Central procurement saves public funds

Hansel’s task is to produce savings in the government’s procurement activities. While it is a challenge to calculate the exact amounts of these savings, it has been proven that central procurement activities produce savings in comparison to decentralised procurement.

Hansel has for a long time been making rough savings calculations, which are based on a study on the savings produced by central procurement, carried out at the Helsinki School of Business (Karjalainen et al. 2008). The study showed that the centralised operating model produced savings of about 20–25%. Using this model, we have been able to calculate that in 2017, Hansel’s central procurement activities produced theoretical savings of about €286 million compared to decentralised acquisition. The calculation model also utilises calculations of the potential of Hansel’s framework agreements, but it does not account for factors such as the use of working time, the costs of dividing resources, or the competence deficits that may be caused by distributed operations.

Centralised procurement activities produce savings.

As Hansel does not pursue profits, the efficiency of the company’s operations can also be measured through reductions in the service fees charged from contract suppliers. Currently, the maximum service fee for a framework agreement is 1.5% of the contract value. The average service fee in 2017 was 1.04%. Hansel has been able to reduce its service fees continuously; in 2018, too, service fees will be reduced for several framework agreements.