The Department of Human Services (DHS) has confirmed it intends to renew what was formerly Centrelink’s ICT Contractor Panel, which saw almost $330 million in new contracts signed in 2010-11.
The significance of this panel in the labour hire market cannot be understated. Intermedium’sresearch suggests that labour hire component of the IT services market was worth approximately $871 million 2010-11, with the DHS panel therefore accounting for 37 per cent of the total value of procurement in this area.
In 2009-10, the total value of panel contracts was $261.3 million.
Since the beginning of 2011-12 $185 million worth of contracts have already been signed under the standing offer arrangement.
The current panel is due to expire on 31 October 2011 and the department has confirmed that it will deploy its second and final option to extend the head agreement by 12 months to October 2012.
DHS intends to give itself enough time to approach the market for the renewal process that must be completed by this time next year.
“The ICT External Business Services Branch will be approaching the market to renew this panel during this financial year,” said a spokesperson.
The DHS’s Annual Procurement Plans suggest that this approach to market will take place in quarter three (January to March) of 2011-12.
Centrelink initially approached the market to form the panel in April 2007, with the standing offer agreement becoming active the following November.
A total of 35 Federal Government agencies are able to use the panel, which has 82 suppliers.
The 35 agencies include the Department of Defence, the Department of Immigration and Citizenship and the Australian Customs and Border Protection Service at the Tier 1 level (procuring over $100 million in ICT per annum). Noticeably absent from the list is the Australian Taxation Office, which has tended to issue individual requests for tender to meet its labour hire personnel needs.
At the Tier 2 agency level (procuring $20-$100 million per annum), most departments have access to the panel. The exceptions are:
- Australian Securities and Investments Commission;
- Bureau of Meteorology;
- Department of Health and Ageing;
- Department of Prime Minister and Cabinet;
- Department of Families, Housing, Community Services and Indigenous Affairs;
- Geoscience Australia; and
- Department of Infrastructure and Transport.
Intermediumhas identified a total of 21 panel arrangements currently in place across the Federal Government through which ICT labour hire be procured.
The Whole-of-Government IT Services Panel (WISP), an announcement on which is due soon, is not expected to cover IT Labour Hire.
The extent of the multi-agency use of DHS’ ICT contractor panel could be one of the reasons the Department of Finance and Deregulation decided there was no pressing need to establish a Whole of Government ICT Labour Hire panel.