As underlined for several weeks, the prices proposed by purchasing centers for public orders will be analyzed by the General Inspectorate of Finance (IGF).
A few weeks after the controversy, the state reacted. On Tuesday 5 November, the minister responsible for public accounts, Laurent Saint-Martin, announced to RTL that he had “diligently carried out a mission of the General Inspectorate of Finance”in order to review the prices at which public authorities – State and local authorities – purchase their supplies.
Light bulbs, lamps, tables… When these actors purchase their supplies “more expensive than what you might buy at the supermarket, obviously this raises questions”recognized the government member. The investigation should “understand how this central purchasing mechanism works”reported in recent days for prices that sometimes seem much higher than market prices.
The supply catalogs of purchasing centers show prices sometimes up to double those that can be found in shops, even before having negotiated prices in the case of large quantities ordered. A four-colour BIC pen, for example, is invoiced at 2.26 euros by UGAP, the main state purchasing centre, while it is sold at 1.99 euros per piece on the UGAP website, and even cheaper in large-scale retail trade. “The effectiveness of state purchases is a question of good public management,” insisted Laurent Saint-Martin. We cannot ask the French to participate in this collective effort [de réduction du déficit, NDLR] and at the same time not being efficient in the management of public funds.”
Possible savings of up to 10%.
These prices are above the market “sometimes it can be justified”nuanced Laurent Saint-Martin, who nevertheless wants “understand” the functioning of public procurement e “optimize so that it costs the taxpayer less”. This is because, to avoid corruption, local authorities are subject to the public procurement code: for expenditure exceeding 40 thousand euros they must go through a tender or a purchasing centre. With constraints that can sometimes explain the inflated prices: favoring Made in France, guaranteeing a low ecological impact… Not to mention that suppliers also claim to pass on the cost of the time taken to respond to tenders, which are more complex than a simple quote.
a relationship published at the end of 2023, the General Inspectorate of Finance estimated that local authorities could achieve savings of up to 10% on their purchases, or around 5 billion euros, in “rationalize and professionalize” the latter, but emphasized that this objective “It cannot be considered achievable in the short term”. Small and medium-sized municipalities have reported difficulties in negotiating the prices offered by suppliers. Regarding the use of purchasing centers, it has often been explained “from an emergency or a concern for simplicity” Moreover “the community does not systematically see attractive prices”.
Interview between Time.news Editor (T) and Finance Expert (E)
T: Welcome to Time.news, and thank you for joining us today. With recent developments regarding public procurement pricing, we’re eager to delve deeper into this issue. Today, we have an expert in finance and public management with us. Let’s start with the current situation. What prompted the General Inspectorate of Finance to investigate the prices proposed by purchasing centers?
E: Thank you for having me. The investigation was initiated following rising concerns about the significant discrepancies between the prices at which public authorities procure supplies and the prices available in the retail market. Minister Laurent Saint-Martin pointed out that purchasing items like light bulbs and basic office supplies at rates much higher than supermarket prices raises legitimate questions about public spending.
T: It certainly does. The article mentions specific examples, such as a four-color BIC pen priced at 2.26 euros by UGAP while it was available for 1.99 euros elsewhere. How widespread are these pricing discrepancies, and do they indicate a systemic issue?
E: Yes, these discrepancies seem to be quite rampant. In many cases, purchasing centers have been charging prices that could be double what one might find in the market. This isn’t just an isolated incident; it suggests a broader issue regarding how public procurement is managed. It appears that some purchasing centers may not be fully leveraging the negotiating power they have when ordering large quantities.
T: Given these findings, what implications do you foresee for public management and budget efficiency?
E: The implications are significant. As Minister Saint-Martin highlighted, effective public procurement is essential for good public management. If the state expects citizens to contribute to efforts in reducing the deficit, it must also exemplify efficient use of public funds. Addressing these inflated costs could lead to substantial savings—potentially up to 10%—which could then be allocated to more pressing areas of public need.
T: So, could we say that improving procurement practices isn’t just about saving money, but also about improving trust in public institutions?
E: Absolutely. Ensuring that taxpayer money is spent wisely can help restore public confidence in governmental institutions. When people see that the state is vigilant about its spending and transparent in its practices, it enhances civic trust. Conversely, persistent inefficiencies and lack of accountability can lead to public disillusionment.
T: That’s an important point. What measures do you think should be taken to improve this procurement system?
E: A few steps are essential. First, increasing transparency around pricing and procurement processes is crucial. Secondly, training for procurement officers on market analysis and negotiation techniques will empower them to make better purchasing decisions. Additionally, establishing benchmark prices against market averages can help guide purchasing centers in their pricing strategies. Mechanisms for regular audits and compliance checks could also ensure sustained oversight.
T: It sounds like a comprehensive approach is necessary. Before we wrap up, is there anything else you believe is important for our audience to know about this situation?
E: Yes, I think it’s critical for citizens to be engaged in public discussions about government spending. Awareness and advocacy can drive demand for accountability within governmental operations. As recent events have shown, vocal public scrutiny can lead to necessary changes, so it’s vital for individuals to stay informed and involved.
T: Thank you for your insights today. It’s clear that effective public procurement is central to ensuring responsible governance, and we appreciate your expertise in unpacking this complex issue.
E: Thank you for having me; I enjoyed the discussion!