Strategic Procurement Office Update 2024
Explore the latest updates from the Finance and City Governance Committee's Procurement Update, focusing on market movements, SP103 Procurement Policy and Plan, and local market conditions. Gain insights into market trends, policy changes, and strategic initiatives driving organisational services. Stay informed about procurement strategies and market conditions shaping future decisions.
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Presentation Transcript
Finance and City Governance Committee Procurement Update Strategic Procurement Office Organisational Services 3 September 2024
Contents # 1 Title Market conditions Slides 3-5 2 SP103 Procurement Policy and Plan annual review 6 3 Systems update (SAP Ariba) 7
Market Movements June Qtr 2024 Previous Quarter (Q3 FY24) Latest Quarter (Q4 FY24) Quarter Change (%) Index Name Commentary Period of disinflation, however interest rates remain elevated. Small-medium businesses are feeling pressure. CPI (All Groups) - % change 3.6 3.8 5.6% Chinese economic uncertainties weighing on crude oil demand outlook. Fuel 158.4 155.6 (1.8%) Wholesale electricity prices down from Q4 FY22 record but remain historically elevated. Significantly lower price volatility. Electricity 112.7 112.2 (0.4%) Increases in cement products have been driven by elevated labour, energy and freight costs. Cement 148.0 149.7 1.1% Steel products have decreased, driven by falling demand for steel globally, and weak demand for early-stage construction materials Steel Beams 138.7 136.6 (1.5%) Price is subject to change for new model computers (normally 15-18 month update cycle). Monitor pricing remains steady Cisco pricing remains steady with high demand Computer and Electronic Equipment 121.1 121.8 0.6% Source: Australian Bureau of Statistics, June Quarter Report 2024
Market Conditions Update: Local Significant capital work forecast throughout QLD Unfilled construction vacancies double pre-pandemic levels Peak labour demand expected 2027-28 (78% surge vs. 2023/24) Key roles: Electricians Structural steel and welding trades Earthmoving plant operators Mixed input materials costs: Higher - gypsum, copper and cement Higher - timber and joinery (Brisbane) Lower - steel prices due to weak global demand
Market Conditions: Construction International Construction Costs Comparison report benchmarks 100 global cities Despite high inflation in Australia, Brisbane's position on the list fell (46>51) due to a weaker AUD Brisbane is 8th in Asia-Pacific however, most less costly cities benefit from low labour costs and proximity to Chinese industrial producers.
SP103 Procurement Policy and Plan The 2024-25 SP103 reduced from 37 pages to 15. Two sections have been consolidated into a new section titled Procurement Policy and Contract Manual using simplified language. Focus on Essentials Unchanged Policy Policy settings unchanged from 2023-24, providing continuity and a continued focus on value delivery Promote innovation Emphasis on ensuring the procurement framework supports and promotes supplier innovation and partnerships Lower cost to do business Continue to remove barriers to doing business with, and reducing cost to sell, to Council.
Systems Update (SAP Ariba) Council s new cloud-based sourcing and procurement system Provides modern interface for both buyers and suppliers Successful go-live on 24 June 2024 Supplier registrations: 5,200 active vendors migrated 1,529 interested suppliers self-registered Sourcing processes 26 full processes underway (>$200k) 45 Guided Buying Request for Quotes to market (<$200k) Contract workspaces 1,400 set up at go-live 51 new set up by Council officers
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