Perfect one day, Queensland the next
In August 2007, Queensland adopted the clumsily named but popular QP-707 arrangement, effectively consolidating the expenditure of nine previously separate agency purchasing arrangements. The panel included Data#3 delivering HP and Toshiba hardware, Fujitsu offering Lenovo, Acer and IBM solutions, and Dell supplying its own hardware.
"The arrangement was designed to achieve better value for money, a more consistent desktop platform, transparency across the sector, minimum standards for sustainability, and standardisation of service requirements across the sector," Queensland Minister for Public Works, Robert Schwarten, said. "All offerors had to compete on the selection criteria but, in particular, the tender required successful offerors to have a network of local service agents."
With an emphasis on channel partnerships, and a series of comprehensive energy and sustainability requirements such as appropriate disposal of used equipment, Minister Schwarten said feedback received from the relevant agencies has been largely positive.
"I am informed that the new approach is progressing well and is meeting the initial goals with a high degree of client agency satisfaction," he said. "It should be noted that there is significant voluntary use of QP-707 by Queensland local governments, government-owned enterprises and non-government organisations. This is a further endorsement of the arrangement's success."
The arrangement replaced a series of direct agency contracts with a single panel-based approach, which, like NSW, has appointed panellists for a period of three years with two 12-month options to extend. And although the length of the contract has come under fi re for reducing competition in the sector, Data#3's Grant said the time period forces participants to plan and invest for the long term.
"We have to look at it in terms of a five-year investment, and make sure we have the facilities to respond over that period," he said. "It would be difficult for a smaller reseller to successfully bid, not just because of the cost of the bidding process, but because of the logistics required to fulfil the contract."
Strategies for success
Given this mixture, it is little wonder ICT companies with five employees or less find themselves largely precluded from working with government in most states, let alone at federal level. But these micro enterprises make up 78 per cent of businesses operating in the sector, and despite the odds, some are finding a way through to secure a piece of the $34 billion annual government IT spend.
While it is potentially lucrative, the journey into government procurement is a challenging one across all states, and at federal level. Nonetheless, those that are willing to start with local government and work their way through contacts and word of mouth recommendations are off to a good start.
Zynet managing director, Paul Turner, is just beginning to get some insight into the complexities and rewards of dealing with government tenders. Having built up a successful ICT business servicing the private sector, he's currently attempting a leap into the more convoluted environment of pitching for government work.
"They're a difficult beast because you have to make contact with key stakeholders to understand their requirements, which means you're pushing through road blocks," he said. "We're evaluating whether it's worth our while to deal with the added demands of working with government, because at this stage it is out of our core business area."
As it turns out actually getting onto a panel, or being awarded a tender is but the first step in a long road, according to general manager of commercial sales at Dell A/NZ, Simon Johnson. The challenge, he said, lies in keeping up with ongoing reviews that most states demand of their ICT panellists.
"We think it's a good thing, but tendering is a lot of hard work. We've got dedicated tender teams that invest a lot of hours, resources and marketing resources just to produce the bids. The process is always ongoing," he said. "An organisation should be very clear about tracking to service level agreements, and meeting ongoing requirements."
According to Johnson, most state and federal government tenders require panellists to prepare for monthly face-to-face reviews, or quarterly scorecards to measure how you're tracking to the original service level agreements. Moreover, as Hurditch suggested, actually getting onto the panel is just the first step, especially in those states where panels are more open, and designed to create a competitive community of service providers.
"The sales cycle begins two or three years out and it continues once you're actually on the panel," Acer's Cefai said.
A successful panel bid required ongoing marketing prior to and beyond the actual bidding process, he said.
