The Department of Finance and Deregulation has released a draft statement of requirements for its Data Centre Facilities Panel refresh for industry consultation, prior to approaching the market in the first quarter of 2013-14.
The draft confirms expected changes to the minimum lease requirements under the current arrangement, which was established in March 2011.
Suppliers and buyers will no longer be restricted to 10-year leases of at least 500 square metres or 500 kilowatts under the Data Centre Facilities Services (Panel 2), as the new arrangement is being called.
“We’re getting quite good use of [the] panel, but we’re clearly seeing some pressure in Canberra and in other places as a consequence of greater demand for data centre space, and a change in the way that agencies want to buy data centre space,” said Australian Government Chief Technology Officer John Sheridan at the Technology in Government Summit on 25 July 2013.
“Something has changed since [the original panel approach], principally I think the effect of the cloud,” he said.
“We’re now seeing that the appropriate lease is probably five years or even less, so we’re changing the way that is structured. We are allowing people to buy in smaller quantities than 500 kilowatts.”
Finance is also reconsidering its recent drive to reduce tender response times.
“The minimum required is 25 days however I think it may be more appropriate to issue this for five or six weeks. Is this enough to ensure risk loadings caused by hurried responses are avoided?” Finance’s Mundi Tomlinson asked in the blog post announcing the draft statement of requirements.
The sentiment was echoed by Sheridan on Thursday.
“Sometimes, by insisting on relatively fast turnarounds, we actually increase the risk involved in Government purchases because vendors are pressed for time and have to put in a response, understandably building into that response money for risk to take into account things they might not know,” he said.
“As a consequence, if we extended the period that the tender was in the market, it might be possible for them to reduce the risk and therefore reducing the cost.”
The draft statement reiterates the Government’s target of avoiding “$1 billion in future Data Centre Facility related costs” by 2025, with a number of corresponding efficiency measures including a consolidation of servers and enterprise storage equipment.
The new arrangement will be established for an initial term of five years, with extension options for a further five years.
Finance confirmed earlier this year that existing suppliers will not be required to reapply for the new arrangement, but may do so if they wish to expand their offerings under the changed conditions.
Suppliers currently eligible to provide data centre facilities to the Federal Government are:
- Australian Data Centres;
- Canberra Data Centres;
- Datacom Systems;
- Enterprise Data Corporation;
- Global Switch;
- iseek Facilities;
- Macquarie Telecom;
- Primus Telecommunications; and
- TransACT Capital Communications.
A total of 22 contracts worth over $315 million have been signed through the panel since 2011.
Only TransACT Capital Communications, Canberra Data Centres, Metronode and Global Switch have won contracts so far.
Major contracts include a $223.7 million agreement between the Department of Human Services and Canberra Data Centres expiring in 2021 and a $22.1 million contract between the Bureau of Meteorology and Metronode expiring in 2022.
The existing minimum lease requirements have meant that smaller agencies have had to procure data centre facilities space through Finance consortium arrangements with Canberra Data Centres totalling $45.6 million.
The altered scope of the Data Centre Facilities Services (Panel 2) arrangement is likely to open up the market for both smaller agencies and vendors, and see increased procurement activity through the panel.
The consultation ends on 8 August 2013.