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Priority 4: Transform ICT and digital procurement

Our agency develops and provides guidance to agencies on applying ICT procurement policy. We are working to support best practice procurement, inclusive markets and good working relationships between buyers and sellers. This will mean that agencies can embrace modern, streamlined ways of doing business now and into the future.

Corporate Plan 2017–21

We measure our performance against this priority by assessing progress against a:

  • success measure related to value for money on ICT spend.

Success measure 4.1

Greater value for money delivered on government ICT spend

Improved procurement practices across government

Target: Working towards implementing the recommendations agreed to by government from the procurement taskforce report

Source: Corporate Plan 2017–21

Overall assessment: Achieved

Results

  • ICT procurement framework—This year we released the ICT Procurement Taskforce report and began implementing the 10 recommendations including a framework, policies and templates to improve digital sourcing and procurement practices, and deliver reform.
  • ICT procurement policies—We released the ‘Capped Term and Value’ Policy and started developing the Panel and Fair Criteria Policies. The policies are designed to improve the experience of buying and selling digital products.
  • Digital Marketplace—The Digital Marketplace is improving procurement practices across government by driving increased competition for the government’s annual ICT spend. In 2017–18 another 469 sellers registered, 43 more agencies used the Digital Marketplace and 643 opportunities were published.
  • Whole-of-government volume sourcing—We leverage combined government purchasing power to get better prices and consistent terms and conditions. In 2017–18 we established new supplier whole-of-government arrangements with IBM, SAP and Concur Holdings. During the year we also released the first category of the new Software Licensing and Services panel, which was for Microsoft licensing.
  • Digitally enabled panel trial—We supported the Australian Taxation Office in trialling the transition of one of its panels to the Digital Marketplace. This involved digital enablement of the panel, involving 21 agencies and 22 suppliers. Users reported the panel enabled a simple and easy procurement experience.

Further explanation about our work under Priority 4: Transform ICT and digital procurement

Transforming how government buys digital products and services

We are making it simpler and faster for government agencies to buy ICT and digital products and services, and simpler for industry to sell to government. This includes implementing reforms recommended by our ICT Procurement Taskforce. The taskforce reviewed how government purchases digital products and services, and its recommendations were accepted by government in August 2017. The activities we have delivered include:

  • Digital Sourcing Framework for ICT Procurement—We spent six months co-designing with government agencies the underlying framework to help agencies buy digital products and services in an effective and efficient way. The first phase went live in June 2018. We also released a Digital Sourcing Contract Template to make it easier for buyers and sellers to agree terms.
  • ICT Procurement Policies—We released the ‘Capped Term and Value’ Policy, which limits the size and duration of projects to reduce risk and improve market openness. A discussion paper on a draft Panel Policy was released with the aim of designing panels that are more industry-friendly and lead to better purchase outcomes for government. We also started developing the Fair Criteria Policy to improve fairness for suppliers in sourcing decisions.
  • Digital Marketplace—We increased competition in the market and helped smaller businesses compete for government contracts through the Digital Marketplace. A total of 952 sellers had registered as at 30 June 2018. The contract value awarded to SMEs through the marketplace was 74 per cent, more than double the last-collected Australian Public Service average of 30 per cent in 2015–16 (see Spotlight on...Better business, better outcomes).
  • Volume sourcing and panel arrangements—We managed a range of ICT procurement arrangements for agencies to simplify procurement processes, reduce administrative costs, improve terms and conditions, and secure better value for money. These included the Cloud Services panel, Microsoft Volume Sourcing arrangement, Data Centre panel, ICT Hardware panel, Mobiles panel, Telecommunications Services panel, Software Licensing and
    Services panel, and the Digital Marketplace.
  • Industry consultation—We consulted closely with industry to improve government ICT procurement practices. For example:
    • We hosted a CEO roundtable with a dozen leaders from digital business to consult on issues such making panels easier to join and use, asking the market for outcomes, and encouraging
      alternative contracting methods.
    • Based on sellers’ interest in providing their expertise, we hosted a co-design workshop with industry and scoped a new ‘Ask the Market’ feature, for the Digital Marketplace.

Spotlight on... Better business, better outcomes

Changing the way government does business

The way government sources digital products and services is changing.

In August 2017 the government announced significant reforms, including capping maximum contract values and duration. The aim is to change government buyer behaviour, breaking down large purchases into smaller, component parts. This is expected to open up more opportunities for SME and increase government’s access to innovation.

Other changes include reducing the number of IT panels, to make it easier for small players to supply services, developing ICT-specific procurement principles, building strategic partnerships, supporting data-driven reporting, and enhancing public service procurement skills and new procurement methods. The reforms are accepted recommendations of our ICT Procurement Taskforce report released in August 2017.

Transforming our approach to drive change

We are taking new and innovative approaches to help change the way government buys ICT and digital services. This includes looking at how design processes can be more focused on both government and industry needs. One example is designing policy using exemplar teams made up of multiple government agencies, led by service designers and user researchers. The ‘panel policy exemplar’ team from six agencies came together for four weeks to look at how to simplify the way government buys digital products and services. In this concentrated period of time, the team did extensive research, mostly one-on-one interviews and predominantly involving industry.

Providing more opportunities through the Digital Marketplace

Alongside these reforms we are running the Digital Marketplace, which is helping to connect government buyers to small and medium sellers. The Digital Marketplace allows for procurement interactions to match the level of simplicity or complexity appropriate to the circumstances of the buyer and seller involved, and makes the outcomes more transparent.

Since the Digital Marketplace started in August 2016, around 840 opportunities have been published, with some 74 per cent awarded to SMEs. During 2017–18 alone:

  • 469 new sellers joined the Digital Marketplace, 33 per cent who had not previously done business with the Commonwealth
  • 43 additional agencies used the Marketplace
  • 643 new opportunities were published, with around 74 per cent of the business awarded to 171 SMEs
  • $134 million in contracts were reported, with 13 per cent growth each month.

Half the registered buyers are from state, territory and local governments, demonstrating the value of our work leading collaboration across government to deliver better outcomes for SME
digital enterprises, government agencies and, ultimately, the people using their services. The Digital Marketplace has been developed in an agile way, and will continue to evolve over time in response to user needs.