Senate launches a procurement development programme – estimated €100 million savings potential
Senate Group, which is responsible for central government facilities, is launching a procurement development programme. According to a preliminary estimate, the extensive programme could deliver annual savings of around €100 million by the end of 2029.
Annual procurements by Senate Group’s unincorporated state enterprises, Senate Properties and Defence Properties Finland, total more than €800 million. Procurements are public procurements in accordance with the Act on Public Procurement and Concession Contracts.
The purpose of the development programme is to improve the effectiveness of procurement in particular by increasing the willingness to bid. The key tools include making it easier to participate in tenders, improving communication related to procurements, increasing market dialogue and reducing unnecessary bureaucracy. In development work, it is important to examine the rational dimensioning of requirements for procurement and to use various means to lower the threshold to submit a bid.
“We need more bids for tenders. Bidding is considered to be laborious in public tenders. We want to develop our own operations and to find ways to make it easier to participate in tenders. Through this, more and more companies have an opportunity to participate in tenders and at the same time allows a possibility to obtain major savings in procurements,” says Esapekka Kuikka, Head of Procurement Unit at Senate Properties.
More detailed planning of the development programme is underway. According to a preliminary estimate, measures under the programme could deliver annual savings of around €100 million by the end of 2029 and thus contribute to easing the upward pressure on central government property costs.
“Public debate has raised the major savings potential in public procurements. We believe that savings can be achieved but it will take a lot of work and the development of public actors’ business models. An increase in central government facilities costs has long been prevented, but costs are now rising because of inflation and the need for major investments. Improving the efficiency of procurements is one way to curb costs,” says Jari Sarjo, Senate Group’s President and CEO.
Senate Group is a major buyer of construction management and real estate services in Finland and one of Finland’s largest procurement organisations. We procure services, contracts and goods for the use of Senate Properties and Defence Properties Finland.
Service providers have an important role in the Group’s operations. Most of the services we provide for our customers are purchased on the market. We employ actors in the construction and real estate sector in particular. We procure construction management, building management, maintenance and repairs and facilities services, for example.
Procurements in 2022:
- Annual volume: > €800 million
- Impact of procurements on employment: 6,000 full-time equivalents
- Suppliers: around 4,500
