All central Government departments will be required to take part in a centralised procurement process for vehicle lease and vehicle purchase from next year. The move is designed to save money.

Local authorities are not required to take part, although they are permitted.

The move follows the creation of the Efficiency and Reform Group (ERG) in May 2010, which has absorbed the Office of Government Commerce (OGC) and taken control of Buying Solutions – the two major Government purchasing organisations.

“As part of this work, the ERG is leading on the creation of a new centralised procurement capability which will be mandated across all Government departments,” a Cabinet Office spokesman told Fleet News.

“Centralising fleet procurement provides a unique opportunity to re-shape the way fleet is currently procured and there is an immediate need to rationalise the existing fragmented buying landscape for fleet to drive greater efficiency and deliver cash savings.”

Buying Solutions has also confirmed it is organising a second e-auction for the procurement of fleet vehicles and associated services after the first such exercise earlier this year was heralded a success.

The next online auction will take place in January and will see suppliers bid against each other to secure these public sector fleet contracts.

The first e-auction, which took place in August, involved departments including the HMRC, the Department for Work and Pensions, the Metropolitan Police and the Health Services Executive combining to aggregate spend.

A saving of just over £900,000 against a pre-auction value of £3,061,210, which equivalent to around 30%, was achieved.

“This e-auction allowed us all to take full advantage of the best available rates in the market at the time by leveraging the aggregated spend,” said Pete Gleeson, HMRC category lead travel and transport. “It also kept the cost of the procurement down by pooling our resources.”

Effective procurement of fleet services is vital if public sector bodies want to save money, says Automotive Leasing, LeasePlan’s specialist public sector fleet services provider.

In its recently published white paper it said: “The rapid development of framework agreements such as those provided by OGC/Buying Solutions offers quick pricing facilities. This shortens the decision cycle and the costs of quite major strategy reviews. Such cost efficiencies must therefore be considered as part of the overall new approach.”