Year 2014

Review of events in 2014

Hansel’s task is to increase productivity in state procurement operations. The year 2014 was the second of the 2013–2017 strategy period. Hansel’s strategic objective is to assume a stronger role in developing government procurement and to collaborate actively with government entities. Additionally, Hansel wants to be a pioneer in responsible and innovative public procurement, increase its offering in tendering services for its customers, and implement electronic tendering tools. In this strategy period, Hansel will also focus on co-operation with customers and suppliers, contractual supervision and developing staff competencies.

In connection with the mid-term review of the strategy in October 2014, it was noted that no changes have occurred in the operational environment or owner’s expectations that could be regarded as substantial enough to revise the strategy prior to its termination in 2017. The strategy period, which began in 2013, has proceeded according to plan. In some respects, its progress has been faster than planned; whereas with regard to the electrical tendering solution, for example, such progress has occurred more slowly, due to the Market Court deliberations.

The new procurement directives that came into effect at the beginning of 2014 imply renewal for the procurement units. The pivotal goals of the directives are to renew and modernise the regulations, intensify the effectiveness of the use of public funds, improve the participatory potential of SMEs, and promote taking social perspectives into account. The directives must be nationally enacted by 18 April 2016. Hansel’s CEO is involved in the steering group appointed by the Ministry of Employment and the Economy preparing the renewal of procurement legislation, and the Chief Legal Counsel is involved in the legislation-related preparation group and secretariat.

Renewal of procurement legislation will significantly affect Hansel’s activity. Of the changes affecting Hansel’s position and tasks, the most important are connected with the specifications of central procurement functions and procurement support functions, central procurements exceeding the limits, and renewal with respect to framework agreements. Pivotal changes affecting tendering include, among other things, policy-based amendments to procurement procedures, the changes connected with electrical data exchange procedures and the requirements linked to contractual revisions, as well as a large number of modifications associated with the advancement of the procurement process. Under the new legislation, horizontal policies such as compliance with the obligations of environmental, social and labour legislation, preventative measures against the grey economy and improvement in the position of SMEs are all being emphasised. Alongside renewal, international central procurements will become possible within the area of the European Union.

Social digitalisation is creating new opportunities for Hansel. The company’s IT infrastructure is currently being built in order to further reduce the need for manual work. By means of various service entities, an attempt will be made to ensure that information is maintained in only one location, from which it can be accessed by several individual channels. More use will be made of automation in customer and supplier cooperation, agreement supervision and reporting on procurements. The electrical tendering solution procurement decision has been made, and deployment of the system is under preparation. The system will first be introduced to Hansel and its use will subsequently be extended to customers.

Hansel will continue the significant addition of tendering services for its customers linked with procurements in accordance with its strategy. Tendering services as a share of net sales in 2014 totalled seven per cent, but growth compared to the previous year was 82 per cent, ending on €671 thousand (€368 thousand in 2013). In 2014, Hansel’s largest tendering services-based customers were the State Treasury, the Legal Register Centre, the Finnish Police and the Finnish Transport Agency. Significant projects included the information and case management system tendering for the State Treasury, tendering for the Legal Register Centre’s customer information system, and tendering for the Finnish Transport Agency in the maintenance of traffic routes. In 2014, Hansel was involved in 86 customer-based tenders, and for these procurements, the procurement value corresponded to €230 million. Some of the procurements are socially significant and, for this reason, are of particular interest to Hansel’s employees.

The Ministry of Finance engaged a comprehensive assessment of state procurement activity performed in 2013, on the basis of which it launched the HANKO project in August 2014 (state procurement activity development project). The active period of the project will end on 29 January 2016. The project is divided into four development areas in which objectives include strengthening and clarifying the steering and organisation of state procurement procedures; increasing the systematic nature and monitoring of procurements; improving contract management, supplier cooperation and guidelines; and developing procurement-related expertise. Hansel’s involvement in this project comprises a major contribution to the work being done.

A representative of Hansel took part in the work of the State Procurement Advisory Board, which consists of representatives from all state administration sectors as well as from the university sector. The duties of the Advisory Board include overseeing the achievement of the savings targets set for government procurement operations, as well as promoting the practical implementation of Group-level targets and objectives and the dissemination of best practices. The Advisory Board has been appointed by the Ministry of Finance.

At the end of 2014, Hansel’s Board of Directors decided to reduce service fee percentages as applicable to several framework agreements. By reducing service fees, Hansel’s average service fee approximates one per cent, which is the company’s long-term objective. This reduction in the service fee percentage will not endanger the financial position of the company.

In December of 2013, Hansel’s Board of Directors decided to set up an internal audit function, which reports directly to the Board. The role of Internal Audit is to support the Board of Directors and the CEO in their supervisory duties prescribed by law and the Board’s rules of procedure, as well as to perform other internal audit and risk management related duties assigned by the CEO and the Board of Directors. This function was initiated in 2014 and was outsourced to the company’s external service provider. In 2014, internal inspections were performed with regard to the ethical guidelines and data security.

At the end of 2014, Hansel was involved in three tendering-related cases handled in the Market Court, and two in the Supreme Administrative Court. In 2014, the company received six Market Court decisions, in which two appeals were rejected, two were left without further action, and one expired. One trial ended in a procurement decision being revoked. The Supreme Administrative Court issued one expiry-related decision in 2014 with Hansel Ltd having revoked its appeal.

Key events after the close of the accounting period

Business operations remained fundamentally the same after the close of the accounting period.