According to published reports on procurement intentions for the 2008-09 financial year, it appears Federal Government agencies plan to reduce ICT purchases compared with last financial year.
The natural administrative ‘pause’ associated with a change of government, coupled with the many review and inquiries underway, means we might have expected a more pronounced dip in ICT procurement plans.
However, while a drop in the overall number of ICT procurements is evident, the latest plans contain a large number of major ICT initiatives, reflecting the on-going demand to support ‘business as usual’ government service delivery.
As well as the effect of the change of government, a number of changes will arise from the Gershon and Mortimer (Defence Procurement) Reviews and the implementation of ‘coordinated procurement contracting’ by the Department of Finance and Deregulation. In this environment, it is vital that suppliers clearly understand the procurement intentions of their clients and prospects.
120 Federal Government agencies published procurement plans for the 2008-09 financial year in July, and the overall volume of ICT projects (398) listed is down slightly on last year.
Despite the slightly slower start indicated by the initial plans, they are ‘living’ documents and we expect to see over 500 planned ICT procurements listed this year, in keeping with the volume we saw last year.
In the 2008-09 plans, the largest category of planned ICT procurements is IT Services, accounting for one third of the ICT items listed. Systems integration projects represent a significant area of this prospective business. Hardware continues to fall with 90 planned procurements, down more than 10% on 2007-08 plans.
Again, some of the largest agencies have been the least forthcoming in terms of their ICT procurement intentions. The six Tier 1 agencies (which spend $100m or more annually on ICT) collectively account for around 70% of the Federal Government ICT, but have listed only 62 ICT items, or around 15% of all the ICT procurement plan items.
The Department of Immigration and Citizenship (DIAC), one of the large buying agencies, lists only 2 ICT items in its 2008-09 procurement plan. In 2006-07, DIAC’s total ICT contract expenditure was over $577 million.
While this doesn’t help the industry hungry for market information, it must be acknowledged that large complex agencies take some time to finalise procurement plans after they receive their budget allocations. We expect more information to be forthcoming from these agencies during the year, but in some cases we must rely on other sources of information, such as expiring contracts, to predict what will happen in these large agencies.
A difficulty with this progressive updating of plans is the volume of changes throughout the year - new opportunities, timing changes, deletions and the maturation of planned procurements into tender processes and the awarding of contracts. This puts pressure on suppliers to continually monitor the difficult-to-access plans to ensure they are aware of all relevant information is identified when an agency update is published.
To meet the need for faster and easier access to ICT procurement plans, Intermedium has developed a comprehensive guide and update service to the planned procurements – scout IT. The July issue of scout IT, an analysis of the 2008-09 procurement plans, is available now.