NSW government electronic procurement system criticised

The NSW government’s electronic purchasing system Smartbuy is being ignored by public servants who believe they can buy goods cheaper externally according to a report by the state’s Auditor-General.

Meanwhile, the state opposition has flagged an overhaul of such procurement systems and it has said it will allow schools to undertake some local procurement, which it described as being “good for local business”.

The system, under which NSW departments and agencies purchase goods from an online catalogue of preferred suppliers, was introduced at a cost of about $25 million.

The state government collects a fee of up to 2.5 per cent on all items purchased by government departments.

Auditor-General Peter Achterstraat's report revealed that some public servants were refusing to use the system, finding it cheaper to purchase goods manually because they were able to negotiate a price lower than the State Contracts Control Board price listed in Smartbuy.

The auditor's report identified the complex website and search engine operations, the receipt functions and the product information and links to supplier catalogues as areas that needed improvement.

A Technology Department spokesman confirmed that nine major agencies used the system.
The spokesman said Smartbuy had experienced significant growth in usage over the past three years, with almost 100 per cent growth in the past 12 months alone.

He said comparing the price of goods on Smartbuy with those offered externally was inaccurate, as it failed to take into account other factors such as total cost of ownership and the capacity of suppliers to meet demand.

Opposition financial management spokesman Greg Pearce said the "whole procurement space was in the sights of the opposition for a complete shake-up".

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