IT contracts capped to $100 mil or three years duration

By August, 2017 August 31st, 2017 Federal, ICT
New IT contracts from now on will be capped to a maximum of $100 million or three years duration in a reform to encourage more SMEs.

Assistant Minister for Cities and Digital Transformation, Angus Taylor. Image: Paul Hemsley/GovNews

The federal government is introducing a radical new set of reforms to the way private enterprise can sell ICT services to government.

In an announcement from the Department of Prime Minister & Cabinet, the Assistant Minister for Cities and Digital Transformation Angus Taylor has proclaimed that government IT contracts from today onwards will be capped at a maximum value of $100 million or three years duration.

According to the Department, this is to allow small and medium sized businesses the opportunity to bid for smaller components of larger projects.

Mr Taylor said government is targeting an increase of 10 per cent of its annual $6.5 billion IT spend to smaller operators.

“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.”

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.”

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.”

The Department of PM and Cabinet said that work will continue over the next 12 months to deliver more pathways to improve coordination and reduce duplication of ICT procurement across government.

‘The DTA’s increased oversight of the government’s IT investment portfolio and its work to build digital capability will address the calls for a more strategic IT procurement approach and a stronger technical workforce,’ the Department said.

The ICT procurement taskforce was established within the Department of the Prime Minister and Cabinet in October 2016 and became the responsibility of the Digital Transformation Agency in February 2017.

The subject of outsourcing ICT projects to smaller companies was recently discussed at CeBIT Australia 2017 during the eGovernment forum, in a panel including Senior Adviser Cyber Policy, Department of Prime Minister and Cabinet Jacob Boyle; Deputy Director Information Systems and Services / CIO, Bureau of Meteorology Dr Lesley Seebeck; and Executive Director, Policy and Innovation, Department of Finance, Services and Innovation Dawn Routledge.

The discussion was in the context of the eCensus debacle, which was notable for the federal government’s relationship with vendor IBM, which came under criticism for the vulnerabilities that led to a Distributed Denial of Service (DDoS) attack.

According to the panel, it would make sense to introduce more “innovative businesses” beside the larger vendors to shoulder the burden and risk.

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