New IT procurement guidelines to support smaller businesses – September 2017
The Commonwealth Government has announced significant changes to the way businesses can sell IT services to the Government.
Assistant Minister for Digital Transformation Angus Taylor said that Government IT contracts will be capped at a maximum value of $100 million or three years’ duration to allow small and medium sized businesses the opportunity to bid for smaller components of larger projects.
The cap and time limit apply to IT procurements through the Government’s Digital Transformation Agency’s (DTA) but does not apply to other procurements, such as major direct IT purchases by Government agencies.
Addressing an industry briefing in Canberra, Assistant Minister for Digital Transformation Angus Taylor said the Government was aiming to inject an additional $650 million annually into small Australian tech companies.
“The Government is targeting an increase of 10 per cent of its annual $6.5 billion IT spend to smaller operators,” Assistant Minister Taylor said.
“These are exciting changes that will throw open the door for SMEs and allow government agencies to bring in new and innovative services,” Mr Taylor said.
“A cap is now in place to limit the term and value of government IT contracts. We are reducing the number of IT panels to make it easier for small players to supply services. We are actively encouraging small innovators to sell us their ideas.”
IT website ARN reported, “The Digital Transformation Agency’s (DTA) increased oversight of the government’s IT investment portfolio and its work to build digital capability is expected to address the calls for a more strategic IT procurement approach and a stronger technical workforce.
“The DTA, which has been charged with building a whole of government IT strategy, took over the bulk of the Federal Government’s IT procurement duties from the Department of Finance, which had long held the jurisdiction.
“From the outset, the DTA – which evolved from the Digital Transformation Office (DTO) – has had a focus on opening up access for smaller suppliers to pitch for government projects.
“Indeed, as of May, SMEs had picked up 82 per cent of the estimated $15.3 million worth of contracts tendered via the DTA’s Digital Marketplace online procurement portal, which was created specifically to give smaller players greater access to government jobs.
“Yet large providers have continued to dominate the engagements on big ticket projects, such as the Department of Human Services’ leviathan welfare payments system overhaul, which is tipped to top at least $1 billion over its life.”
Mr Taylor said the reforms were recommendations from the ICT Procurement Taskforce report.
“The Taskforce found a culture of risk aversion in government procurement had undermined the freedom to innovate and experiment. If we are to reward the entrepreneurial spirit, a new procurement culture is necessary.”
He said the 10 recommendations from the Taskforce cover issues as diverse as developing ICT-specific procurement principles, building strategic partnerships, data-driven reporting, enhancing the Australian Public Service’s procurement skills, and new procurement methods.
“I thank participants engaged in the public submission process and in roundtables, and congratulate team members who have compiled the final report, now published on the ICT Procurement Taskforce website.”
He said work would continue over the next 12 months to deliver more pathways to improve coordination and reduce duplication of ICT procurement across government.
The Digital Transformation Agency’s increased oversight of the government’s IT investment portfolio and its work to build digital capability would address the calls for a more strategic IT procurement approach and a stronger technical workforce.
The ICT procurement taskforce was established within the Department of the Prime Minister and Cabinet in October 2016 and became the responsibility of the DTA in February 2017.