New Zealand All-of-Government Contracts for External Legal Services and Air Travel announced

New Zealand's Minister for Economic Development, Steven Joyce, today announced $178 million in savings over the next 6-7 years from new All-of-Government contracts for air travel and external legal services – open to all agencies in the Public Sector including councils and up to 2,500 schools.

“Saving over $108 million alone on legal costs over the next six years shows the negotiating power of the whole of government when contracting services,” said Mr Joyce. “We’ve shaved an average of 18 percent off the $100 million annual external legal services bill, a great result.”

The legal services contract has produced a 39-strong panel of law firms, large, medium and small, to provide external legal services across the Public Sector, including Crown Law’s on-going involvement in this area.  Robust monitoring of the firms on this contract, will allow Agencies for the first time to compare each law firm’s ongoing value for money when considering who to choose. “It’s great to see small, medium and large kiwi businesses winning places on the first All-of-Government legal services contract, but they’ll need to stay sharp and competitive to keep winning Agency business” said Mr Joyce.

In addition, the first contracts for air travel have now also been awarded to Air New Zealand, Emirates, Lufthansa and Qantas for up to seven years. Negotiations continue with one other airline. "Air travel is a significant cost for government and reducing it by more than $70 million over the life of this deal is another great result” said Mr Joyce.

Air New Zealand will be the preferred supplier for domestic air travel, the largest area of government travel spend. The remaining suppliers (with Air New Zealand) will provide coverage for international flights. Point of sale discounts will now be available to all Public Sector agencies “this isn’t just about flying employees around, we’ve already had interest from schools wanting to access government deals for their school trips – so many will benefit from this result” said Mr Joyce
“Both these contracts represent more than dollar savings. They will deliver improved service quality and make it cheaper and easier for these airlines and legal firms to do business with government – each business will now have one direct deal for all agencies" Mr Joyce said.

These contracts are part of the Public Sector-wide Government Procurement Reform Programme aimed at making Government buying as efficient as possible, reducing costs for businesses supplying government and making cost savings for agencies.

These new contracts join last year’s first set of four all-of-government contracts for office consumables, passenger vehicles, print devices and desktop and laptop computers. These contracts remain on track to deliver $115 million in savings over five years.

 “Every dollar saved through sharper pricing, is a dollar that can be spent on improving public services, building infrastructure or keeping our debt levels low” and “this is a tangible example of this Government’s commitment to streamline back office functions such as Procurement, to deliver benefits for Tax-payers” further, “this programme has now implemented six All-of-Government contracts, saving circa $300 million over their contract term – this level of collaboration to deliver real savings is exactly what we need” Mr Joyce said.

Government currently spends around $30 billion a year on procuring goods and services.  For more details on government procurement and All-of-Government contracts visit www.procurement.govt.nz.