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Analyst View - Budget ICT projects with ‘Not for Publication’ funding need quick action by prospective suppliers

by Judy Hurditch •
Free resource

Increasingly a feature of Federal government budgets, funding for several ICT initiatives was listed as “not for publication” (NFP) in the 2021-22 Budget brought down on Tuesday 11 May. 

Experienced suppliers will know that the most common reason for this is that the funded agency will be imminently ‘approaching the market’ now that it has received the final verification that funding was made available.  The amount of funding is not published because the government view is that publishing the amount would eliminate a competitive cost element from the bid.

The likely highest value NFP project is the continued roll-out of the GovERP shared corporate services system. But just what aspects of the project are to receive funding, or which agencies will receive the funding may have to await Intermedium’s more detailed analysis of the budget papers and the loading of this data into its Budget IT dashboard.

The ongoing GovERP project is the responsibility of the Department of Finance’s Service Delivery Office (SDO), with six agencies tasked with developing functionality as part of a ‘hub and spoke’ model.  

Services Australia will also be heavily involved in this initiative, according to the Budget papers, to “build and deliver”, with the SDO to support “the first implementation” across 14 client agencies. The most self-evident reason for this engagement is the fact that like GovERP, the decade long, multi-tranche Welfare Payment Infrastructure Transformation (WPIT) is built on a SAP Hana 4 platform and Service Australia now has considerable depth of experience that it can bring to bear on this project.    

Another perhaps less obvious reason is that Service Australia’s role for the GovERP platform is occurring 11 years on from 2010’s Service Delivery Reform Program, which framed the argument for what is in effect the now the largest in-house ICT shared service in Canberra.  Given it is doing this work for Finance, Service Australia is showing how far it has come in achieving those Reform Program objectives by being available for work well outside its portfolio remit.  It also shows the degree to which Canberra’s previously impenetrable agency silos are starting to break down. 

As a result of the Reform Program and following the Machinery of Government (MoG) changes that have occurred since, Services Australia provides significant ICT services for a range of agencies.  These include the Department of Veteran’s Affairs, the now Department of Education, Skills and Employment and the Department of Social Services.  The common thread is that these agencies are involved in the delivery of welfare or services or payments to beneficiaries that utilise Services Australia’s processing systems. 

The MoG that significantly boosted the responsibilities of Services Australia’s predecessor, the Department of Human Services (DHS) brought Centrelink, Medicare and the Child Support Agency (CSA) into DHS.  Consequently, as part of the 2010 Reform Program, Medicare’s infrastructure management arrangement with IBM and the CSA’s arrangement with the then Hewlett Packard Enterprise Services both came to an end.

The Reform Program not only made the then Centrelink’s ICT shop under then CIO John Wadeson the clear victor against the other agencies that were ‘mogged’ into DHS, but saw it continue to stave off any possibility of outsourcing its infrastructure management. Wadeson clearly made a strong argument that he could create an ICT shared service across the DHS super department. 

The first time the agency won the battle to avoid outsourcing was in 1998 - 2000 when most other agencies (including Medicare and the Child Support Agency) were required to go into such arrangements as part of the incoming Howard government administration’s determination to outsource government services.

Services Australia continues to manage its own and other agencies’ ICT infrastructure needs, in effect making it one of the largest ‘suppliers’ of such services in Canberra.

Unlike the other ‘Tier 1’ agencies in Canberra (such as the Australian Taxation Office and the Department of Defence) and following on from the precedent set by Centrelink and DHS, Services Australia has largely eschewed the idea of bringing in any large systems integration firms to build its applications, preferring to use contingent labour hire to supplement its resources. 

The exception to this has been WPIT, where it has engaged a range of suppliers for components of the project. With WPIT entering its last major phase, Tranche 4, the role the budget papers suggest Services Australian has for GovERP implies two things beyond being used for its ERP expertise.

That firstly, to keep its sizeable internal development shop intact, it is securing work systems integration work further afield from its traditional turf. There will be payments from Finance to cover the cost of doing this work, and such payment will go some way to helping ensure the Technology Services division does not need to shed any staff, given the reduced Opex funding that the agency received in the 2021-22 Budget.  By thus avoiding a possible need to shed ICT staff, it is also likely to be seen to be supporting the direction of the government’s stated objectives of skilling and retaining ICT and digital talent in house. 

Secondly, Services Australia is unlikely to have all the resources or engineering skills on staff that it needs for this project. Services Australia variously engaged Accenture, Infosys and IBM across the WPIT tranches, so there is a possibility that some work could again be contracted to systems integrators. However, it is just as likely, given that Services Australia still uses enormous numbers of contractors, that the Budget sourced GovERP funding may also go to paying for contingent labour hire. 

Another NFP in the budget papers is a project to ‘modernise and integrate Basin river modelling’ following the massive fish kills of 2019.  The highly graphic and deeply disturbing environmental disaster was such that Intermedium flagged that there would be funding to ensure that such catastrophes did not occur again.  We said in our February 2019 article ‘whether it is reformed, split in two or absorbed by the Department of Agriculture, the Murray-Darling Basin Authority (MDBA) is likely to be a magnet for government action to salvage the $13 billion Murray-Darling Basin Scheme, creating opportunities for innovative technological responses’.

The Budget states there will be “funding to modernise and integrate Basin river modelling to provide more timely and accurate information about water availability”.

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