"The Department must quickly make a decision about
whether it is sensible to continue with a nationally directed
central procurement body. If it concludes that it is, it must
change the way Firebuy operates. If not, it should transfer its
operations to another professional buying
organisation.
"To deliver value for money for the taxpayer, public
sector bodies should prevent the procurement of unnecessarily
expensive bespoke equipment and collaborate successfully to build
higher volume orders which reduce supplier prices."
Amyas Morse, head of the National Audit Office, 23 July
2010
Firebuy, a specialist body established by the Department for
Communities and Local Government to support procurement of kit by
Fire and Rescue Services, has cost nearly twice as much to set up
and run as the total savings it claims to have delivered. In a
report to Parliament today, the National Audit Office recommends
that the Department quickly assess whether to continue with a
nationally directed central procurement body and, if so, to change
the way Firebuy operates, or to transfer its operations to another
professional buying body or a Fire and Rescue Service.
Without the power to make local Fire and Rescue Services use its
national procurement contracts, Firebuy has had to rely on
persuasion. Progress has therefore been slow with only five out of
the 14 framework contracts it has set up being used by more than
half Fire and Rescue Services to purchase equipment. Most of the
contracts allow suppliers to offer many variations of the same
types of equipment, allowing Fire and Rescue Services to procure
expensive bespoke equipment, and preventing suppliers offering
lower prices through high volume orders. For example, the Firebuy
contract for fire engines allows for 54 possible combinations of
supplier, chassis, water pump and body type and a possible one
million different specifications.
The approach to measuring savings achieved by Firebuy is
inadequate and the information that the estimated savings are based
on is mostly unreliable.
The Department expected Firebuy to be self-financing by its
third year of operation (2008-09) but it is still heavily reliant
on grants from the Department. Firebuy is expensive to run, with
overheads between five per cent and 10 per cent higher than the
industry norm. The Department has not shown enough leadership,
direction or oversight of Firebuy to ensure it achieved its
original objectives, most of which were not monitored (only 29 of
66 targets were monitored) and many were not met.
Publication details:
HC: 285, 2010-2011
ISBN: 9780102965438