Victory in Victoria?
Like WA, Victoria also runs an eServices Panel consisting of 130 vendors and resellers, who compete for all state-based contracts in excess of $100,000. Initially formed as a three-year panel in 2005, it has just been extended for 12 months before full review is carried out.
Procurement specialist for information and technology services within the Victorian Department of Treasury and Finance, Ted Skahill, said resellers need to demonstrate capabilities in a specified range of areas in order to get a place on the panel, and then compete with other panelists for specific contracts.
"Our job is to make sure the best of breed suppliers and resellers are on the panel; it is then up to the agency to make a selection based on their requirements," Skahill said. "Prior to this system, each department and agency would go to market with a separate tender, and in consultation with the Victorian Purchasing Board they could turn it into a whole of government agreement."
In an attempt to cut back on red tape, and create a system which responded better to the needs of individual departments, the Victorian Government introduced a State Purchasing Contract, which also enabled various departments to 'piggy back' contracts drafted by the State Purchasing Board and a departmental lead.
Although such contracts often identified a panel of ICT suppliers, they remained cumbersome and failed to capture a level of competition within the tender process. Once on a panel, resellers and vendors would face limited competition, and have access to growing markets as different departments and agencies picked up on the contract.
In an attempt to overcome these challenges, the Victorian Government launched the Government Services Group (GSG) last year, to take control of government services delivery, and find savings of up to $50 million by achieving efficiencies in terms of government purchasing.
According to Skahill, the GSG is moving to consolidate much of the government's ICT purchasing under a single shared services group referred to as Cenitex. However, the actual purchasing mechanisms have yet to be determined. "I believe we're talking to South Australia, Queensland and even Western Australia about their methods," Skahill said.
People first, but transparency lacking
In July 2006, the NSW Minister for Commerce, John Della Bosca, launched the so-called People First plan, which set out a framework for a more coordinated whole of government approach to ICT procurement.
Designed to consolidate all government ICT expenditure into a single figure, the plan was supposed to deliver efficiencies through back-office consolidation, saving the state $125 million per year in capital savings and $80 million in recurrent savings.
So far, the approach appears to be well on the way to achieving such savings. According to a spokesperson for the NSW Department of Commerce, Government Telecommunications Agreements, where agencies purchase as a combined entity, have generated more than $50 million per annum in savings, while a recently released personal computers standard contract is expected to bring about $30 million in savings across the state.
"The new contracts for Enterprise Resource Planning software consolidate the Government's systems onto two standard platforms with SAP and Oracle. This generates savings and supports the Government's strategy for encouraging shared corporate services," the spokesperson said.
On the ground, however, NSW continues to be criticised for a lack of transparency and a failure to integrate market mechanisms into the procurement process.
According to Intermedium's Hurditch, about two thirds of ICT contracts are whole of government Period Contracts managed through the State Contracts Control Board (SCCB) established for periods of three years, with two optional 12-month extensions.
As a result, although very large contracts must go to a competitive open tender, the bulk of the state's purchasing is caught up in longer term contracts, which rarely come up for review.
"It's difficult to become a member of a supply panel due to the length of time the panels are in place," Hurditch said. "Conversely, any company actually on a panel is in a good position so long as it's prepared to still go out there and market its product. A place on the panel is really just 'a ticket to the dance'."
A big part of the challenge, according to Hurditch, is a lack of skilled procurement professionals working within state government, although she said the government is attempting to deal with the shortage.
