Government departments and quangoes were being charged vastly different prices for the same products by the same supplier.
The Coalition has started to save tens of millions of euros by buying products centrally and getting discounts through a plan started by junior finance minister Brian Hayes.
The first round of talks with companies has saved over €40m, but this only focused on the biggest suppliers of goods and services.
Further savings are expected to flow when smaller suppliers are chased, as the State spends €9bn a year on goods and services.
Mr Hayes has been working on getting better value by adding up everything being spent by different government departments and quangoes and talking directly to suppliers in an effort to negotiate better prices.
The minister told the companies that the Government would be using its collective purchasing power in the future to get a better price – just as the private sector does.
"Different public bodies were buying the same goods and services at a different rate," a Government source said.
"The suppliers now know that we know how much the State is paying them in total on an annual basis."
The €40m in savings in a wide range of areas comes from discounts, better tender prices and pro bono work and includes suppliers, legal and financial consulting, information technology, waste, facilities, catering, telecoms and HR.