| 4. In which ways is the initiative creative and innovative?
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Within PVE, significant progress has been made with the implementation of a new centralized management model which hosts not only the centralized procurement process and the state fleet management, but also the principles of separation of contracting-related functions (although ANCP/ESPAP is the entity running the contracting procedures, the expenditure comes from the budget of the entity who made the request for the vehicle, and who will be the end user), but also the responsibility of the user entities, the expenditure monitoring and budget control and the usage of green criteria in the procurement procedures for the state fleet.
To design, implement and communicate the new model for the State Fleet, the endorsement of the Minister of Finance played a key role, especially in what concerns the evolvement of its peers. In turn, each Minister, with competence to guide on transverse issues, endorsed this model and became responsible for promoting its usage by each of the entities under his/her umbrella.
The communication of this model was also done via direct contact with nearly 500 user-entities, focusing on the potential benefits of the new paradigm.
There was also a formal written communication to all public bodies explaining the new fleet management centralized model and the implications of the new model, the most visible of which being the fact that public entities were no longer allowed to launch contracting procedures for vehicles on their own, even if under a framework agreement created by ANCP/ESPAP.
PVE team developed and set up flowcharts and manuals on each of the new internal processes related to the buying process, which were shared with all public entities. The whole process included several stages, ranging from the entities formal request to its validation by ANCP (eg. compliance with maximum values defined per category of user), the aggregation of needs to increase the contracting volume and therefore get lower prices until the launch of the call off, ensuring the monitoring process to the delivery and registration of vehicles in SGPVE.
Above all, this centralized model required a change of mindset across public administration, and the implementation of these new management mechanisms, the new contracting and fleet management-related processes, the new framework agreements supported by the new Code of Public Contracts and PVE-related legislation were just the visible part of it. And, like in every process of change of mindset, had its adversities. Resistance towards the model was made by large contracting authorities, like the police, justice or the Ministry of Defence, and a huge effort in explaining the benefits was put in place.
This effort included a roadshow in 8 of the country’s major cities with an attendance of over 2.000 key stakeholders. Also, during the last two years a special training program was designed to the largest users of SGVE in order to address specific needs.
When PVE received a request for contracting a vehicle, always via SGPVE, different contracting alternatives are analyzed by PVE (Acquisition? Leasing?), taking into account the expected usage and typology. By doing this, PVE aims to assure the solutions provided to the end user will be the most economical advantageous.
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| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
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The stakeholders of this model have played a key role in its successful implementation. For a start, the endorsement of the Minister of Finance has been crucial to raise awareness to the system, its features and its benefits, among their peers, and to promote its set up and implementation across public administration, at every level. The centralized management could not run without the suppliers nor their commitment to its success and compliance with the rules of the framework agreement they belong to. Also, they have on several occasions shown their support to ANCP/ESPAP promotional activities and public events. There is also a set of public and private entities which provide specific support to ANCP during the design and preparation of each of the framework agreements, so as to assure that its rules comply with every legal and/or technical rule in that sector or category. One of the most important groups of stakeholders is the civil society and taxpayers. By decreasing the size of the State fleet and thus reducing State fleet-related public expenditure, taxpayers are, ultimately, those who benefit the most from this huge change in the management system. Adding to this reduction, the savings generated by aggregated purchases are very relevant.
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| 6. How was the strategy implemented and what resources were mobilized?
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Setting up and implementing such a model and the managing structure required both specialized human and technological resources.
For a start, the team members, all recruited with deep knowledge on a specific area of fleet management (contracting procedures, ePlatform procedures, vehicles registration processes, car insurance, dismantling of vehicles, etc.). This specialization was crucial to assure efficiency in the processes, a fast and accurate support to entities and the possibility of several contracting processes running smoothly and simultaneously, each for a different typology of vehicles.
Another key area that involved important resources lied in the structure and development of the technological tool to collect vehicle-related information from the entities, and to manage the state fleet system: SGPVE. This is nowadays a very powerful database, with different levels of information for each of the 27.000 vehicles of the state fleet. Available information for each vehicle ranges from vehicles characteristics (Made/Make and model, plate number, registration data, detailed technicalities, and any specific features it may have) to usage data (fuel consumption and mileage data, car insurance data, entity it is allocated to, just to mention a few examples). Mileage data for each vehicle is entered by the entity it is allocated to, on a regular basis, and then validated by PVE team. For most state fleet vehicles, fuel consumption data is entered directly by PVE based on monthly reports received from fuel suppliers.
The total cost of setting up the technological system (SGPVE) and the business process model amounts to around EUR 400.000 (internal and external costs).
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| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
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The results have been extremely positive. In the first 2 years, ANCP was responsible for contracting almost 1,500 vehicles (5.5% of the state fleet). ANCP purchased vehicles of all types, light and heavy, tailor-made and motorcycles, varying from members of the government to police vehicles with specific patrol equipment.
This new model also allowed a significantly better assessment control of the State fleet, including on the number of vehicles affected to each public entity, vehicle typology, mileage, age, maintenance and fuel costs. Now it is possible to have aggregate information to support decision making in a rational and harmonized way.
One of the main results was the reduction of the fleet which exceeded 5% comparing 2012 with 2009. The dismantlement of more than 1,500 vehicles alone had a significant impact in the decrease of costs in areas like maintenance, insurance, fuel and parking, estimated at around EUR 7.5 million.
The assessment of the State fleet provided by SGPVE data and the new model allowed ANCP/ESPAP to better understand the reality of the State fleet. One of the first and major conclusions was that some public entities fleet outnumbered their actual needs, and in some cases the vehicles’ typology did not match the jobs’ requirements, or was so old that maintenance costs were virtually unbearable. In order to force entities to become more rational in their requests for new vehicles and to improve the match between State fleet vehicles and the users’ jobs requirements, PVE promoted new legislation known as 3 to 1 (actually and since 2013, the rule is now 2 to 1). This meant that for each new vehicle an entity wanted to contract, they had to promote the disposal of at least 3 that were allocated to that entity or Ministry they belonged to. Entities were therefore forced to look at their own fleet and promote a more rational and intensive usage of the remaining vehicles.
In what concerns the centralized procurement of vehicles, we obtained savings of 26% on a total expenditure of EUR 4 million, between 2009 and 2012.
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| 8. What were the most successful outputs and why was the initiative effective?
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Public entities named internal auditors that checked all processes related with the inputs of SGPVE, and the acquisitions by call offs or framework agreements.
Besides, ESPAP is preparing, at this moment, a survey to be applied to all entities using SGPVE, regarding the daily usage and improvements of the system.
All entities were contacted in order to provide information on the inventory of vehicles they had. All information was integrated on SGPVE and, on a daily basis, reports were extracted and compared to the entities records. Moreover, were made for several years a fleet analysis to the entities with more vehicles to assure the information’s accuracy between the records on SGPVE and reality of the vehicles.
Besides this, data on the vehicles allocated to each entity is available online for each entity’s supervisor to monitor. Apart from this online information, formal reports are prepared and delivered every 3 months to each entity, with analysis on its own fleet, consumption and mileage data per vehicle, fleet age, etc. The main objective for delivering these reports is for PVE to provide each entity with a formal document to help monitor and, if necessary, promote the required internal adjustments, especially regarding high fuel consumption levels.
The SGPVE also sends regular alerts to entities on coming deadlines for end of contracts, car insurance expire dates, among others.
There has also been a huge effort from PVE team in what concerns the training provided to SGPVE users in the entities, with a training program design for the specific needs of the different types of users.
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| 9. What were the main obstacles encountered and how were they overcome?
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The change was difficult in some cases because entities lacked the power of purchasing the vehicle they wanted. In some cases, users wanted to purchase a specific vehicle from a particular brand and to change this mindset has proven to be a tough task, despite the continuous effort to present the entities with the benefits of this system (internal fleet management is nowadays far less time-consuming than previously; all complex contracting-related procedures are conducted by ESPAP, contact value is in average considerably lower that if the procedure were conducted by each entity individually, given the synergies generated by the aggregation of demand).
Nevertheless, the process of data collection from entities is on-going, but entering it in SGPVE database for the first time is time-consuming and depends, on a great extent, on the entities good-will in entering it or in providing it to PVE, depending of the type of information. Possible solutions to overcome this problem are being explored for future implementation.
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