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HP pulls out of Victorian whole-of-government panel

by Paris Cowan •
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Hewlett-Packard has taken the unusual step of deciding not to re-sign onto Victoria’s whole-of-government Networking Equipment panel.

A spokesperson for the lead agency managing the panel, the Department of Treasury and Finance (DTF) confirmed that Hewlett-Packard was not a signatory of the panel as of 30 June 2012, because it had declined the Government’s invitation to remain part of the State Purchase Contract upon the commencement of a periodic extension.

It means that just Dimension Data and IBM remain on the panel, which according to Victorian Government estimates is worth just over $10 million per annum, or $54 million over its five year term.

However HP’s decision to leave the Networking Equipment panel, which is not mandatory for Victorian agencies to use, suggests that the panel may not be reaching its estimated value. Much of Victoria’s networking equipment requirements could instead be sourced through alternative channels, thus reducing the value of panel membership.

A recent report commissioned by the Victorian Government found that even the mandatory eServices panel was suffering from a lack of business. As little as half of all IT services contracts in the State Government went through the panel, it revealed, with exemptions being sought for the remainder.

Formed in July 2008, the Networking Equipment panel gives Victorian agencies access to a discounted range of networking hardware including switches and routers.

The panel has recently been extended to 31 December 2012, meaning one six month extension remains before its full term is exhausted. A spokesperson for the DTF, however, raised the possibility of a longer term. “Contract expiry dates can be amended upon mutual agreement between the contractual parties beyond this date, if deemed appropriate and necessary,” she said.

If the Victorian Government did intend to refresh this panel ahead of its 30 June 2013 expiry, an approach to market would have to take place within the next six months. However any panel refreshes are more than likely to be put on hold until the release of Victoria’s first whole-of-government ICT strategy.

Technology Minister Gordon Rich-Phillips recently announced that development of the strategy was underway, and listed ICT procurement as one of the four major issues that it would aim to address, alongside improving service delivery, reducing waste and encouraging innovation.

With 13 of  a total 17 whole-of-government ICT procurement arrangements due to reach their initial expiry, or the expiry of an extension in 2012-13, the next twelve months will provide the Victorian Government the perfect opportunity to overhaul the way that it buys ICT.

It has already moved to change the largest of its 17 State Purchase Contracts, the eServices Panel, from a tender-based panel arrangement with periodic renewals, to a perpetually open eServices Register based on a multi-use list model.

Related Articles:

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

Nine Victorian whole-of-government ICT contracts expiring in 2012

Victoria reviews $461 million telco arrangements

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  • IBM
  • Victorian ICT Strategy
  • Victorian Newtorking Equipment Panel