In his address to the Australian Information Industry Association’s (AIIA) Canberra Managers Forum, John Sheridan revealed that the Australian Government is due to make a decision on whether to go ahead with a whole-of-government IT Services Panel (WISP) by the end of September.
“That’s what I am expecting at the moment but these things can occasionally slip,” Sheridan told Intermedium.
If it goes ahead, the WISP will have a greater impact on the Federal Government market than any of the other Whole of Government panels thus far put in place. This is because it will have implications for a very large supplier base, the members of which have been accustomed to working in a highly devolved environment, with many of them concentrating on a handful of perennial client agencies.
According to Intermedium’s data, more than 1,200 IT Services suppliers did business with Federal Government agencies in 2010-11. This number includes labour hire contracts, which fall outside the scope of the proposed WISP.
As displayed in other jurisdictions, these suppliers face the prospect of being locked out of the market if they do not achieve a position on the panel.
If the plan is given the green light, an approach to market could take place as soon as January 2012, according to published procurement plans.
As First Assistant Secretary at the Australian Government Information Management Office (AGIMO), Sheridan first put forward the idea of a WISP in December 2010 with the release of a discussion paper designed to gauge feedback and crowd-source suggestions.
If implemented in the form outlined in the discussion paper, the WISP strategy will see nearly ninety ICT Services panels in operation across government rationalised down to four.
In the presentation, Sheridan hinted that the portfolio-based approach originally slated was still playing a key role in considerations.
“There are three portfolios that, combined, represent more than 60% of ICT services expenditure across Government,” said the December discussion paper. “As part of the reduction in panel numbers, we are proposing that each of these portfolios, and possibly a few other key portfolios, rationalise their existing panels into a single portfolio panel for ICT Services.”
As Intermedium has recently reported, the Australian Tax Office (ATO) and the Department of Defence – two of the largest ICT procurers in the government – have established IT Services panels recently which slot neatly into this procurement framework.
According to the discussion paper, agencies would have the opportunity to use any of the panels established, not only the WISP, under a “piggybacking” clause.
The portfolio-based panels would specialise in contracts over $250,000 while the WISP would take care of the bulk of small to medium contracts in this procurement category.
In its original form, the WISP proposal would also have the potential to buck the incumbency advantage that tends to prevail in panel procurements, not just at the Federal level, but also at the state level.
Traditionally, procurement via a panel arrangement requires agencies to seek a minimum of three quotes before selecting a supplier on ‘value for money’ grounds. Approaching this minimum number reduces the evaluation workload of the agency, but can lead to agencies habitually selecting the same short list of suppliers from which to obtain quotes because these suppliers have proven track records with the agency.
Under the WISP model, Requests for Quotations (RFQ) would open to all applicable panellists – creating more work for agencies but increasing value margins and introducing new alternatives.
“Because an agency’s initial shortlist for RFQ is based on the minimum number required, it can often be made up of incumbent, previous or familiar suppliers. An open bidding process can expose agencies to new suppliers and the value this process provides,” said the discussion paper.
In NSW, the IT Services panel 2020 has over 300 members, and the Victorian eServices panel got into hot water for restricting the number of panellists to 250.
According to a survey of NSW 2020 panellists, very few believed that the operation of the panel was creating new opportunities for them.