Innkaupará ð stefna Ríkiskaupa Grand Hótel Reykjavík, 8. nóvember 2005

1. Innkauparáðstefna RíkiskaupaGrand Hótel Reykjavík, 8. nóvember 2005 Modernization of public procurement.By Søren Jakobsen, CEO.

2. Modernization of public procurement.Agenda. 2. • A few facts about the company SKI • The company’s current strategy (as from Dec. 2002) • SKI in an European perspective • Our electronic tendering system; ETHICS • The future strategy of SKI • Comments and questions

3. A few facts about the company 3. • Established in 1994 as a limited company. • Business model • A percentage (typically 1%) of turnover on contracts from vendors • Field of activity • Contributing to greater efficiency in the area of public purchasing by establishing and maintaining attractive framework agreements • Number of employees: 43 • Number of framework agreements: approximately 55 • Owners • Ministry of Finance (55%) • KL, the National Association of Local Authorities (45%) The company is situated in the heart of Copenhagen

4. A few facts about the company.SKI’s turnover. 4. 2004 +45% (million DKK.) 2004 Total turnover: 5.100 + 1.000 = 6.100 m. DKK = 880 m. EUR Result: 9,1 m. DKK 5.128 +23,3% 2004 47% 30% 10% 13% -3,5% +5,8% +8,5% 4.112 4.027 Est. 2005 Ordinary turnover: >+25% 3.886 3.712 1998 56% 25% 15% 4% +12,2% +20,4% 3.082 +13% 2.748 +37% +36% +24%

5. A few facts about the company. SKI’s focus on products and services. 6. 125 billion DKK Building and construction Roadwork Special software Clothing Cleaning Hospital equipment Window-cleaning Medicine Special hardware Low Craftsman services Eldercare IT operation Hospital articles Ambulance-service & patient transport IT- and management consultancy services Lawyer- and accountant-service IT-outsourcing Level of Standardization Open Source Handicap aid Advertising SKI’s focus in 2006 Scanning of construction drawings Newspapers/magazines SKI’s focus in 2003 Gas High Electricity Printed matters Food Financial services Travel services 4 billion DKK Cleaning articles Tele- and data communication Office stationary 8 billion DKK IT-standard software Furniture IT for education IT-standard hardware White goods Vehicles Fuel Office machines Large Potential turnover Small

6. The company’s current strategy (as from Dec. 2002).Mission. 7. • National Procurement Ltd. creates increased returns of scale in public procurement to the benefit of its customers and the welfare of the Danish citizens. • The advantages are secured by maintaining close ties between customers as well as suppliers, but at the end of the day National Procurement Ltd. acts primarily in the interest of the public sector. • The customers are secured a more attractive price and quality than they would be able to obtain themselves, procurement expenses are held to a minimum as there is no need for them to carry out own tenders and electronic procurement systems secure efficient buying. • The suppliers are secured lower costs due to reduced public tendering and reduced marketing costs due to National Procurement Ltd.’s centralised marketing and e-procurement systems. • National Procurement Ltd acts in accordance to commercial principles and at the same time promotes green and energy saving procurement.

7. The company’s current strategy (as from Dec. 2002).Vision. 8. • By securing attractive framework agreementsthe Danish National Procurement Ltd. wants to play a central role in contributing to greater efficiency in the public procurement. • By establishing close partnerships with the public procurement agents, National Procurement Ltd. wants to establish and maintain framework agreements that are in demand, make a difference for our customers and strengthens the company. • National Procurement Ltd. wants to improve the professional dialogue and cooperationwith public procurement agents, suppliers to the public sector and consultants. • National Procurement Ltd. is committed to a policy of acting as an innovative and committed employerwith the capacity for attracting, maintaining and developing skilled and motivated staff.

8. The company’s current strategy (as from Dec. 2002).Strategies and specific action plans. 10. Priority • Discontinue unsatisfactory framework agreements • Strengthen analyses and follow-up • Strengthen user-involvement • Extend co-ordinated purchasing 1. Attractive framework agreements Why? How? • Dissemination of knowledge • Meetings for procurement agents • New marketing strategy • Partnership programmes • Education and training of customers • Offer consultancy • Publish guides to public procurement 2. Partnerships with public procurement agents • By securing attractive framework agreements National Procurement Ltd. wants to play a central role in contributing to greater efficiency in the public procurement • By establishing close partnerships with the public procurement agents National Procurement Ltd. wants to establish and maintain framework agreements that are in demand, make a difference for our customers and strengthens the company • National Procurement Ltd. wants to improve the professional dialogue and cooperation with public procurement agents, suppliers to the public sector and consultants • National Procurement Ltd. is committed to a policy of acting as an innovative and committed employer with the capacity for attracting maintaining and developing skilled and motivated staff • Adjustment of the organisation • Project-groups regarding tendering • Further improvement of qualification • Involvement of employees • Further improvement of management • Benchmarking of efficiency • Secure key qualifications 3. Revitalising the organisation • Customer prioritisation • Differentiated targeting of customers • Prioritise use of resources to match potential turn-over • Partnerships with consultancy firms and architects • Commercial use of ETHICS 4. Focused marketing activities 5. Focus on profitability • Strengthen financial control • Strengthen debtor control • Strengthen employees knowledge of expenditure • Create benefits for suppliers • Marketing in cooperation with suppliers • Consultancy regarding choice of supplier • Precision of demands to suppliers 6. Active supplier-policy • The Public Procurement Portal must function according to demand • Development of an e-procurement catalogue that is independent of e-marketplaces 7. Dissemination of e-procurement • Establish close relationships to: • Shareholders • Interest groups • Trade organisations • Consultants • Media 8. Strengthen closepartner-relationships

9. The company’s current strategy (as from Dec. 2002). SKI’s primary goal. 11. • SKI’s main challenge: How can SKI secure attractive framework contracts, that are better than the contracts that each of our customers in the public sector can obtain themselves? • Exactknowledge concerning the demands and needs of the customers through their active involvement in SKI’s processof generating framework contracts • Co-ordinated purchasing where the customers before and during the tendering process are invited to pool their expected turnovers on the different framework areas • Secure an effective competition amongst the potential suppliers.

10. The company’s current strategy (as from Dec. 2002). SKI’s turnover and result. 12. 2004 2000 1999 2001 Years result (in million DKK) 2003 2002 Total turnover from framework contracts (in 1.000 DKK)

11. SKI in a European perspective.A study of 12 central procurement agencies in 11 countries. 13. • Belgium • Denmark • Finland • France • Greece • Ireland • Italy • United Kingdom • Sweden • Germany • Austria

12. SKI in a European perspective.The size of the procurement agencies. 14. Relatively small specialised agencies. Consultancy and coordination of tendering and purchasing Focused on framework contracts. All three agencies in this group are limited companies. A more varied group. UK resembles the above group in most aspects. Greece concentrates on consultancy services. Ireland has many other responsibilities – and is therefore a very large organisation. Ireland and France are characterised by a large degree of decentralisation.

13. SKI in a European perspective.The size of the procurement agencies. 15. DK has the second largest turnover if compared to the size of the population 2.749

14. SKI in a European perspective.The size of the procurement agencies. 16. • SKI has relatively few framework contracts • In comparing one must remember that there is a difference in the breadth of the framework contracts Ireland has not supplied data

15. SKI in a European perspective.The size of the procurement agencies. 17. • SKI’s relatively high turnover and few frame-work contracts results in a high average turnover per framework contract.

16. SKI in a European perspective.SKI’s characteristics. 18. • The business oriented strategy has resulted in framework contracts that had modest turnovers, were time-consuming or complicated have been unrolled. • The companies’ status as a limited company and the actions of the companies’ board means that the strategy is very focused and that political considerations are reduced to a minimum. • SKI has been spared from time-consuming political accounts.

17. Our electronic tendering system.ETHICS is a central element in our new strategy. 19. Besides being an exciting business opportunity ETHICS offers: Compliance with EU rules • Complies with thresholds, time frames, methods and standards Efficiency Transparency • Internal productivity • Development and re-use of knowledge and legal terms • Workflow controlled execution • Document Library • Easy involvement of new users • Management overview and control • Growth in turn-over • Strengthen user-involvement and accelerate use of contracts • Efficient use of experts in the evaluation phase • Help customers run own tenders • No complaints from vendors have lead to legal issues • Ability to handle an increasing number of complaints in the future • Involvement of users easy and meaningful [inno:vasion]

18. The future strategy of SKI. Primary focus points. 20. 1. wave 2. wave 3. wave Today 2007 • A deepening and broadening of partnerships • Knowledge sharing & value-based leadership • Marketorientation • Revitalisation of the organisation • Processes and systems • Building up of competences

19. Comments and questions … 21.