Travel and legal deal to save NZ public sector $178 million

16 December 2011

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18 December 2011 | Rebecca Ellinor

The New Zealand government hopes to save $178 million (£87 million) on its legal and travel costs over the next seven years after agreeing a deal with 39 law firms and up to five airlines.

The arrangement it has negotiated is available to all agencies in the public sector including councils and up to 2,500 schools.

Announcing the deal this week, minister for economic development Steven Joyce, said it showed the power of the whole government when contracting services.

“We’ve shaved an average of 18 per cent off the $100 million [£49 million] annual external legal services bill, a great result,” he said.

The legal services contract covers a panel of law firms that are large, medium and small. The government said robust monitoring will for the first time enable agencies to compare each company’s ongoing value for money when considering who to choose.

The first contracts for air travel have been awarded to Air New Zealand, Emirates, Lufthansa and Qantas for up to seven years. Negotiations continue with one other airline. Joyce said: “Air travel is a significant cost for government and reducing it by more than $70 million [£34.3 million] over the life of this deal is another great result.”

The contracts are part of the public sector-wide Government Procurement Reform Programme, which aims to make government purchasing as efficient as possible and produce savings.

The New Zealand government spends around $30 billion a year (£14.7 billion) on goods and services. The latest deals join last year’s all-of-government contracts for office consumables, passenger vehicles, print devices and desktop and laptop computers. The government said these contracts remain on track to deliver $115 million (£56 million) savings over five years.

Earlier this week SM reported on an agreement between local buying consortia and the UK government to make use of a national deal on business travel. Umbrella group Pro5 believes the framework could save public bodies without a travel management company up to 20 per cent on the category.

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