The Government's delay in modernising the State's system for buying goods and services could be costing it €1 billion a year, according to a Department of Taoiseach-based advisory body.
The Information Society Commission (ISC) said yesterday that the public service was spending an estimated €9 billion a year on goods and services. But the ISC said it could save about €1 billion through the introduction of modern e-procurement methods.
E-procurement uses information technology, the internet and email to streamline the process of buying goods and services. It allows bids, acceptances and payment to be processed online.
The Government set up the National e-Procurement Strategy two years ago, but Ms Clodagh O'Donnell, chair of the ISC's e-business working group, said a clampdown on spending was delaying its development.
"Progress to date on procurement reform has been disappointing and has clearly been inhibited by budgetary constraints," she said.
"Annual funding allocations for 2002-2003 have been in the region of €5 million - a little over one-third of the annual investment of up to €14 million envisaged by the strategy."
She pointed out that it was originally estimated that the strategy would save the taxpayer €175 million, but said ISC's most recent research indicated that the figure could be nearer €1 billion if the strategy was on target.
Ms O'Donnell stressed that the State would have to first spend money on reforming its public procurement systems to maximise the savings. The ISC, which is a Government-appointed advisory body based at the Department of the Taoiseach, published a report on the area of procurement yesterday.
The report found that the US state of North Carolina was making savings of 12.6 per cent in its spending through the use of information technology and a system of public-private partnerships (PPPs).
It also established that 60 per cent of high-performing companies achieved a similar level of savings through the use of e-procurement.
The report calls on the Government to give adequate resources to its e-procurement strategy.
It also calls on the Government to examine the option of using PPPs in procurement. Ms O'Donnell said involving the private sector would speed up the process of reform.
She also warned that the Republic was lagging its competitors when it came to adapting to e-business.
"The public procurement sector is a strong mechanism to ensure healthy adoption of e-business in our economy," Ms O'Donnell said.
"The Government needs to lead in terms of its interaction with businesses to promote an overall e-business environment."
