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NSW community services outsourcing needs IT systems support, says Committee

by Pallavi Singhal •
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A new information database, centralised processing system and gateway for managing applications from potential service providers should be developed by the NSW Government to manage increased levels of community services outsourcing, according to recent recommendations by the Committee on Community Services.

An interim report on outsourcing community service delivery found that the NSW Department of Family and Community Services (FACS) is directing around 45 per cent of its total budget to the private sector. FACS spent $2.3 billion on private sector contracts in 2011-12, compared to $800 million in 2000-01.

The report found significant inefficiencies in the current community services outsourcing process, including duplications in the application process, lack of coordination within and between agencies in managing outsourced projects, and geographical disparities in service delivery.

The development of a standardised application system is needed to reduce complexities in the bidding process and create an even playing field for smaller providers, according to the Committee’s recommendations.

As well as managing the application process, the proposed system would be underscored by a centralised Gateway to link projects and appropriate suppliers.

Recommendations that a ‘Gateway’ agency responsible for managing the accreditation process would assign a ‘competency category’ to suppliers according to their size, scope of operations, service delivery history, client base and technological readiness to work with the Government, have similarities to the ICT procurement reforms either in place or being implemented by the O’Farrell government, particularly the IT Services panel.

The agency would then forward service delivery tenders to suppliers in the relevant category, who would only need to address specific application criteria rather than repeatedly undergoing the entire application process.

The proposed system will increase “flexibility, reduce repetitive application processes and result in improved efficiencies and better targeting of services”, says the report.

Alongside the Gateway, the report also recommends the development of a separate “centralised and open access database” for Government agencies and suppliers, with information on projects, applications, funding and vendor capability.

Although the report only covers service delivery outsourcing in the areas of housing, disability and home care, it raises the potential for an expansion of the database to a whole-of-government level.

“The Committee agrees that any such mechanism should include all Government agencies contracting out services to the non-Government sector,” says the report.

“This will also require all participants, that is Government funding agencies and non-Government service providers, to have access to comparable computer hardware and software management systems to enable information to be collected and shared on the same platform.”

The proposed database could also encourage collaboration on the supplier level, with service providers able to access information about the existing level of services and similar ongoing or past projects.

In addition, the report flags changes to the way the Government interacts with suppliers over the course of a project.

“The Committee also recommends that organisations operating in the same service delivery area be consulted at the early stage of determining the scope and targeting of specific applications to ensure optimal service delivery for clients.”

The tabling of the interim report indicates a likely push for a quick turnover on report recommendations.

“Due to the speed with which human services outsourcing is evolving, the Committee considered that it would report on essential elements of the process ahead of its final report in order to guide future policy in a timely fashion,” according to Committee Chair Kevin Anderson.

The final report on outsourcing community service delivery is expected in late 2013. It will elaborate further on recommended approaches and provide a framework for the future direction of outsourcing.

View FACS profile in GovFacts >>>


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