Procurement News: procurement in paradise, Nissan/Renault get close, and NZ eProc…

by Peter Smith on September 27, 2010

(Procurement) Problems in Paradise?

The Honolulu Star Advertiser reports that it is illegal for Hawaii to stipulate quotas for employing local workers to suppliers bidding for work:

The U.S. Department of Housing and Urban Development says a law that requires local residents get 80 percent of the jobs on state and county construction projects violates its procurement rules, the Governor’s Office said today.

The Governor, Linda Lingle, who opposed the idea anyway, sounds like a lady who understands procurement and economics.   “In addition to the legality of an ambiguous residency quota and procurement preference, I vetoed these measures because they discourage job creation, delay and increase the cost of public construction projects, and stall our economic recovery.”

Renault and Nissan announce more co-operation

The Nikkei Business Daily, reported by Reuters, says that:

The companies plan to design a common platform for midsize sport utility vehicles and sedans, and also plan to standardize 70 key components — including windows and brakes — that make up about 80 percent of the total cost for parts and materials..

There are ambitious cost saving targets; “the companies expect to cut parts procurement costs for midsize vehicles by about 30 percent, or several hundred billion yen a year, through bulk purchasing…”

That seems a very large saving given that each firm must have considerable economy of scale itself ? But I guess the standardisation process might generate much of that benefit, irrespective of the additional collaborative leverage.  Aggregating demand clearly has much more potential benefit when specifications are also aligned.  Supplier risk management will also of course be even more important for the participating firms as critical suppliers become even more critical.  Remember this?

New Zealand government looks to invest in eProcurement

Stuff website in New Zealand reports that a “major revamp of a government procurement website will cut the costs and time involved in bidding for and awarding contracts, the Economic Development Ministry says.”

The NZ government are going to the market early next year to look for a new public procurement platform; it sounds like they want something that provides both a ‘portal’ for advertising government procurement opportunities and a tender evaluation tool, with some standardisation of approach built in.  I can think of a few suppliers who might be interested; but when the client says “can you pop in for a quick chat about your proposal…”  -  it’s a long way!

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