The Government could save up a €1 billion annually if it modernised the way it purchased goods and services, according to a new report.
The study by the Information Society Commission (ISC) says the Government currently spends €9 billion annually on goods and services, but claims this could be cut by using alternative procurement methods.
The Commission recommends more public private partnerships, allocating more funds to the national e-Procurement Strategy and enhancing the e-tenders website.
Chairperson of ISC's e-business working group, Ms Clodagh O'Donnell, said progress to date on procurement reform had been disappointing and clearly inhibited by budgetary restraints.
Only €5 million was allocated last year to fund the new strategy, only a third of what was envisaged by ISC, she said.
"The public procurement sector is a strong mechanism to ensure healthy adoption of e-business in our economy. The Government needs to lead in terms of its interaction with businesses in order to promote an overall e-Business environment," she added.