Reducing the cost of procuring Fire and Rescue Service vehicles and specialist equipment
Published: 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.
Amyas Morse, head of the National Audit Office, said today:
“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.”
