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Federal Agencies hang onto panels, despite rationalisations elsewhere

by Staff Writers •
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According to Intermedium data, there are 263 current ICT panels in place across Federal Government agencies, spanning the procurement of IT Services, Hardware, Software and Telecommunications,  at a time when there is heightened scrutiny and challenge to the role of fixed term panels. 68 of these have contract expiry dates that fall before 30 September 2014, according to Intermedium research.

Abul Rizvi, Deputy Secretary of the Department of Communications, indicated that “the government is concerned with the level of red tape around ICT procurement, and certainly wants to streamline it”, in response to a question at the AIIA / Intermedium briefing in Canberra on 12 June.

Rizvi noted that recommendations concerning the use of panels were likely to arise from the ICT Audit, currently being conducted by the Department of Finance; the outcome of the report by the Senate Finance and Public Administration References Committee Inquiry Into Commonwealth Procurement Procedures (the Senate Inquiry) due to be published later this year; and also an online survey of ICT companies that the Department of Finance is currently conducting.

Intermedium sought information about panel renewal intentions from a number of agencies, and found that for most of those that responded, their panels would either have permissible contract extensions invoked, or would have an approach to the market to renew the panel.

Coalition governments, NSW and Victoria in particular, have eschewed fixed term panels in favour of continuously open, multi-use lists for the procurement of IT Services.  In these jurisdictions, it has now been policy for some time that procurement occur via the large omnibus ‘registers’ or ‘lists’.  These are characterised by large numbers of suppliers.  NSW, for example, has rationalised its almost 50 ICT State Contracts of the mid 2000’s down to the ICT Services Scheme and five other panels.

The continuously-open multi-use list approach is also favoured by the AIIA, which made a submission to the Senate Inquiry.

The AIIA argued that “procurement processes can create a significant compliance burden for business and in some instances, hamper competitive dynamics through overly restrictive tender frameworks.” The AIIA suggested “a one stop pre-qualification or certification process… [operating] across jurisdictions…”.   

It also suggested looking at the use of Concept Viability processes, where “public sector customers can have a two way dialogue with the ICT market.”  

The closest the Federal Government has yet come to panel rationalisation has been with the success of its Portfolio Panels for IT Services Policy.

The 2008 Gershon Review recommended that Government optimise its ICT panel arrangements. The then Department of Finance and Deregulation announced in November 2011 its policy to reduce the number of panels by 50% by December 2014, by capping the number of such panels within each portfolio at three.

In addition, each of the IT Services panels is required to have a multi-agency-access clause. According to the Australian Government Information Management Office (AGIMO) Circular, this policy aims to reduce “the burden and cost of establishing and administering such a large number of panels”.

At the 22 May Canberra Manager’s Forum, John Sheridan, Australian Government Chief Technology Officer (AGCTO) and Procurement Coordinator, told attendees that the aim had been to arrive at 58 such panels by December 2014, but that as of one year ago, the number had already been rationalised to 40.  

Sheridan provided information to the Finance and Public Administration References Committee in April 2014, where he provided counter arguments to the AIIA submission and noted that he meets “regularly with vendors, three to four times a week, to discuss general procurement issues as well as ICT-specific issues… [and that] vendors rarely use such opportunities to raise concerns about the procurement process.”

Sheridan also provided a statistical analysis of panel data at the May Forum to support his argument that the use of panels was not an impediment to vendors securing business from agencies.

AGENCY RESPONSES

Of the agencies which responded to Intermedium’s queries as to whether they would be not renewing; renewing; or extending their expiring panel, the following results were obtained.

Not renewing

The Department of Finance and the ACCC are each not renewing a panel.

Finance’s ‘Provision of Hosting Services Panel’ (SON1805481) is due to expire on 20 September 2014 and has three one-year extensions available. A spokesperson from Finance told Intermedium that the Department is yet to decide to exercise any or all extensions, but they were able to confirm that the panel will not be renewed. This panel has one supplier, Hewlett-Packard.

The ACCC’s ‘Drupal Development and Support Services Panel’ (SON1867721) is due to expire on 30 November 2014. A spokesperson told Intermedium that “in line with the Commonwealth Portfolio panels for IT services Policy, the Drupal panel will not be extended past its current used by date”. This panel has five suppliers.  

Renewing

The Department of Human Services released a request for tender on 19 December 2013, for a new ‘ICT Services Panel’ to replace the DHS led ICT services Panel (SON325631) expiring 31 August 2014. This is a significant panel in the Federal Government arena, according to Intermedium’s data. It has 49 suppliers and has been responsible for $81,250,000 in total contract value (TCV) over its four year life.

DHS is currently evaluating responses to this tender, according to a spokesperson. The extensive multi-agency access panel included IBM, Fujitsu, Accenture, Hewlett-Packard and Ernst & Young.

35 Federal government agencies are able to use this panel under multi-agency access provisions.

Extending

The Australian National Audit Office’s (ANAO) panel for the ‘Provision of Information and Communication Technology Support and Associated Services’ (SON319715) was to reach contract expiry on 30 June 2014. This panel’s one supplier Unisys Australia has been awarded $18,018,000 in TCV over its life.   

An ANAO spokesperson told Intermedium that the Office took the early extension option to renegotiate a new contract with Unisys in December 2013 for 3 more years, effective from 1 January 2014. ANAO confirmed that they will be market testing the ICT services in 2017.

The Department of the Environment intends to exercise at least one of the two extension options available for its ‘Senior Software Engineer Services for the Support and Maintenance of Clarity GMS’ panel (SON1028301), expiring on 30 June 2014. The Department may also decide to exercise the second extension. Environment did not exclude an approach to market following the expiration of the panel arrangement.

The Australian Taxation Office’s (ATO) ‘IT Application Services Panel’ (SON420734) is due to expire on 27 July 2014, but was extended for another 12 months, commencing 1 July 2014.

When contacted regarding any further extension or replacement of the panel, the ATO stated it was not in a position to provide advice as to future action. This panel has five suppliers and has been responsible for $144.3 million in TCV over its three year life. Accenture has been the most successful supplier off this panel, with $92.8 million in TCV.

No decision - under review

The Department of Defence’s ‘Computer Equipment and Accessories Panel’ (SON379715) is due to expire on 30 June 2014, with no extensions available.

A spokesperson for Defence confirmed that an approach to market is under consideration. While it is unlikely that there will be any significant new requirements, terms and conditions will be updated to reflect Commonwealth legislation and policy, the spokesperson advised. This panel has seven suppliers, Boeing Defence Australia, CDM, Codarra Advanced Systems, Frame Group, Fujitsu Australia, Thales Australia and UXC.   

The Department of Human Services (DHS) ‘IT Infrastructure Library (ITIL) Qualification Scheme Panel of Training Providers’ (SON315086) is expiring on 30 June 2014. DHS told Intermedium that the Department is extending the ITIL panel for a further 12 month period, using the second extension option of the current arrangement. During this 12 month period, DHS will approach the market to renew this panel and any new requirements will be advised in the Request for Tender. This panel has four suppliers, ALC Education & Consulting, Solisma, The Art of Service and The ITSM Hub.

Prime Minister and Cabinet’s (PM&C) multi-agency access ‘Provision of IT Security Services’ panel (SON129796) and ‘Provision of Web and Application Development and Management Services’ panel (SON335203) are both due to expire in September 2014.

The ‘Provision of IT Security Services’ panel has twelve suppliers including Verizon, Logica (now CGI) and Oakton.  

The ‘Provision of Web and Application Development and Management Services’ panel has 26 suppliers including Serco, SMS Management and Technology and Thales.

PM&C has indicated that these panels are currently being reviewed “in line with current and future requirements with a view to determining whether to extend, cease, conduct a new approach to market or source services elsewhere”. Should it determine that an approach to market is warranted, this will be listed in PM&C’s Annual Procurement Plan published on AusTender by 1 July.

A full list of expiring panels can be found using Intermedium’s Scout IT.

 

Related Articles:

Finance reports $2 billion in ICT savings, deems panels a success

Agency panels to watch in the Federal IT Services market

End of an era for whole-of-government IT Services Panels?

 

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