Case Study: Observations on HSE Procurement
Posted by in Finance | Health | Public | Services | Uncategorized
This case study is based on the correlation and analysis of 138 contract award notices that the HSE have posted on eTenders in the years 2008 and 2009. In total this study covers contracts with a declared combined total of around 640Million Euro for 2008 & 2009 for 89 contracts which declared their total value.
The HSE is Ireland’s largest procuring organisation which spends in the region of 4Billion Euro per annum on various goods, services and works. However less than 10% of this expenditure appears on eTenders due to various below threshold spends and recurring contracts etc.
The HSE is also one of the most varied public buyers in the State. There are five major buying categories which involve expenditure of over 100 Million Euro per annum and a further 14 which involve expenditure of between 10 Million and 100 Million Euro per annum. For a more detailed break down of these purchasing categories: Click Here
In 2009 the breakdown of what the HSE buy (on eTenders) was divided thusly with the ICT and Professional services sector making up the largest number of contracts awarded. In 2008 the figures largely mirror this trend.
HSE Purchasing Category Activity, 2009
Average Overall Weightings for Tendered Contracts, 2009 
The above graph makes up an aggregated average of weightings (Contract Requirements) applied by the HSE in 2009. I have correlated several HSE procurement language terms into the above categories for example product quality includes a number of factors directly linked to the overall quality of the product.
Important Factors:
- Price continues to dominate the overall chart of weightings with a combined importance of 43% however not in the traditional way. When broken up initial price makes up 23% of overall pricing and Life Cycle costing makes up 20% (up 3% from 2008) of total over all contract weightings.
- As alluded to in previous posts this marks a shift towards taking into account the total cost of products and services over their entire life cycle. This may allow for new and technologically advanced suppliers with in depth knowledge of their products cost in terms of energy consumption and carbon emissions to enter the market.
- To some extent there is an increasing interest in doing business with the HSE as mirrored by the increased average of tenders per contract in 2009 7.66 up from 5.14 in 2008.
- Finally and perhaps most encouragingly of all, the proportion of contracts awarded which includes an Irish winner increased from 80% in 2008 to 93% in 2009.
There are without doubt challenges involved in doing business with the HSE. However the time has never been better for the Irish SME sector to engage with Ireland’s leading and most varied buyer of goods and services from Fruit and Vegtables (just over 3 Million Euro worth of contracts awarded in 2009) to Software Systems (2.4 Million worth of contracts with declared value awarded in 2009).
To find out more about doing business with the HSE CLICK HERE to view the HSE Supplier Charter.
To speak to a member of EI’s public procurement team about doing business with the HSE, leave a comment on this post and we will revert to you as fast as possible or alternatively email this address.
value4money@enterprise-ireland.com
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