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NSW Government hangs up the phone on telecommunications panels

by Paris Cowan •
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The NSW Government will not renew two of its whole-of-government panels, Government Telecommunications Agreement (GTA) categories 3 and 4, which expired in March this year.

Instead, the services previously covered by the GTAs will be available under GTA Category 1a (for Data & High Speed Internet Services) and GTA Category 5 (for Telecommunication Equipment and Services including handsets, videoconferencing, paging and broadcast equipment), with the exception of satellite services.

GTA Category 5 has been extended through to 31 March 2013, with one 12 month extension option remaining subsequent to this date. GTA Category 1a is set to expire in December 2012, and will have no further extension options available beyond this date.

A statement from the Department of Finance and Services (DFS) has hinted that a brand new telecommunications procurement arrangement may be just around the corner.

“At this stage, an additional intake under category 5 is not anticipated. However, there will be future opportunities for suppliers to be involved in any new Government telecommunications contracts,” said a spokesman.

For half of the Category 3 and 4 panellists, the contract dissolution will mean they simply transition services to one of the remaining GTAs, to which they already hold membership. These four include:

  1. Optus (1a & 5)
  2. Telstra (1a & 5)
  3. Message Stick (5)
  4. Soul TPG (1a)

The remaining four suppliers – Macquarie Telecom; Vodafone; AAPT; and Pivotel – will at least temporarily lose their access to new business within the NSW Government telecommunications market. Pivotel also has an ongoing satellite arrangement with Fire and Rescue NSW and any existing agency contracts will continue through to their expiry.

According to the 2010-11 DFS Annual Report, the combined value of procurement through the GTAs was $345.7 million in the financial year, or the vast majority of the roughly $400 million the NSW Government spends on telecommunications annually based on 2009-10 benchmarking data.

The GTA suite formed a key element of the NSW Labor Government’s People First ICT Strategy which aimed to generate $565 million in savings.

According to a NSW Procurement fact sheet, agencies would be able to achieve savings of at least 30 per cent on services bought through GTA Categories 3 and 4, with even greater savings available if an agency was willing to commit to a fixed term and volume purchase. The NSW Buy website places the combined savings generated through the GTA suite at $50 million annually.

In consolidating its telecommunications panels, the NSW Government is moving in the opposite direction to Commonwealth, which has established a set of three whole-of-government telecommunications panels with the aim of improving procurement visibility via the unbundling of managed services agreements. These panels cover data carriage, telecommunications management and mobile carriage and devices.

While the mandatory panels are in place Federal agencies will have to procure any services falling into these categories via an approach to market wholly separate from the remainder of their telecommunications outsourcing procurement.

The rate of ICT outsourcing in the NSW Government, however, tends to be far lower than that of Federal agencies, reducing the need for any ‘unbundling’ strategies.

The GTA 3 and 4 lapse is the second major change to NSW ICT procurement to be announced in just over a week. On Wednesday (21 June) Finance and Services Minister Greg Pearce revealed in Parliament that he planned to transform State Contract 2020 for IT Services, by removing the complex tender process required to gain membership.

A broad strategy for NSW Government procurement reform is currently under development.

Related Articles:

Revised procurement model to replace NSW 2020 panel for IT Services

NSW ICT panels worth more than $670 million in 2010-11

Nineteen members cut from NSW telco panel

DIAC renegotiates telco outsourcing deal for $94 million

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  • NSW
  • Telecommunications
  • Treasury
  • AAPT
  • DFS
  • Greg Pearce
  • GTA 1A
  • GTA 3
  • GTA 4
  • GTA 5
  • macquarie telecom
  • Message Stick
  • NSW People First
  • NSW Procurement
  • NSW procurement reform
  • NSW State Contract
  • Optus
  • pivotel
  • Soul Pattinson Telecommunications
  • Telstra
  • Vodafone-Hutchison
  • whole-of-government panel