can include members from other Government Departments and subject matter experts. Each member of the Evaluation Committee is responsible for evaluating all tenders in a fair and unbiased fashion and in strict compliance with the evaluation methodology and the qualification and award criteria set out in the tender documents.
At least two members of the Evaluation Committee must ensure that all manual tenders are opened together as soon as possible after the designated latest time and date set for receipt of tenders. This must involve a clear and formal vouched report of the tenders received and a record of the opening of each tender must be maintained. This is not necessary for eTenders competitions as the system provides for an audit trail.
The Procurement Officer will monitor all new procurements in excess of €25,000, excluding VAT, and a random sample of those below €25,000, to ensure they are in compliance with these procedures.
The Procurement Officer will report any procurement issue that gives cause for concern to the Finance Officer and the Director General. The Finance Officer or Procurement Officer will give a quarterly update to the Management Team.
Under Department of Finance Circular 40/02, an Annual Report (signed off by the Accounting Officer) in respect of contracts above a €25,000 threshold (exclusive of VAT) which have been awarded without a competitive process must be completed annually by each Government Department and forwarded to the C&AG by 31st March in respect of the preceding year.
“Conflict of Interest” is defined in Regulation 24(2) of the European Union (Award of Public Authority Contracts) Regulations 2016 to include “any situation where a relevant staff member has directly or indirectly a financial, economic or other personal interest which might be perceived to compromise his or her impartiality and independence in the context of the procurement procedure”. By Regulation 24(1), contracting authorities are obliged to take appropriate measures to effectively prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures.
It is important to note that it is not necessary that a person’s impartiality and independence are actually compromised; a conflict of interest will arise where a person’s impartiality and independence are merely perceived to be comprised. It is the responsibility of each staff member involved in the procurement process to ensure that any and all potential conflicts of interest are disclosed to the Procurement Officer (in writing prior to the person becoming involved in the tender evaluation process). The Office shall not permit a person to participate in a procurement procedure if that person has a conflict of interest within the meaning of Regulation 24(2) which cannot be remedied.
While price is a significant factor in determining value for money in procurement, it is not the only variable that needs to be considered. Value for money also encompasses non-cost factors, such as whether the purchase is fit for the intended purpose, whether it is of sufficient quality and whether the level of service or support provided meets the organisation’s requirements. Accordingly, when purchasing goods or services staff members should adhere to the following principles:
The responsibility for achieving value for money lies with all staff of the Office and does not rest solely with those who have financial responsibility. All staff on the Management Team have a responsibility to ensure that best practice is followed in their own areas and that both they and staff are aware of and are implementing all updates in the procurement area, in particular that they are aware of all new and upcoming frameworks from the OGP.
The organisation’s budget is entirely administrative, with no programme expenditure and almost 74% of annual expenditure comprising payroll costs. The non-pay estimate allocation in 2021 is €3.345m.
The actual non-pay expenditure for 2020 amounted to €1.8m. An analysis of 2020 non-pay expenditure using data provided from the organisation’s financial management system, JD Edwards, shows that payments were made to 208 suppliers in 2020. 100 suppliers (48%) received payments of less than €1,000 for the year, representing just over 1.1% of total non-pay expenditure. On the other hand, 20 suppliers (less than 10%) received payments in excess of €20,000, representing 63% of total expenditure. Details of the 20 suppliers in question are as set out in the following table:
Supplier | Goods Service Procured | Amount |
Micromail | IT/Computer | €152,780.71 |
PFH Technology Group | IT/Computer | €128,598.80 |
Philip Lee Solicitors OIC | Legal - Solicitors | €128,113.48 |
Codec - DSS | IT/Computer | €96,753.62 |
Emily Egan S.C. | Legal - Barrister | €86,216.30 |
Brian Foley | Legal - Barrister | €67,939.18 |
Dell Computer (Ireland) | IT/Computer | €52,626.75 |
d-PIT Solutions | IT/Computer | €50,142.86 |
Francis Kieran | Legal - Barrister | €46,845.75 |
SSE Airtricity Ltd | Heat, Light and Fuel | €39,577.59 |
Fintan Valentine | Legal - Barrister | €38,766.81 |
Claire Hogan BL | Legal - Barrister | €37,558.80 |
Dept Digital Ltd. | IT/Computer | €30,315.59 |
Accent Solutions | Cleaning | €29,740.06 |
Dovetail Technologies | IT/Computer | €28,225.22 |
Damovo Ireland Ltd | IT/Computer | €28,004.55 |
Datapac | IT/Computer | €26,140.55 |
Shared Services Vote (311 SSOF) | Corp Serv Support - NSSO | €22,723.72 |
Eoin Carolan B.L. | Legal - Barrister | €22,389.22 |
eCom Solutions | IT/Computer | €20,288.47 |
Total |
€1,133,748.03 |
Legal Services account for 7 of the top 20 payees. Measures such as the recruitment of an in-house legal advisor and an Office wide legal services contract have been introduced to minimise expenditure on legal fees. The contracts for the supply of energy services (i.e. electricity) and for the provision of office maintenance services are managed by the OPW.
Green Public Procurement is a process where public authorities seek to source goods, services or works with a reduced environmental impact. The appropriateness of including environmental measures in public procurement projects will vary from contract to contract.
The Government has decided that proposals on the implementation of Green Public Procurement will be developed by the Department of Environment, Climate Action and Communications and the OGP. The main areas in which green procurement will have an impact on our Office are:
In this regard, OGP is committed to supporting the implementation process to ensure that green public procurement becomes part of the mainstream public procurement process. The Irish regulations require tenderers to comply with applicable EU regulations and obligations in the field of environmental, social and labour law. The OGP complies with these obligations in its Framework Agreements to procure common goods and services for public bodies.
The Office will keep abreast of developments to ensure that we are in keeping with best practice. It will ensure that the procurement process considers green issues from business case stage through to selection, award and contract stages. The Department of Environment, Climate Action and Communications has undertaken to provide training to officials involved in procurement in the use of environmental considerations including how to consider and incorporate green procurement criteria appropriately.
The Department of Environment, Climate Action and Communications has introduced a requirement that 19 specified main Departments are required to report annually in their respective Annual Reports on progress in relation to green procurement. While not a requirement for our Office at this stage, it may be extended in the future.
The Office also needs to be aware of social considerations when procuring goods and services. It is worth noting that a variety of social considerations are already included in public procurement processes and contracts as a result of statutory requirements. These include areas such as health and safety, equality and employment law. The main social considerations that the Office needs to be aware of in the context of its procurement include:
It is also noted that the OGP has established a cross-departmental Social Considerations Advisory Group to promote and facilitate the incorporation of social considerations, including environmental considerations, into public procurement. The Office will follow guidance from this body to ensure that it is incorporated into its procurement.
The Procurement Officer will carry out an annual review of procurement to evaluate how procurement is being conducted in the Office. The Corporate Procurement Plan should be reviewed as required by the DG or the Finance Officer.