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 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, promote sustainable procurement, achieve better quality, lower 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.
Financial manoeuvrability and sustainability in cooperation with the public sector
Every year the public sector buys goods and services for around 424 billion DKK (approx. EUR 57 billion) through private companies. Around 3 percent of the purchases are made through SKI.
SKI’s goal is to secure sustainable procurement agreements and financial manoeuvrability in close cooperation with the public sector. When we stand together we can obtain more than we can by acting alone.
Price is an important parameter in a public economy under pressure. How price, sustainability, quality and other parameters are weighted is decided individually for each contract and based on a thorough analysis of each relevant market and in close cooperation with the procurement professionals in the public sector.
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 that 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 procurement agreement 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 procurement agreement that defines which goods and/or services can be bought through the agreement and at which conditions and prices. SKI also handles the management of the agreement through its lifetime – typically four years.
By preparing procurement agreements across the public sector we help organisations secure financial manoeuvrability at local, regional and national level. Along with the savings that are realized through use of the agreements this contributes to meeting 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 collaborates with experts and procurement professionals at local, regional and national levels as well as self-governing institutions, semi-public companies and utilities services. All parties meet in work groups that cooperate in designing the procurement 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 procurement agreement is established. We are in close contact with both companies and 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 procurement 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) can compete in the tenders. Of the 1,017 suppliers on SKI’s agreements in 2023 around 85 percent were companies with less than 250 employees. 65 percent of the companies had fewer than 50 employees.
Procurement professionals from the local, regional, and national level and other public entities play a key role when SKI establishes procurement 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 2023 490 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 and is a central procurement organisation that offers procurement services to the Danish public sector on commercial terms.
The Danish public sector buys goods and services for around 424 billion DKK (approx. EUR 57 billion) every year. Around 3 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.
In 2023 around 1,000 different public organisations used SKI’s procurement agreements to buy goods and services for a total amount of 14.3 billion DKK (approx. EUR 2 billion). Using SKI’s agreements, the public sector saved an estimated 2 billion DKK (approx. EUR 250 million). The savings are a result of both lower prices and administrative savings because the public sector entities do not have to conduct around 2,000 yearly tenders themselves. Around two thirds of the procurement amount is within information technology.
SKI is 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 financed through the public sector’s use of SKI’s agreements.