New SME-favouring IT procurement rules up for discussion

The Australian government is moving to make the way IT contracts are awarded less archaic, seeking feedback on its draft IT procurement framework.
Written by Asha Barbaschow, Contributor

The Digital Transformation Agency (DTA) has published a draft ICT Procurement Framework aimed at bringing the government into the "digital age" by changing the way contracts are awarded.

In attempting to spread the AU$6.5 billion spent annually on IT by the Australian government, the DTA has highlighted six emerging themes, which include a panel makeover, flexibility with contract needs, the formation of a one-stop shop for information and tools, inter-agency collaboration, better education in-house on procurement, and a change in thinking around the importance of a department's procurement staff.

The team responsible for developing the framework was comprised of seven government agencies, which reported that their peers want an IT procurement one-stop shop from the DTA that includes guidance, tools, and reporting.

They found that agencies would like the DTA to create an IT contracting suite for medium value procurements, targeting small to medium-sized enterprises (SMEs), which the DTA said could include adding clauses for contractor poaching and piggybacking, as some examples.

Where panels -- groups of companies pre-selected to provision goods and services to the government -- are concerned, the DTA agreed that it's an archaic process that requires a refresh, in particular needing a reduction in the number.

"We found many government procurement officers see panels as rigid and lacking flexibility," the DTA wrote.

"This can mean new players and emerging technologies are locked out, because traditional panels are not set up to bring on new service categories. There is a sentiment that there are too many panels, there is a wide variance in the way panels are managed, and it can be difficult to find the panel manager for non-mandated panels."

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According to the DTA, as each agency is different, so too are procurement needs, highlighting that flexibility is key as one model doesn't fit all.

"There was strong support for increasing the AU$80,000 procurement threshold, which adds red tape for buyers and is seen as a barrier to entry for sellers," the framework explains. "This threshold forms part of our international trade agreements, making it a complex research finding for us to tackle."

Stating that "people learn from other people and experience", the DTA said its taskforce found there is support for, and value in, inter-agency collaboration and sharing. The DTA has proposed that this could be in the format of a panel manager forum or an IT professional's forum.

It also asked for a cultural shift in the way procurement officers are viewed by all within an agency.

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Under the draft framework, it is recommended that agencies retain responsibility for IT procurement, with the DTA to act as an authority responsible for providing a set of principles, policies, and guidance to agencies on how to perform procurement.

The framework will apply to IT procurement by both Commonwealth corporate entities and non-corporate Commonwealth entities, and will be available for all federal, state, and local governments to use for all categories.

The framework includes two new policies, the Fair Criteria policy and the ICT Consider First policy, and retains two existing policies, the ICT Portfolio Panels policy and the ICT Capped Term and Value policy.

The Fair Criteria policy is aimed at encouraging competition and supporting SME participation, while the objective of the ICT Consider First policy is to make sure all options are considered before procurement starts, the DTA explained.

The DTA last month announced the upcoming launch of a new Hardware Marketplace, slated as a place for government to buy products like monitors, tablets, PCs, servers, and technical services from the smaller vendors, in a space usually reserved for the technology heavyweights.

The Hardware Marketplace will sit alongside the Digital Marketplace, which provides a direct way for startups and smaller tech firms to pitch their ideas to government and is aimed at getting SMEs involved in the public sector's IT spend.

Former Assistant Minister for Cities and Digital Transformation Angus Taylor revealed in November that since August 2016, SMEs have been awarded 75 percent of AU$50 million in technology contracts published on the Digital Marketplace.

However, during a Joint Committee of Public Accounts and Audit hearing in February, it was revealed that consultancy giants EY and PwC were classed as SMEs by the Australian government as a result of multiple subsidiaries or a number of ABNs registered to the parent company.

The definition of an SME is 200 employees or less, the joint committee was told.

Taylor, who considers Australia's approach to cybersecurity "world leading", and who last year called the Australian government a "big bureaucratic beast", believes that in order for the government to make good on its promise to undergo a digital transformation, it needs to change the way it procures products and services.

Submissions to the DTA on the draft framework close on April 24, 2018.


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