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AGIMO’s $181 million coordinated procurement success story

by Paris Cowan •
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Australian Government Chief Information Officer Ann Steward has outlined $181 million worth of ICT savings set to remain in the Commonwealth’s pocket, thanks to a program of whole-of-government coordinated procurement commenced in 2009.

Speaking to delegates at CeBIT’s eGovernment Forum on 23 May, Steward revealed that the whole-of-government Internet Based Network Connections (IBNC) panel was emerging as a shining star amongst the suite of arrangements.

“The new centrally coordinated procurement arrangement in this area will deliver savings in excess of $50 million,” she said.

Her comments are consistent with the recently released Williams Review into the operational capabilities of the Australian Government Information Management Office (AGIMO), which revealed that early signs suggest the IBNC panel is producing results “significantly better than estimated” at a saving of about 30 per cent on prior rates of expenditure.

The whole-of-government Desktop Hardware panel has also continued to drive down prices to the benefit of the Government, according to Steward, who said that Federal agencies are now paying on average 55 per cent below the Australian average price. This means a significant amount of ground has been gained since August 2011, when Special Minister for State Gary Gray placed the average Government price at 30 per cent below the Australian standard.

“For the whole-of-government panel arrangement in place for hardware and associated services, we are seeing over $16 million in savings for the period 2010-11 through to 2013-14,” said Steward.

She also said that the Microsoft Volume Sourcing arrangement will save $90 million over the five years from 2008-09 to 2012-13 inclusive, and that another $25 million was forecast to be saved through the consolidation of the Government’s secure internet gateways into eight discreet services run by lead agencies.

“It is important to recall that not all of those savings are taken back into consolidated revenue,” she said. “They are actually available to agencies to help them reinvest, particularly into new program capabilities.”

This new investment has also increased as a proportion of all ICT expenditure, up four per cent on 2009-10 figures to 34 per cent, against 66 per cent Business As Usual (BAU) costs. This surpasses the target of a 70:30 split recommended in the 2008 Gershon Review.

In 2007-08, prior to the Review’s release, the split was 77:23.

Steward also revealed that the Government spends about 40 per cent of its total ICT investment on staff, made up of 25 per cent internal staff and 15 per cent contract labour. Another third of this total spend goes towards applications.

The second draft of the Federal Government’s ICT Strategic Vision, released in April this year, indicates that the coordinated procurement regime is unlikely to slow down, recommending that AGIMO expand the number of whole-of-government procurement arrangements currently in place. The draft roadmap for implementation suggests AGIMO, in consultation with agencies, should begin looking into new areas to target for coordinated procurement around about the beginning of the 2013-14 financial year.

An approach to market to establish a Multi-Use List for Data Centre-as-a-Service and other as-a-Service offerings is due in June.

Related Articles:

Second last lead agency approaches market for Secure Internet Gateway Services

Williams Review - Are central procurement agencies an endangered species?

AGIMO thinks beyond the panel when it comes to Data Centre-as-a-Service

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Jurisdiction
  • Federal
Category
  • IT Services
Sector
  • Policy
  • Treasury
Tags
  • Ann Steward
  • Australian Government Information Management Office (AGIMO)
  • CEBIT
  • CIO
  • Draft ICT Strategic Vision
  • IBNC panel
  • Procurement
  • Shared Services
  • Williams Review