The Australian Government Information Management Office (AGIMO) will soon be considering its options when it comes to the supply of Microsoft licences across the Federal Government.
AGIMO, an office within the Department of Finance and Deregulation, has approached the market to appoint one or more new Large Account Resellers (LAR) to manage the sale of software licences to Federal agencies.
The RFT will give it time to transition to a new LAR if necessary, before the current volume sourcing arrangement (VSA) with Microsoft expires on 30 June 2013, a spokesperson told Intermedium.
AGIMO has already applied one 12 month extension to the three year deal signed with Data #3 in 2008, which will see the supplier continue to be the sole LAR until 15 October 2012. By approaching the market, AGIMO has indicated that it may not exercise any of the remaining options to extend with Data #3.
However AGIMO is not closing any doors at this stage, and has reserved the right to either continue with Data #3 if it doesn’t find any of the new tenders competitive enough, or to appoint preferred tenderers to the panel arrangement to operate alongside the Data #3 arrangement.
Both the Queensland and NSW Governments have elected to appoint more than one LAR to their respective Microsoft Volume Sourcing Arrangements, while Victoria and Western Australia currently parallel the Commonwealth with a single reseller.
Since its establishment, the Microsoft VSA has introduced a new level of transparency to the Federal Government’s Microsoft licence procurement. Tender documents indicate that the Government spent over $95 million on licences and software assurance procured through the VSA in 2010-11.
Intermedium’s data indicates that since the commencement of the arrangement in 2008 to the end of the 2010-11 financial year, Data #3 entered into contracts with a total value of $208 million with Federal Government agencies for the provision of Microsoft software.
This figure does not include the annual contracts signed by Finance which cover the procurement of Core Desktop Licences on behalf of the Commonwealth. In 2011-12 this contract was worth $50.6 million and in 2010-11 it was worth $50.1 million.
Agencies currently procure software licences through the panel in two ways. Core Desktop Licences, such as those for Office Professional Plus, Windows Operating System Upgrades are managed by Finance. The procurement of non-Core Desktop Licence products is managed by individual agencies themselves, by approaching the LAR directly.
The Department of Defence originally contracted Data #3 as the LAR for the whole-of-government Microsoft VSA, while it was operating as the lead agency for the coordinated procurement scheme.
As part of the bulk pricing agreement negotiated with Microsoft itself, the software company insisted that a LAR be identified to fulfil the deal, leading to a subsequent approach to market in 2008.
Since then, responsibility for the VSA has shifted to AGIMO, and this is the office’s first approach to the market regarding the licensing arrangement.
Tender documents say that AGIMO will be looking to appoint one or more companies to a panel of providers of LAR deliverables, as did the equivalent Defence documents released in 2008.
Variations on the Microsoft Volume Sourcing model are currently used in a number of other Australian jurisdictions.
In NSW, the Department of Finance and Services has just renegotiated the unit price for its whole-of-government licensing agreement with Microsoft. The Large Account Resellers on the NSW panel are Data #3, Dimension Data and Insight Enterprises.
Insight Enterprises is also the Microsoft Large Account Reseller for the Whole of Victorian Government Enterprise Agreement. Only enrolled agencies are permitted to procure through this arrangement, however discount rates are available to non-enrolled agencies through the Government Open Licence Program.
The Queensland Government’s Microsoft Large Account Resellers are Insight Enterprises, Data #3, Dimension Data, Corporate Express and Dell.
In May this year, the Western Australian Government approached the market to appoint a single Large Account Reseller to replace its existing common use agreement for the supply of Microsoft Licences.
Insight has subsequently been contracted to the role.
AGIMO’s John Sheridan has said previously that the Microsoft VSA has seen a reduction in Microsoft licence costs of 25 per cent across the Federal Government. This exceeds the $15 million a year target originally set for the program.