Australian government IT panel value under the microscope

Australian government IT panel value under the microscope

Summary: The Australian government is reviewing the value of its IT panels to the panel members, amid complaints about the cost of becoming and remaining a member.

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The Australian government will analyse the value of government IT panels for panel members, amid some concern from industry that the number of panels means the cost of joining outweighs the benefits of the panels.

In a blog post today, Australian government chief technology officer John Sheridan said he is going to analyse the 156 IT panels used by the Australian government to determine the value of panels for the participants.

According to the data from Sheridan, he said that of 156 panels, there are 1,360 suppliers engaged, with 12,100 contracts awarded for a total of AU$5.7 billion.

There has been some concern from the industry that those that have invested in joining the panels and submitting responses to tenders are not being awarded contracts as part of the panels, and, ultimately, the investments made in joining the panels are not being recouped.

ZDNet has heard from suppliers that due to the quantity of panels, and the length of time for which the panels run, some are in a constant state of reapplying for panels at a high cost to those companies.

Australian Information Industry Association (AIIA) CEO Suzanne Campbell told ZDNet today that the cost of joining the panels is a concern for the IT companies that are members of the industry group.

"It's immensely expensive. The situation is, across the country, we have very many panels. Panels need to be refreshed on a regular basis, and as panels are refreshed, that incurs an additional cost," Campbell said.

Panels that aren't updated as regularly mean that some companies are unable to offer some newer services to the government.

"The lead time between refreshing means in some aspects of ICT, the innovation is happening more quickly than the panels are being refreshed. The government is being stuck behind, but in any event, the industry is stuck with the very high cost of participating in this process."

Campbell said that the cost also doesn't guarantee any contract wins for the companies involved.

"Simply being on a panel and keeping data up to date doesn't mean you're going to get any business. So it can be a very, very significant cost without any reward at all."

The parliament conducted an inquiry into procurement procedures earlier this year, and last month released a report recommending that the government simplify tender processes, and revise best practice examples for tendering in other jurisdictions.

The then-opposition Coalition released a policy proposal prior to the September 2013 election that would replace the procurement panels across government with a centralised register of service providers to be administered by the Department of Finance.

The Commonwealth government is currently in the process of developing a cloud provider panel to be finalised by the end of the year, and is looking at offering a flexible arrangement for panel members to offer cloud services that cater to the needs of different government agencies.

ZDNet revealed earlier this month that the Department of Finance is also consulting industry on plans to drop a requirement established by the former Labor government for agencies to get the approval of both the portfolio minister and the attorney-general before it moves secure government data into an offshore cloud service.

The response to the proposal has been mixed within the industry, with some local cloud providers concerned about the security of citizen data. Campbell said that the AIIA is in favour of the proposal.

"We think that if you've got a business case being developed inside a department or agency that has been approved through the duly authorised, appropriately delegated process within that organisation, and it has ministerial sign-off, we just want to know why it needs attorney-general sign-off as well. It seems like unnecessary duplication, cost, and introducing an additional layer of complexity," she said.

Topics: Government, Cloud, Government AU, Australia

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • More evidence

    Hi Josh

    Thanks for the article. The figure of 1360 suppliers mentioned in the post is the sum of suppliers on all the panels. There are only about 650 unique suppliers on those panels. 63% are only on one panel. 18% are on two, 8% on three, 4% on four and 2% on five. That's 95% on five panels or less.

    Of course, I don't have figures for companies that are unsuccessful in getting accepted for a panel. Certainly, on the panels for which I am responsible, we see a high proportion of applicants being selected. This evidence, if the extrapolation is reliable, suggests that if panels last three years (and most do), then the vast majority of these companies aren't involved in a panel RFT response or refresh more than once every two years.

    Further, 57% of the chosen suppliers get contracts and the median value is $103,000. This seems to me to be a reasonable balance between opportunities for suppliers and simplifying procurement for agencies. We'd welcome your readers' views on our post.

    Regards

    John Sheridan
    john.sheridan