Hansel – a central purchasing body for the public administration

Hansel is a non-profit limited liability company, the purpose of which is to generate savings for public administration through efficient procurement operations. Hansel’s customers include ministries and their subordinate departments, municipalities, joint municipal authorities, hospital districts, Keva, parishes and all public law bodies governed by the state or a municipality.

Hansel’s owners are the State of Finland and the Association of Finnish Local and Regional Authorities. The company’s role and duties as a central purchasing body are specified in the Act on Public Contracts, the Act on a Limited Liability Company Called Hansel Oy and the State Procurement Strategy. The company operates under the ownership steering of the Ministry of Finance.

Hansel’s operations are funded by service fees for joint procurement and the sales of expert services. The service fees are based on purchases made by the customers. The maximum fee is 1.50% of the contract value. The average service fee in 2019 was 0.96% (0.99% in 2018).

In 2019, Hansel’s own acquisitions totalled €4.5 million. Hansel makes use of joint procurement in our procurement activities whenever possible. If a suitable framework agreement or dynamic purchasing system is not available, Hansel performs the procurement in accordance with processes determined by the company.

Tax footprint

Organisation

Hansel’s organisation consists of its personnel of 116 experts. The Board of Directors is named by the annual general meeting and chaired by Timo Laitinen, Director General of the State Treasury. There are five Board members. A personnel representative also attends the Board meetings. The representative has the right to attend the meetings and speak at the meetings. Members of the Board cannot be members of the company’s operative management.

Hansel’s Executive Committee is nominated by the Board based on a proposal by the Managing Director. In 2019, the Executive Committee consisted of six people (seven as of September), including Anssi Pihkala, Managing Director (b. 1963), Susanna Närvänen, Chief Category Officer (b. 1963), Eija Kontuniemi, Head of Legal Affairs (b. 1966), Kirsi Koivusaari, Director of Finance (b. 1966), Petri Kalavainen, Account Manager (b. 1962) and Mikko Saavalainen, Director of Digital Business (b. 1979). After the organisational change on 19 September 2019, the Executive Committee consisted of Anssi Pihkala, Susanna Närvänen, Eija Kontuniemi, Kirsi Koivusaari and Mikko Saavalainen, as well as Raili Hilakari, Deputy Managing Director (b. 1953) and Maritta Mäkelä, Account Director (b. 1965).

The members of the Board and the Executive Committee are appointed in accordance with the Government’s ownership steering principles, which are used to ensure equality, among other things. Decisions are made in compliance with the Finnish Limited Liability Companies Act and Hansel’s articles of association. The company’s head office is in the main post office building in Helsinki. As of September, the company also has offices in Kuntatalo. Hansel has no international operations.

Business operations

Hansel’s business operations are divided into three segments: joint procurement, tendering services and procurement development services. Through responsibly run operations, the joint procurement unit promotes profitable public administration, high-quality public procurement and equal, non-discriminatory treatment of suppliers. Hansel’s objective is to organise tendering processes in a manner that fosters efficient market operations and promotes competition.

Risks related to the company’s operations are regularly surveyed with an external expert, using a risk matrix. The last risk survey was performed in May 2019. A total of 35 risks were identified. Four of them were deemed significant: changes in the competitive situation, changed legal practice in relation to advance commitments and reporting of the scope of procurement, personnel availability issues and risks pertaining to the merger.

Joint procurement

Joint procurement refers to framework agreements and dynamic purchasing systems through which Hansel’s customers can purchase products and services. The purpose of joint procurement agreements is to establish the general terms governing procurement contracts, such as the object of procurement, prices, and responsibilities and obligations of the contracting parties. By using Hansel’s agreements, customers can ensure that their procurement processes are compliant with applicable laws and the contractual terms secure their position, as well as facilitate the management of agreements and suppliers. During joint procurement, Hansel verifies the eligibility of suppliers. In addition, Hansel monitors that the suppliers meet their contractual and solvency obligations and social requirements during the agreement period.

Savings are generated when sufficiently large volumes of products and services are put out to tender, and the requirements of the maximum number of customers are met. Joint procurement generates considerable savings for public administration, through both procurement process costs and pricing.

Tendering services

Tendering services are needed when a joint procurement agreement is not available for a product or service to be acquired. Hansel’s tendering consultants and lawyers have specific experience and knowledge of public procurement, tendering and contract law. By using our expert services, customers can ensure that their acquisitions are put out to tender in accordance with the valid rules, with the best contractual terms possible and by considering price, quality and responsibility aspects. This frees the customer’s time for other duties, reduces the contracting authority’s risks and promotes the distribution of best practices.

Procurement development

Our development service aims to boost the effectiveness of our customers’ procurement operations and improve their profitability. Development managers have a key role in customer assignments, but Hansel’s entire expertise is at the customers’ disposal. The development service can involve a specific problem in the customer’s procurement operations, or the service can consist of a comprehensive analysis of procurement control, the procurement organisation or the implementation of procurement processes, change management and personnel training. The content of a development assignment is always customised on a case-by-case basis in accordance with the customer’s wishes, and the assignment is realised in close cooperation with the customer.