Australia pools public IT buying

19 December 2017

The federal government has announced plans to overhaul the way it buys IT hardware by introducing a government-wide marketplace and online catalogue where agencies can procure.

The Digital Transformation Agency (DTA) said its hardware market place, due to be launched next year, would better "democratise hardware buying for both suppliers and agencies" and leverage demand across government.

“This marketplace will leverage DTA’s experience in successfully building and managing catalogue-based, simplified and co-ordinated procurement solutions such as the digital marketplace and the ICT procurement portal,” it said.

The move is the latest in a series of new co-ordinated buying schemes set up by the DTA to assist how government buys commodity IT products and services, stemming from recommendations by a procurement taskforce.

Recent reviews of the ITC Hardware and Mobile Panel, the systems currently used by the whole-of-government to procure IT products and services, found that both arrangements were “meeting the government’s overall objectives for co-ordinated procurement”, but recommended consolidating and refreshing the arrangements in 2018. 

The DTA plans for the marketplace to replace the government’s expiring ICT Hardware Panel, its existing Mobile Panel and the hardware categories of the commercial off-the-shelf Software and Hardware Panel. 

Together the panels have been responsible for more than $322m worth of hardware procurements since its inception. 

The DTA said the new marketplace would see agencies buy products across 17 categories through “one simple, clear and fast online catalogue”. It will also be constantly open, allowing sellers to be assessed and join at the DTA’s discretion and will be accessible by a federal, state and local governments. 

Agencies will be able to approach a single seller directly if the procurement falls under the $80,000 threshold, in line with the Commonwealth procurement rules.

Purchases above the threshold will require buyers to “issue request for quotation through an online platform to all sellers in the relevant category”, with sellers given the opportunity to respond with their “best and final offer”.

The seller’s offer will then be made available to all buyers in the marketplace for the life of the quote. 

The DTA said it would recover costs associated with the marketplace by charging government buyers that participate in the scheme an administration fee, which will initially be set at 2%.

It added it expects the full marketplace to launch on 31 August 2018, but said some products and services would be available from June 2018.

Meanwhile, the Australian National Audit Office (ANAO) revealed IBM, Fujitsu, Leidos Australia, Data#3 and Telstra as the biggest providers of IT and technology services to the Australian government.

The ANAO's Australia Government Procurement Contract Reporting report said IBM alone won roughly $2.3bn worth of work with federal government entities across almost 700 individual contracts between the financial year ending 2013 and the year ending 2017.

It said that overall the federal government spent around $35.9bn on information technology, broadcasting and telecommunication/engineering and research technology-based services during the period.

In 2017 alone the government spent $5.7bn on services within the IT and technology services category, around $1.47bn less than the year before.

Of the IT and telecommunications services providers, IBM, Telstra and Fujitus were among the biggest contract winners between 2013-2017.

Leidos won a $800m contract with the Department of Defence to supply centralised processing services until 2022 in September last year.

Local tech firm Telstra pulled in around $2.8bn worth of work via 1,091 contracts during the period, while fellow Australian supplier Data#3 won just over $900m worth of government contracts across 1,689 individual deals.

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