Government to save $18.5 million on vehicles

Minister for Economic Development Gerry Brownlee today announced the awarding of the first all-of-government contracts for passenger vehicles.


The contracts will save the taxpayer $18.5 million over the next five years, as government agencies get better value and efficiency from the way they plan, buy, service and utilise their passenger vehicle fleets.


"The government is getting serious about using procurement to increase efficiency and save money for taxpayers," Mr Brownlee said.


"The vehicle contracts will save $18.5 million - around 8 per cent - on current vehicle expenditure, while improving safety and environmental standards."


A panel of different suppliers will ensure that agencies have plenty of choice. The first three contracts have been signed with Hyundai, Mitsubishi and Toyota. Up to seven additional suppliers may shortly join the panel.


As well as agreed prices for vehicles in the catalogue, there are pre-agreed government-wide discounts for vehicles that are not in the catalogue.


"Savings through the vehicles contract are just the start," Mr Brownlee said.


"The government is also looking to help agencies manage their fleet of 18,000 vehicles more effectively.


"I've launched a fleet optimisation project that will help departments decide if all their vehicles are needed, and if they're being used efficiently."


The vehicles contract is one of an initial group of four all-of-government contracts that together are expected to deliver savings of over $115 million over the next five years. The contract for office supplies was announced in July, and contracts for laptop and desktop computers and print/copier devices will be announced shortly.


Cabinet has asked officials to look at developing all-of-government contracts for other government purchases including external legal services, travel, recruitment, ICT hardware and utilities.


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