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Why tenders need TLC

by Staff Writers •
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Changes to procurement arrangements announced during 2008 will lead to fewer contracts of greater value going to market, making each Request for Tender (RFT) all the more important.

The Federal Government is leveraging whole-of-government purchasing power to drive down prices and reduce the costs of ICT procurement.  It intends to enter into volume sourcing arrangements (VSA) for certain products and services, as part of the Coordinated Procurement contracting policy announced by Minister Tanner last September. 

The first VSA for Microsoft products was announced earlier this month.  According to a media statement released by the Minister for Finance and Deregulation Lindsay Tanner, the VSA is expected to reduce agency costs each year by at least $15 million each year for four years starting July 2009. 

“The Microsoft VSA provides agencies with access to substantial discounts off the price for Microsoft products and reduces the need for protracted negotiations between individual agencies and Microsoft. The discounted prices, combined with process efficiencies in the VSA, will provide a considerable cost reduction for agencies,” he said in the statement.

The changed Commonwealth Procurement Guidelines includes Coordinated Procurement Contracting arrangements which make it mandatory for agencies to use existing standards where they exist unless an exemption has been granted.   As a result, there will be reduced procurement opportunities.

The new Guidelines also clarify Co-operative Agency Procurement ("piggy backing”).  Set to reduce the overall number of tenders, agencies will be allowed to use another agency’s contract if the contract contemplates it, rather than engaging a separate RFT process. 

Essentially, each tender is now likely to be more strategic and important for suppliers.  Missing out on major contracts may effectively shut some suppliers out of the Federal Government market for some time. 

It is vital that suppliers have a detailed knowledge of the government tendering process, so different from the commercial sector, and hone the skills of their tender teams.

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  • Federal
  • Commonwealth
  • Coordinated
  • Guidelines
  • Microsoft
  • Procurement
  • RFT
  • Sourcing
  • Tenders
  • Volume