On 7 September the Federal Government implemented a new Stationery and Office Supplies (SOS II) Panel. Last year sales through the previous SOS Panel were worth $38 million. One supplier says the new contract unfairly favours foreign-owned companies over Australian suppliers, because the only manufacturer of Australian made indigenous paper refuses to supply the only […]
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Last year sales through the previous SOS Panel were worth $38 million. One supplier says the new contract unfairly favours foreign-owned companies over Australian suppliers, because the only manufacturer of Australian made indigenous paper refuses to supply the only Australian owned company on the Panel. “Instead of creating fairness for Australian businesses, the SOS Panel II has unknowingly created a system where the Government is favouring two foreign owned companies over Australian owned businesses,” says Mitchell Ross, CEO of Muru Group, a Sydney based and Australian owned stationery business. The Panel makes it mandatory for all non-corporate Commonwealth entities to make all future purchases with the two SOS II panellists – Complete Office Supplies (COS) and Winc. COS is Australian owned, and Winc (formerly known as Staples) is US owned. COS supplies paper from Muru. The problem, Mr Ross, told Government News, is in the sourcing of paper. “What the Government did not realise is that the Japanese owned Australian Paper Mills (APM) holds a monopoly on all paper produced in Australia. “While APM has been producing paper for Winc, it has repeatedly declined requests to produce the Muru brand for Australian owned COS. That means COS and Muru cannot supply Australian-made paper. “Through clever marketing APM has convinced the Government that buying Australian produced paper is beneficial to Australia and will save the Government money, but what about Australian businesses who truly support Australian workers and the community? “If APM refuses to supply us Australian made paper, we must source our paper from overseas. But we are Australian owned and we’re doing more for Australia.” He says that Muru supports Australian jobs and contributes 15 percent of its profits to ‘closing the gap’ initiatives for Indigenous communities. “These initiatives include the support of an early childhood education program in far north Queensland for Indigenous pre-school children, as well as donating computers to Indigenous community organisations across Australia to create a positive legacy for future generations.” Mr Ross says that Government agencies should think more deeply about their procurement decisions, and that buying Australian product does not mean you are supporting Australians. “Australian businesses want to produce product in Australia, to see more jobs go to Australian workers, and to benefit our economy. Both COS and Muru Group rigorously and continually request to engage in services with APM, but with no success.” [post_title] => ‘Buy local’ purchasing plan backfires [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => buy-local-purchasing-plan-backfires [to_ping] => [pinged] => [post_modified] => 2017-10-20 02:49:31 [post_modified_gmt] => 2017-10-19 15:49:31 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.governmentnews.com.au/?p=28292 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )  => WP_Post Object ( [ID] => 28155 [post_author] => 670 [post_date] => 2017-10-02 22:38:38 [post_date_gmt] => 2017-10-02 11:38:38 [post_content] => The Australian National Audit Office has examined the Australian Rail Track Corporation’s pre-construction preparations for the Inland Rail and found that the ARTC must be better prepared when spending the government's $8.4bn. The Inland Rail program is to construct a rail line from Melbourne to Brisbane, covering a total distance of approximately 1,700 kilometres. In 2014, the Australian Government provided $300 million for pre-construction work on the proposed rail line, and in 2017 committed $8.4 billion to build it. The Australian Rail Track Corporation (ARTC, a wholly government owned business enterprise) is undertaking the pre-construction work, and has been selected by government to deliver the full program of works over the next seven years, 2017–18 to 2024–25. In managing the pre-construction phase of the Inland Rail program, the ANAO found that the ARTC could have had a greater focus on achieving value for money in procurement activities. The ARTC identified the need to improve existing business functions and procurement practices throughout the pre-construction phase, and commenced initiatives to strengthen administration. These initiatives need to be fully implemented to support the ARTC in effectively managing the full Inland Rail program in coming years and delivering value for money. Testing of a sample of 54 procurements for the Inland Rail program found a lack of consideration given to competition in the early phase of the program, where a considerable proportion of procurements (17 per cent of the sample) were sole sourced. Procurement activities improved during the sampling period, as new systems, processes and practices were implemented. The ARTC’s established Information and Communications Technology (ICT) systems and procurement and document management processes and practices were well short of the needs of the Inland Rail program. The ARTC is further reviewing its procurement policies and procedures and supporting business functions for the full construction of Inland Rail. Governance arrangements oversighting the pre-construction phase of the Inland Rail program were appropriate, in so far as they adapted to the different stages of the implementation of the program, and considered the Australian Government’s interests with regard to longer term decisions about the delivery of the complete Inland Rail. There was no evidence, however, that due consideration had been given to matters raised about the skills and status of committee members, specifically in relation to departmental representation. There could also have been more emphasis on achieving value for money in procurement and contracting activities. Grant funding was appropriately managed for each of the four funding packages provided for the pre-construction phase of the Inland Rail program. However, high-level deliverables, outcomes and reporting arrangements were not developed through the Minister’s required funding agreement for the pre-construction phase, which could have supported greater emphasis on obtaining value for money in procurement activities associated with the milestone deliverables identified in the grant funding submissions. Procurement The ARTC did not have appropriate ICT systems to support procurement for the pre-construction phase of the Inland Rail program. There was a heavy reliance on manual processes, paper-based approvals and non-standardised records management procedures. As at July 2017, specifically for the Inland Rail program, the ARTC has upgraded the Contracts module and implemented a Tenders management module in the corporate Financials & Supply Chain system, and is at an early stage in deploying a system for records management. These improvements, if fully bedded down, with intended functionality being utilised and supported by updated procedural documentation, would strengthen the Inland Rail program’s procurement processes and records management, and could have application more broadly across the ARTC. The ARTC did not have appropriate policies and procedures to support procurement for the pre-construction phase of the Inland Rail program. Established procurement policies and procedures were not sufficiently robust for the administration of the Inland Rail program. Testing of a sample of procurements undertaken between 29 April 2014 and October 2016 for the pre-construction phase of the Inland Rail program found shortcomings in providing value for money. There could have been greater consideration of competition in the selection processes, although the use of non–competitive procurement methods was concentrated in those procurements undertaken prior to July 2015. In the sampled procurements conducted after that date, there were improvements in the levels of competitive procurements and documentation. Evidence of the importance of probity in procurement is shown through ARTC’s contracting procedure, but testing identified insufficient documentation of the reasons for or against using a probity advisor. The testing also showed many variations to contract values that were not sufficiently explained, and work commencing prior to contract execution. These issues had been identified in ARTC internal audits. A review of the documentation for four later procurements showed improvement in the procurement process, consistent with the upgrade in the systems and newly developed policies and procedures supporting procurement for the Inland Rail program. The ARTC’s response As a general observation, ARTC considers the findings do not adequately reflect the uncertainty and lack of clarity associated with the initial funding, longevity and responsibilities for the program during the period when decisions were being made as to the future of the Inland Rail project. Indeed, it was only in May 2016 that ARTC was confirmed as the delivery agency and in the May 2017 Budget that the funding commitment was confirmed. This imposed constraints on ARTC’s approach to procurement, contract management and the project’s risk management approach. Notwithstanding this high level of uncertainty, 45 out of 54 tested procurements were competitively sourced through tenders, standing offers and quotes. Within this context, ARTC was also focused on achieving value for money. Even though, as observed, ARTC is not obliged to follow the Commonwealth Government Procurement Guidelines, subsequently, ARTC has sharpened its approach to Inland Rail’s procurement and contract management. In addition, monthly management reporting is being enhanced. [post_title] => $8.4bn to spend? Improve procurement [post_excerpt] => The ANAO has found that the ARTC must be better prepared when spending the $8.4bn. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => want-spend-8-4bn-improve-procurement [to_ping] => [pinged] => [post_modified] => 2017-10-06 10:28:42 [post_modified_gmt] => 2017-10-05 23:28:42 [post_content_filtered] => [post_parent] => 0 [guid] => https://governmentnews.com.au/?p=28155 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )  => WP_Post Object ( [ID] => 28135 [post_author] => 670 [post_date] => 2017-09-29 09:59:44 [post_date_gmt] => 2017-09-28 23:59:44 [post_content] => The Public Health Association Australia (PHAA) and several other leading health organisations have written an open letter calling for an urgent focus on the deteriorating health and well-being of South Australians in addition to clear, state-wide strategies to address the problem. PHAA joined a consortium of health organisations including the South Australian Council of Social Service, Australian Health Promotion Association, Anti-Poverty Network SA, and People’s Health Movement Australia to express serious concern over the soaring rates of non-communicable disease in South Australia, particularly among lower socioeconomic groups. President of the Public Health Association SA Branch Kate Kameniar said: “We’re calling for urgent action to be taken by a strong leadership with a visible commitment to improving public health. We need the Chief Public Health Officer elevated to lead the focus on prevention and health promotion, as well as significant investment in the health sector and the Health in All Policies initiative.” “We want to see an evidence-based plan of action that supports all public institutions and places as health-promoting environments. Changing the settings in which we work, live and play can make an enormous difference; whether it’s through increasing physical activity by installing better cycleways and walking paths, encouraging healthier food choices, or creating more smoke-free public zones,” Ms Kameniar said. CEO of the South Australian Council of Social Service Ross Womersley said: “Recent cuts to funding have reduced the health and community services workforce capacity to an all-time low, and there is now less focus and resources to address preventable causes of illness in the population. “Chronic diseases caused by obesity, poor nutrition and smoking are severely impacting the health of South Australians, along with inadequate access to health care due to spiralling costs. These problems most affect people who are experiencing higher levels of poverty, who generally have fewer educational qualifications and employment prospects. These are the social determinants of health and it’s why we need a health in all policies approach. “Given the current financial climate we simply cannot afford to wait, and we urge the state government, the opposition and indeed all political parties, to prioritise the long-term needs of South Australians in their policies as well as reduce ingrained social and health inequalities. This can’t go ignored any longer,” Ms Kameniar said. [post_title] => SA must spend more on health [post_excerpt] => An urgent focus on the deteriorating health and well-being of South Australians is needed. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => sa-must-spend-health [to_ping] => [pinged] => [post_modified] => 2017-10-06 10:30:15 [post_modified_gmt] => 2017-10-05 23:30:15 [post_content_filtered] => [post_parent] => 0 [guid] => https://governmentnews.com.au/?p=28135 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )  => WP_Post Object ( [ID] => 28109 [post_author] => 670 [post_date] => 2017-09-25 13:49:52 [post_date_gmt] => 2017-09-25 03:49:52 [post_content] => Keith Dodds The procurement reforms recently announced by Angus Taylor, Assistant Minister for Digital Transformation and Gavin Slater, the new CEO of the Digital Transformation Agency (DTA), represent a step in the right direction for digital innovation in government – but when it comes to breaking the back of old-school technology procurement, we are only just scratching the surface. The Australian government is the largest single buyer of IT services in Australia, spending $6.5 billion annually. It’s all taxpayer-funded and much of it is being misspent. For 40 years, big, multinational software package vendors have enjoyed procurement practices that have effectively enabled them to hold the government and its citizens ‘hostage’. Their long-running, multi-year contracts with big bang deliverables have cost government and taxpayers dearly, often with disastrous results (think #CensusFail and Queensland Health to name just two). Limiting contracts to three years, with no extensions, and capping contract amounts at $100 million will certainly curb some of the damage. However, many applauded the reforms for their potential to open up new opportunities for the local start-up community, yet existing panel arrangements favour an old-school approach that benefits large incumbents and encourages near-monopolistic practices – while continuing to stifle younger, smaller and more innovative companies. It is not just start-ups, either, as many smaller service providers have struggled for years against the current contract and procurement system. When the Turnbull government promised to have a “whole of government digital transformation strategy” in place by the end of 2016 if re-elected, our team helped the DTA facilitate a process of intensive interviews and workshops to cross-fertilise thinking across a wide range of federal government agencies. The end result was a Government Digital Transformation Roadmap. The procurement taskforce report acknowledges the need for “a comprehensive ICT strategy to help guide agencies’ ICT procurement decisions in order to drive the government’s digital transformation agenda”. However, government won’t be able to truly embrace innovative digital transformation until it creates the right conditions – an environment that breeds and nurtures suppliers who are capable of delivering the innovative solutions it needs. In the meantime, the delay is costing hundreds of millions of dollars during a time of fiscal restraint. The waste must stop. In the UK, the Government Digital Service took steps in the very early stages of its digital transformation to break the procurement stranglehold of entrenched players. A plethora of new suppliers are now serving the UK Government, and taxpayers, as a result. This is one of the reasons the UK (and other European countries) are further advanced when it comes to citizen-centric digital services. In Australia, we need to set an aggressive, mandatory deadline for the replacement of the outdated panel system and establish a truly open marketplace in its place. The DTA’s Digital Marketplace was intended to do this, but many large agencies are barely using it (if at all). The government must also look to expand its use of open source. The government’s Digital Service Standard mandates the use of open standards where appropriate, making all new source code open by default and measuring performance against KPI reported on a public dashboard. Yet closed, proprietary packages remain the rule, not the exception. Finally, it is critical that compliance with these objectives is made mandatory and public. The DTA’s ‘Performance Dashboard’ aims to “make data open and accessible by measuring the performance of Australian government services” and promote government transparency, but it does not report on contract awards by vendor, longevity, open source versus proprietary solutions, etc. Such visibility is required to make and measure demonstrable progress and to adequately serve the public interest, which at the end of the day, is the government’s primary obligation. Keith Dodds is the director of client relations in Australia for ThoughtWorks. [post_title] => Digital procurement needs major reforms [post_excerpt] => Antiquated government procurement is still impending innovative digital transformation. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => digital-procurement-needs-major-reforms [to_ping] => [pinged] => [post_modified] => 2017-09-25 17:56:19 [post_modified_gmt] => 2017-09-25 07:56:19 [post_content_filtered] => [post_parent] => 0 [guid] => https://governmentnews.com.au/?p=28109 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw )  => WP_Post Object ( [ID] => 28068 [post_author] => 670 [post_date] => 2017-09-18 16:17:32 [post_date_gmt] => 2017-09-18 06:17:32 [post_content] => Alan IvoryWith more and more government departments looking at ways they can digitally transform their practices, many are looking at software as a service (SaaS) providers as a core part of that strategy. Previously only consistent in their disparate approaches, a clear set of procurement practices are now emerging to ensure the successful integration of SaaS and maximise ROI. Working with the biggest brands in the world, I have spent thousands of hours with both government and enterprise procurement teams. Over the last year, this has involved facing over 20 different procurement departments in Asia Pacific and globally across the finance, technology, telecommunications, retail, government and travel sectors. Based on that experience, below are my top tips for a smooth procurement process.
SaaS procurement has changed the very nature of procurement teams and their core skillsets. Today’s best teams are no longer just looking at contract value or the software as a platform – they are looking at how the software will be adopted more widely by the organisation or department. This is so relevant in government where teams are often large and diversely skilled, getting the whole team on board early is essential. The success of a project depends upon the integrity of the implementation, hence executing this phase flawlessly can prevent issues from creeping up further down the line.
- Implementation first
SaaS will inevitably impact multiple teams and departments. Staying involved and engaged throughout all the stakeholder reviews is the only way procurement can meaningfully understand the requirements unique to each unit. Where we used to see procurement collecting opinions, this deeper level of understanding provides a more balanced overview of the suppliers competing for the contract, so you are comparing apples with apples. For our business, this generally starts with the event team, then moves through marketing, finance and IT.
- End to end ownership
The single truth of a SaaS is it should improve your efficiency, ideally reducing the number of vendors you use. This, in turn, reduces risk, contracts, manual processes and overheads. To drive a more efficient procurement timeline, with stakeholder engagement still high at the critical onboarding phase, government organisations need to invest in personnel with a unique skillset. They will need to repeatedly bring multiple stakeholders across numerous teams together and extract the complex ways SaaS will impact, improve or challenge them. It’s a common mistake to have a ‘techy’ run this process. While they may understand the technical implications, we frequently see the engagement efforts derail due to the lack of experience in meeting facilitation.
- The skill set
Procurement based on contract terms and price is setting itself up for failure. Conversely, striving for operational excellence hallmarks the most successful outcomes. We are seeing the best procurement teams asking to complete pilots. Most SaaS providers will have a testing platform alongside their production platform.
- Operationally centric
Integrations are a critical part of the SaaS procurement process. Look at how the software works within your own software climate - often something difficult to change within government. Determine the short term and long term goals and ask how the platform can fit into that. How will the data flow? What are the advantages and the costs to deploy? Leaders in this field are testing the integrations in pilot phases, ensuring they work with existing software, CRM, MA, financials, membership software, etc. Integration teams from the vendor and client agree on the integration piece and test with dummy data for a full end to end review. It’s also important to ask: what is the ROI of those integrations and what are the cost savings? Cost of implementation is no longer the primary focus, as organisations instead look to cost reductions of replacing manual processes and headcount reductions. The value inherent in provision of real-time analytics and big data enable further cost savings or revenue generation.
- Don’t just test the software, test the integrations too
If you want the SaaS vendor to provide a project team to assist in the deployment, meet the team – not just the sales team. Make sure the team is local, has the resources, and will be dedicated to your organisation during the process. Ask who is running the project. If utilising the vendor’s professional services team, make sure there is an alignment between procurement so the expectations are unambiguous.
- Work in partnership
Make sure all of your internal stakeholders understand the contract. Previously a tightly-held document, we are seeing an evolution into contract transparency from the top tier procurement teams. The best implementations occur when significant time is invested in multi-team consultation and onboarding after the contract is signed, with positive uptake and a sense of ownership driving optimal engagement. Conversely, where stakeholders are given no sense of ownership or empowerment we are seeing poor adoption rates, departmental stand-offs and resentment from lack of buy-in.
- Contract transparency
Most successful procurement teams have KPI linked to the successful outcome of the project implementation, not the contract value. There has never been better reason for procurement to have a part of the onboarding process, involving multi-team training of all stakeholders and any third-party agencies that may have interactions with the SaaS. If this process is not driven powerfully internally, then the project will stall here, no matter how motivated the vendor is. Disenfranchised stakeholders, under-skilled users, and lack of internal project management will quickly derail any SaaS uptake into your business.
- Own the onboarding
Surprisingly, software RFP have not evolved well with the digital era. Often they are a technically focused generic checklist of features, as opposed to focusing on organisational objectives. Make sure your RFP is up to date, has had input from the various departments and stakeholders, and is aligned with the its overall needs. Here are some of the more important, but often omitted, questions from RFP:
- Security and compliance
- Where is the data stored?
- What level of data security standards have you reached?
- What level of encryption do you hold your data to?
- Team location
- Absorbing entities’ lease requirements, where feasible, into existing vacant office accommodation (Operation Tetris) undertaken in the ACT in 2015-16 and rolled out nationally from 2016-17.
- Ensuring that leases and other property services are delivered through coordinated procurements that will maximise the Commonwealth’s substantial purchasing power.
- A reduction in the median work point vacancy rate from 20.9 per cent (2015) to 13.8 per cent (2016).
- A reduction in net lettable area leased by the Commonwealth from 3.13 million square metres in 2015 to 2.89 million square metres in 2016.
- Government as market enabler and developer.
- Value for money.
- Robust outcomes-based measurement and evaluation.
- Fair sharing of risk and return.
- Outcomes that align with the Australian Government’s policy priorities.
- Amending the rules to require all goods purchased by the Australian Government to comply with national standards.
- The introduction of policies to promote environmentally sustainable procurement and best practice terms and conditions for subcontractors.
- The appointment of an independent Industry Advocate to provide support for businesses to access Commonwealth contracts, to provide advice to government agencies, and to evaluate and monitor the economic benefit associated with government procurement.
- The publication of comprehensive guidelines to inform officials’ application of the rules in a consistent, transparent and equitable manner.
The ANAO has found that the ARTC must be better prepared when spending the $8.4bn.
An urgent focus on the deteriorating health and well-being of South Australians is needed.
Antiquated government procurement is still impending innovative digital transformation.
The procurement practices that lead to successful integration.
The Commonwealth has appointed three service providers to manage its property portfolio.
Lake Macquarie City Council is moving to a new consolidated tender to maintain its facilities.
Everyone’s talking about smart cities. Local councils are in the enviable position to make them a reality.
The Federal Government has announced a number of initiatives to encourage Social Impact Investing.
One of the contenders for a $5bn defence contract has undertaken to base itself in Qld.
More action needed to protect vital infrastructure corridors.
The Joint Select Committee on Government Procurement has released its recommendations for improving how the government spends its money.
Scheme could fail if rushed.