When you stand together, it is possible to reach higher goals than when you are alone. Therefore, we in Denmark have a tradition of gathering together all the procurement entities in the public sector. This is a tradition that goes back to the 19th century, where the first Danish consumer cooperatives were established.
This rationale also applies to the public sector. When we join forces in respect to public procurement, we can exert influence on the market and achieve better quality, better prices and better conditions. That is why SKI was founded in 1994 as a limited company owned by the Danish state and Local Government Denmark (KL) the association and interest organisation of the Danish municipalities.
Quality, conditions and price
Every year the public sector buys goods and services for around 365 billion DKK (approx. EUR 49 billion) through private companies. Around 2,5 percent of the purchases are made through SKI.
The goal is to secure good quality products and services at good conditions and at better prices than each individual public organisation can obtain acting alone. Price is an important parameter in a public economy under pressure. However, SKI also helps the public sector by securing better solutions, higher quality and increased competition. How price, quality and other parameters are to be weighted is determined from agreement to agreement and based on a thorough analysis of each relevant market and in close cooperation with the public customers that will eventually use the agreements.
All public organisations are subject to the public tendering rules of the European Union and national law. The rules must, among other things, ensure that private companies which wish to trade with the public sector are able to make their offers through a tendering process that guarantees that all companies are treated equal in a transparent process. The aim is to ensure that the framework agreements are awarded to the companies which make the most economically advantageous offers. Based on quality as well as price.
When SKI carries out a tender, we ensure that all public organisations whether at local, regional or national level are adhering to the tendering rules. By joining forces through a SKI framework each public organisation avoids the often long and cumbersome process it would be to complete a tender.
Procurement through SKI’s framework agreements covers around 2,5 percent of the Danish public sectors’ total yearly procurement volume.
The public sector organisations thus carry out many of their own tenders and establish their own procurement agreements. Either individually or in other communities.
The result of a tender process is a so-called framework agreement that defines which goods and/or services can be bought through the agreement and at which conditions and prices. Using a SKI framework agreement procurement officers can order goods and services while ensuring that they adhere to the rules. SKI handles the contract management through the lifetime of the agreement – typically four years.
By preparing framework agreements across the public sector we help organisations at local, regional and national level to meet the ever increasing expectations regarding welfare – whether welfare is interpreted as more ecological food, more windmills, tax cuts, more home help for senior citizens or a new swimming bath.
SKI’s framework agreements cover goods, services and information technology. The full list of framework agreements can be found here.
SKI works together with experts and procurement professionals at local, regional and national level as well as self-governing institutions, semi-public companies and utilities services. All parties meet in work groups that cooperate in designing the framework agreements, so we are sure that the agreements match the needs of the public sector.
The cooperation also includes the suppliers that deliver the goods and services. We conduct thorough analyses of the markets every time a new framework agreement is established. We are in close contact with trade associations and this ensures that the demands in our agreements are in accordance with the market.
A market for both small and large companies
The public sector needs framework agreements with the right mix of suppliers.
SKI’s mix of companies shows that SKI’s tenders are formed so that many small and medium-sized enterprises (SME’s) are able to compete in the tenders. Of the 337 suppliers on SKI’s agreements in 2019 around 76 percent were companies with less than 250 employees. 49 percent of the companies had fewer than 50 employees.
Procurement professionals from the local, regional and national level and other public entities play an important role when SKI establishes framework agreements.
So do nurses, teachers, occupational therapists and IT consultants.
If the goods and services are intended to function, the professionals who use them in their everyday work life must also be involved in the process.
I 2018 411 representatives from the public sector were involved in establishing SKI’s framework agreements.
SKI – Staten og Kommunernes Indkøbsservice A/S – was established in 1994 as a public owned limited company.
We are owned by the Danish State (55 percent of the shares) and Local Government Denmark (KL) the association and interest organisation of the Danish municipalities (45 percent of the shares).
SKI is a not-for-profit organisation. This means that any profit is used to develop more and better framework agreements.
The Danish public sector buys goods and services for around 365 billion DKK (approx. EUR 49 billion) every year. Around 2,5 percent of the purchases are made through SKI’s framework agreements that SKI establishes on behalf of, and in close cooperation with, the public sector.