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Sheridan: Seeking industry input to improve IT Services procurement

by Paris Cowan •
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John Sheridan, head of Agency Services at the Australian Government Information Management Office (AGIMO) has announced that the Department of Finance are looking to engage ICT industry members to brainstorm ways to improve procurement processes in the challenging ICT Services business space.

He said that there were plans to release a Discussion Paper on the topic in the coming months, as the first stage in the process of developing a policy to improve the effectiveness of ICT Service procurement, and the accessibility of supply opportunities to small and medium companies.

Speaking to delegates attending Intermedium’sYear in Review Briefing in Canberra on Wednesday, Sheridan said that AGIMO had received feedback from many ICT Service providers who have articulated the difficulties they face in dealing with the government.

His figures showed that there are 80 ICT Services Panels in the Federal Government Market, and he acknowledged that companies need to be on the relevant panel and to be known to the agency in question before they will be asked to submit a quote.

“If you’re not known to the people putting out these quotes, it is very hard to get noticed, to get a recommendation, to get work, to get referenced as a consequence of that work, and then eventually to get into the market,” he explained.

He also said that the size and distribution of ICT Services contracts made it tough for suppliers working in this area to get ahead. The threshold at which an open tender process must take place is $80,000. With an average contract value in 2009-10 of $150,000, and a median value of just $40,000, the majority of Federal Government ICT contracts are not available to be contested by new suppliers.

While Intermedium’scategorisation of ICT Services is slightly more inclusive that Sheridan’s, Intermediumcontract data reflect the same trends.

Intermedium data shows that the ICT services category makes up 56 percent of the total Government ICT market contract total. While it contains the highest number of individual contracts, it also has the second lowest average contract value.

The ICT Services market leaders, IBM Australia and CSC Australia signed nearly $550 million worth contracts within this category in 2009-10, which is greater than the combined total signed by the next eight highest ranked companies.

The proposed Discussion Paper will contain draft policies designed to overcome the challenges faced by both companies and government agencies doing business in this space, and marks the first steps toward legislation that could impact on a large number of ICT suppliers.

Sheridan says that he hopes industry will actively take up the opportunity to be involved in the process.

“We’ll be putting out a discussion paper, and we want to involve you in the discussion, we hope that you will participate in the discussion.  With your cooperation we want to develop a policy that will address the challenges of the current ICT Services panel arrangements, and provide a more effective and efficient arrangement for both business and industry. “

The discussion paper will most likely be released on AGIMO’s blog, and industry members will have the opportunity to leave comments using the blog, or through other means of contacting the agency.

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  • John Sheridan