The New South Wales Department of Commerce has renewed a key, five-year managed services contract with LogicaCMG, reducing the value of the deal by about AU$5 million.
LogicaCMG will continue to manage the state government's smartbuy TRADE electronic procurement system. The deal was sealed late last year but only revealed this week through the state's contracts reporting system.
Smartbuy is used by government departments when purchasing goods and services from external suppliers.
The previous value of the contract was AU$21.4 million. "This represents a 22 percent saving over the life of the contract compared with the previous cost base," the department said in the documents.
Neither LogicaCMG or the department commented on the deal by press time, however the tender documents reveal the supplier is responsible for hardware, software, application support, hosting, security, network, monitoring and operations and account management services associated with smartbuy.
"A contract was renewed through direct negotiation with the incumbent based on price reduction, past performance, unique knowledge of the system and risk minimisation," the documents said.
Commerce added other non-cost benefits achieved through the new contract included service-level agreements that provided business continuity protection. The new deal is also expected to minimise business and technical change risk, in what the department described as "a period of rapid adoption of electronic procurement".
"The contract term provides continuity of service for a period sufficient to allow Commerce staff to focus on the task of assisting agencies with adoption [of smartbuy] and to investigate, procure, implement and migrate to a new generation solution," said the department in the documents.