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$400m Federal Government desktop tender set to limit vendors

by Staff Writers •
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The Federal Government has issued a three-year whole-of-government tender that is expected to be worth approximately $400 million, with Federal Government spending on such hardware currently at about $100 million per year, according to tender documents.

Intermedium is about to release its first Federal Government Desktop and Laptop Expenditure Report.  This report shows that there is substantial truth to the assertion that there is ‘pent up’ demand in Federal Government agencies for both desktops and laptops, with most existing contracts in both categories expiring in 2010-11.  It also shows that Finance’s estimate of $100m per annum for desktop and laptop purchases is in the right ballpark.

This report contains data covering the period 2004 to 2014 and shows the desktop and laptop revenues flowing to suppliers from their single or multi-year contracts with agencies, as well as the level of agency pre-commitment from their existing contracts into the out years to 2014.

Released 2 February 2010 by the Department of Finance and Deregulation, the Request for Tender (RFT) invites vendors to join a panel with Federal agencies to buy desktops, laptops, associated accessories and services such as installation and disposal.  The RFT closes on 4 March 2010 and outlines a timeframe of delivery of 3 years, with 2 extension options of 1 year each.

According to the Federal Government, the single panel nature of the tender will eliminate the need for Federal agencies to issue their own tenders.  The move to a single panel is aimed at capitalising on the Federal Government’s scale and buying power, centralising the procurement process while focusing on cutting costs. 

“This procurement activity is part of the government's Coordinated Procurement Contracting initiative to establish whole-of-government arrangements for goods and services in common use to maximise market benefits and deliver efficiencies and savings. When established, agencies will be required to make purchases through these arrangements,” outlined the tender.

With respect to machinery of government changes, the tender will also see the establishment of a strategic management committee with vendors and Government agencies, directed at centralising and improving the management of the contract.

The Federal Government intends to have agreements signed with vendors by April/May of this year.  Minister for Finance and Deregulation, Lindsay Tanner, had previously stated that arrangements for desktop computing equipment were to be in place by the end of the 2009-10 financial year.  A further panel for telecommunications management services and devices such as mobile phone handsets has also been planned to go live during the 2010-11 year.

While the Federal Government maintains the single panel procurement approach will optimise government savings, improve efficiencies and foster a more competitive and viable industry, the implications for vendors point toward more limitations being placed upon their commercial interactions with Federal agencies, namely: 

  • The tenderer is restricted to requesting only one proposed unit per product category.
  • The three-year timeframe of the contract as well as the possibility of extensions will ensure that those companies that do not achieve a place on the panel will be left out for an extended period.
  • The stipulated minimum requirements for hardware specifications like processor speed and memory are higher than previous tenders. 
  • The establishment of a strategic management committee with vendors and Government agencies has reserved the right to have best and final offers and e-auctions on pricing, resulting in price playing a significant role in the procurement process. This means that there will be reduced options for niche players to come in with particular differences because the price imperative will be so strong.

An industry briefing is being held by the Department of Finance and Deregulation on February 11.  Those thinking of attending must log their interest online at the AusTender website at least 48 hours before the event.

The complete tender can be accessed here.

For more information on Intermedium’s Federal Government Desktop and Laptop Expenditure Report, please contact sales on (02) 9955 9896.

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