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Shared services reaches further into Canberra

by Paris Cowan •
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A national price on carbon became effective as of 1 July and the agency set up to monitor it, the Clean Energy Regulator (CER) will operate with the support of a $19 million shared services agreement with the Department of Climate Change and Energy Efficiency (DCCEE).

The agreement between CER and DCCEE covers just over a year’s worth of service provision, from the date of the Regulator’s establishment on 2 April 2012, to 30 June 2013. At a value of $19 million the contract represents an expenditure of roughly 28 per cent of the CER’s $68 million operating budget for 2012-13, according to figures released in the Federal Government’s Carbon Price plan.

The contract also shows that the shared services is continuing to gain favour within the Federal Government, even though the pace of adoption is slower than that experienced by the centrally mandated corporate services overhauls seen in many of the States.

The deal also makes the CER the last in a ‘babushka doll’ line-up of inter-agency IT shared services deals, all of which ultimately fall under the remit of ASG in its role of infrastructure management outsourcer to The Department of Prime Minister and Cabinet (PM&C) .

PM&C signed a three-year, $24.5 million IT managed services contract with ASG in June 2010, continuing an outsourcing relationship between the two organisations of nearly ten years duration.

The ASG-provided services are available to DCCEE under an IT infrastructure services Memorandum of Understanding that DCCEE has with PM&C, worth approximately $10 million per annum. The memorandum covers desktop, network, telephone and help desk support services for DCCEE, and is reviewed on an annual basis. The Department of Regional Australia, Local Government, Arts and Sport also sources shared services from PM&C.

By signing up for general corporate services (IT and non-IT) from DCCEE, the Clean Energy Regulator becomes the latest body to join the cluster of agencies which fall under the umbrella of the ASG contract, a spokesperson for the DCCEE has confirmed. It is unknown what proportion of the $19 million agreement will cover IT costs.

To date the bulk of ICT procurement activity at the CER has been for ICT Labour Hire, which is unsurprising for an organisation with extensive start up requirements.  According to Intermedium’s data it has signed $2.5 million worth of ICT labour hire contracts since April.

Shared Services has returned the agenda in other areas of the Federal Government.  A review of operational efficiency within the Attorney-General’s Portfolio recommended its comprising agencies weigh up the pros and cons of implementing the model as a means of reducing their corporate services costs.

The head of the review, Stephen Skehill, also said that other portfolios made up of numerous smaller agencies should do the same thing. “There appears to be no reason why this process would not potentially be equally pertinent to other portfolios,” he said.

However, more Federal agencies may gravitate towards shared services even without a centralised directive to do so, given current budgetary pressures.

Already:

  • The Department of Industry, Innovation, Science, Research and Tertiary Education sources IT shared services from the Department of Resources, Energy and Tourism;
  • The Department of Veteran’s Affairs sources IT shared services from the Department of Human Services;
  • The Australian Customs and Border Protection Service has memorandum of understanding in place to collaborate on and share IT solutions, amongst other things with the Department of Agriculture Fisheries and Forestry; and
  • Under the Whole-of-Government Internet Gateway Reduction Program, all agencies will be required to share secure gateway infrastructure provided by one of eight lead agencies.

Intermedium’s 2010-11 Annual Market Overview report shows that the lowest two tiers of the Federal Government market (those agencies procuring less than $50 million in ICT contracts per annum) are facing higher procurement overheads per contract than the bigger agencies.

In 2010-11 procurement across these agencies accounted for just nine per cent of the Federal ICT market by contract value, but represented  29 per cent of the total number (5,400) of contracts commenced in that financial year.

Related Articles:

Attorney General’s portfolio could pave the way to shared services

AGIMO’s $181 million coordinated procurement success story

Clean Energy Regulator will have substantial ICT needs

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Jurisdiction
  • Federal
Category
  • IT Services
Sector
  • Resources
Tags
  • ASG Group
  • Clean Energy Regulator
  • DCCEE
  • Department of Regional Australia
  • Local Government
  • Arts and Sport
  • Department of the Prime Minister and Cabinet
  • IT Managed Services
  • Shared Services
  • Skehill Report