Victoria backs off NZ-style procurement

Victoria's state government in Australia may adopt a more open system of identifying potential suppliers for government contracts

Victoria’s state government in Australia may adopt a more flexible and open system of identifying potential suppliers for government technology contracts which, some local developers say, could work better than the New Zealand government’s approach to whole-of-government ICT procurement.

Currently, procurement in Victoria is administered through the eServices panel, a group of approved technology service providers, managed by the Department of Treasury and Finance (DTF). The panel contains 368 approved companies selected by DTF, based on a formal qualification process.

The proposed new system will allow any supplier to enter their details onto a register, through an online form. They will be vetted only for financial sustainability and adequate insurance.

Under the present system in New Zealand, providers bid through a normal tendering process either for appointment to a panel of whole-of-government suppliers or for supply to a group of agencies on the understanding that that the terms of supply under that contract will be extended to any agency (syndicated procurement).

The New Zealand and current Victorian systems, though different, effectively close opportunity to new entrants, says NZRise president Don Christie. “Once the tender is concluded, they’re closed for a number of years and if you’re not on the panel you can only get in through the back door or by collaboration with an existing supplier. It seems what the Victorians are saying [under the new arrangement] is that the panel will always be open for [new suppliers] to join,” he says.

“That’s certainly the sort of feedback NZRise has been giving to [the NZ] government; that that sort of approach is much more likely to keep the market dynamic and to keep the government exposed to innovative solutions and new technology.”

“The [Victorian state government] register is an inclusive model that allows all companies, and particularly small and medium enterprises the opportunity to conduct business with government by reducing the barriers to entry as qualification conditions become less onerous,” says a “high-level implementation plan” document for the new regime.

New companies will be able to qualify for membership at any time, “including new SMEs and overseas companies investing in the State for the first time. All existing eServices Panel members would be automatically transferred to the register.”

The broad criteria for qualification gives the purchaser a broader and more dynamic choice of potential suppliers without the expense of a full RFP and tender process, but still places the power of the final decision in the hands of the purchasing agency, Christie says.

“They will still put out statements of work and get companies to respond to those,” but there is a clear intention to reduce the complexity and cost of the tender process, he says.