Electronic auctions will be key to driving down government procurement costs to free up funds for service developments.
Speaking at the Government Computing conference in London this week John Oughton, chief executive of government spending arm the Office of Government Commerce (OGC), said that e-auctions will become a central tenet of public sector efficiency targets.
Government departments are charged with finding £20bn by 2008. The OGC now says that e-auctions will be crucial to achieving this.
"We are looking to reduce the procurement costs and believe e-auctions should be more widely used than at present," said Oughton.
Take-up of e-auctions has been "disappointing" to date but work was being done to drive up use, said Hugh Barrett, chief executive of OGCbuying.solutions.
"We want to make it easier to decide which items are suitable for e-auctions," he added.
The NHS Purchasing and Supply Agency (NHS Pasa) has made "startling" levels of savings since introducing e-auctions, NHS Pasa's chief executive, Duncan Eaton, told delegates.
"We will continue to use e-auctions. But you need to be clear: it's not suitable for all procurement," he said.
The OGC has been working with the Business Application Software Developers Association (Basda) to develop a version of XML that makes e-procurement easier for public sector bodies sharing product information.
"XML technology is proven, it is low cost and simple to operate; so take-up should be a relatively easy step for both government and suppliers, whatever their size," said Dennis Keeling, chief executive of Basda.
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