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                    [post_content] => [caption id="attachment_28293" align="alignnone" width="300"] Muru CEO Mitchell Ross[/caption]

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 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
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                    [post_date] => 2017-10-02 22:38:38
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                    [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
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                    [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
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                    [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.
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                    [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.

 	
 Implementation first

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.

 	
 End to end ownership

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.

 	
 The skill set

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.

 	
 Operationally centric

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.

 	
 Don’t just test the software, test the integrations too 

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.

 	
 Work in partnership

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.

 	
 Contract transparency

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.

 	
 Own the onboarding 

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.

 	
 RFP

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

Many organisations have multiple procurement teams. Australian banks and some government departments, for example, often have a security procurement team who review the security aspects of the platform and contract. Procurement teams must be aware of the compliance regulations, specifically when it comes to sensitive information. Being an informed consumer is key to success here; things to consider when developing your checklist are:

 	
Where is the data stored?
 	
What level of data security standards have you reached?
 	
What level of encryption do you hold your data to?
 	
 Support

How will the platform be supported? How will the team be supported? Where is the support service located? Is this inclusive to the contract value or at an additional cost? Support can be very difficult to measure, so it is an extremely variable cost unless it is inclusive.

 	
 Team location

The beauty of a SaaS is that you are not bound by the location of a team of people – until you want specialised support or a professional services team to implement your projects for you. If there is any possibility this will be the case with your organisation, then it is important you know where the team will be located, how responsive they can be, and if they have the resources to dedicate time to you during the implementation process.

Not surprisingly, it is the big consultancies, insurance companies, banks, technology companies and leading associations that are doing these things best. However, with accessible technology there is plenty of opportunity for government agencies and organisations to join the best-practice leaders for SaaS procurement. In a world of increasing scrutiny around data security and compliance, efficiency, and the importance of emotional intelligence, there is exciting scope for procurement professionals to step into this void and powerfully impact the return on investment which a well planned and executed SaaS procurement affords.

Alan Ivory is the vice president- global professional services for event management SaaS provider etouches. 
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                    [post_content] => [caption id="attachment_28053" align="alignnone" width="300"] Cameron Offices on the corner of College Street and Chandler Way, Belconnen, ACT. Source: Wikipedia user Adz.[/caption]

With the aim of driving greater efficiency in the management of the Commonwealth’s property portfolio, three property service providers have been appointed.

The providers are Broadspectrum Property Pty Ltd (Broadspectrum), Evolve FM Pty Ltd (Evolve FM), and Jones Lang LaSalle (ACT) Pty Ltd (JLL). They will provide leasing and facilities management services to over 90 Commonwealth entities.

These appointments are part of the Government’s plan to realise further savings in excess of $100 million in property-related expenditure over the four years of the contracts, including through consolidating the Commonwealth’s buying power.

The new property service provider arrangements complement other efficiency measures already in place, including Operation Tetris (see below), which had a goal of realising savings of $300 million over 10 years through reductions in surplus leased property holdings.

The appointment of the providers followed an open tender process and represents strong outcomes for Indigenous business and small to medium enterprises (SME). Each Property Service Provider has committed to exceed the Indigenous Procurement Policy targets of 3 per cent for levels of Indigenous employment and/or engagement of downstream contractors. The Property Service Providers are also required to meet or exceed the Government’s SME targets of 10 per cent of downstream contract value.

Broadspectrum and JLL are large, established global providers. Evolve FM is an Australian-based, Indigenous-owned company.

The appointments are for an initial term until 30 June 2021, with possible extensions of up to a further four years.

Operation Tetris squeezes more in

The Department of Finance’s property efficiency program consists of:

 	
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.

In support of Operation Tetris, the government established a ‘Whole-of-Australian-Government’ coordinated procurement system for property-related services. This arrangement covers leasing services and property and facilities management for domestic office accommodation and shopfronts.

The coordinated approach for property-related services is designed to improve the efficiency of property services across the Commonwealth and maximise the value for money that can be achieved by consolidating the Commonwealth’s purchasing power.

All non-corporate commonwealth entities (NCCE) will be required to commence using the arrangements for their outsourced property needs once their existing contracts expire. NCCE will, however, be able to enter into new contracts, including any extensions or expansions to existing property-related arrangements (excluding leases), as long as those contracts expire before 30 June 2018. Lease arrangements will remain subject to Resource Management Guide 504 (RMG 504) in respect of endorsement by the Minister for Finance.

Since the national roll-out, the government claims Operation Tetris has successfully filled over 60,000 square metres of vacant and surplus office space in the ACT and a further 7,000 square metres in other capital cities, including:

 	
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.

 
                    [post_title] => Govt outsources office management
                    [post_excerpt] => The Commonwealth has appointed three service providers to manage its property portfolio.
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                    [post_date] => 2017-09-15 10:58:57
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                    [post_content] => 

Lake Macquarie City Council is moving to a new consolidated tender to maintain its facilities, which will streamline and improve the process while promising to give service providers clearer guidelines and increased contract security.

The council owns and manages about 400 buildings, facilities and natural assets, many of which are cleaned, maintained, and in some cases operated, by commercial contractors. The services provided include electrical and other trades, building maintenance, minor construction, data cabling, vegetation and pest management, waste management, cleaning and other specialist services.

Under the new system, opportunities to provide these services will be advertised under a single tender, Facilities Management Services (T1009), comprising 52 separate services within eight Service Supply Panels. Providers will be able to register online through Tenderlink to submit a tender.

“Council has a diverse range of contractors, and opportunities will continue to exist for suitably qualified and experienced service providers at all levels, from sole traders to large companies,” works coordinator Daron Kerr said.

“Service providers will be able to tender for one, multiple or all services, and some services may be awarded to more than a single tenderer.

“Lake Macquarie City Council is committed to supporting business across our City and region, and we encourage local businesses to consider participating in this tender process.”

Successful tenderers will be awarded contracts of three years, with two one-year options. This will offer the council’s service providers greater security and assist with their business planning.

The centralised tender will bring consistency to the council’s arrangements with contractors and improve safety, compliance and efficiency through the introduction of a performance management system.

All services currently provided by commercial suppliers will be included within the new tender. Services provided by council staff will continue to be delivered within the organisation.

 
                    [post_title] => LMCC introduces consolidated tender
                    [post_excerpt] => Lake Macquarie City Council is moving to a new consolidated tender to maintain its facilities.
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                    [post_content] => [caption id="attachment_27905" align="alignnone" width="300"] Artist's impression of Sydney Metro Waterloo station.[/caption]

 

Alok Patel

Everyone’s talking about smart cities. Local councils are in the enviable position to make them a reality.

Local government is the level of administration closest to the people, and councils are best placed to know what technologies are going to improve the lives of their constituents. In addition, local government areas can be mobilised far more quickly than they can be through the federal or state government to facilitate change.

Now, here’s the rub. Councils are also among the worst to pitch to. They are mired in complex bureaucracy and often have outdated procurement processes that are no longer fit for purpose.

We recently held a series of roundtables to examine the challenges and opportunities that smart cities present. Participants included experts in start-ups, communications, business, construction and local government.

These experts, who were able to offer different perspectives on dealing with all levels of government, named local councils as the great hope of smart cities innovation. But they also pointed to reforms that are needed to realise them.

To begin with procurement, current processes favour project delivery by big corporates (purely due to their financial ability to weather the cost of onerous government compliance and processes), typically resulting in a less innovative approach. Visionary start-ups may not even reach tender stage after being dissuaded by the abovementioned onerous procurement compliance burden.

Dump the thin, bureaucratic straw

In addition to this bottleneck, cutting-edge technology is not being deployed because there is still a central planning mentality rather than an iterative start-up mentality that could more effectively deliver solutions.

Local council hierarchy and procurement processes can slow or even stymie progress. As one participant said, “the current council structure is one CEO, five departments and 2,000 staff, using procurement processes that go back 40 to 50 years”.

While there is investment being made by the private sector in speculative technology,  there is little hope of any of this cash making it through what ends up being a very thin bureaucratic straw.

The way forward is for councils to partner with private enterprise to develop cheap, small, proof-of-concept innovations that can be quickly altered or dumped with little cost in much the same way that John Maxwell recommends that you “fail fast, but forward” – or learn from your mistakes and use what you’ve learned in your next cunning plan.

In this way the private sector can take the risk – meaning the lion’s share of the expense – while councils reap the benefits and no small kudos for improving the lives of their residents; and, importantly, saving them time and money.

Councils already showing the way

One way government could move more quickly would be to embrace the iterative approach discussed above, where technology is proven on a small scale, then picked up in other areas. This type of approach in turn lends itself to creative financing options: investments are no longer so massive that only large corporations can propose a solution.

Instead, smaller players can bid for projects using models that break investments into funding parcels over a 12 to 24-month period, with returns coming within five years.

Already, there are self-contained precincts already being built in New York City, The Hudson Yards, and Yeerongpilly Green in Brisbane, and on a smaller scale, the green space of the Finery in Waterloo, Sydney.

None of these projects would have been possible without the blessing of far-sighted local council pioneers. All are built on top of or near railway stations - the new Waterloo Metro station for Sydney’s Finery and New York City Hall extending the 7-line train in Manhattan to service The Yards.

These are just some examples of how the private sector is teaming up with local governments to create a prototype smart precinct for citizens – or in the case of The Yards, a city within a city with its own microgrid – with green spaces, pools or water features, and high levels of walkability.

While the private sector is coming to the party and acknowledging the way forward to smart cities, it is up to government give a ‘big-picture’ commitment to ensuring quality of life and happiness of its citizens.

Roundtable participants were also excited by the opportunity for smart cities to go beyond social cohesion and improve citizens’ connectedness to the government.

Improving people’s lives today

This call for a vision for the smart city and a commitment to the happiness of the people is a crucial element to come from our roundtables.

This is achievable now. While we should not be daunted by undertaking tasks that will take years to complete, what matters is wellbeing, now. And the financing options outlined above show the way forward.

With the technology we have available, Australia has the ability and the opportunity to build smart cities and improve people’s lives today.

Our goal must be an improved urban space where people can be their best as they live, work, trade and play in comfort and safety.

The avantgarde councils that will pave the way will reap rewards beyond savings, awards, recognition, swank and the glory of seeing scaled-up versions of their advances implemented around the world.

They will improve the lives of their citizens.

Alok Patel is the CEO of Azcende, a venture capital firm in the smart cities space. He is also the author of Habitats for Humans, a white paper that came out of a recent series of roundtables held in Sydney and Melbourne, which is available to download here.

 
                    [post_title] => Local councils can be the vanguards of smart city reform
                    [post_excerpt] => Everyone’s talking about smart cities. Local councils are in the enviable position to make them a reality.
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                    [post_content] => The Federal Government announced in the 2017-18 Budget context a number of initiatives to encourage the continued development of the SII market in Australia, including funding of $30 million.

By pure coincidence, the Government also gifted $30m to Foxtel. The difference between this and Foxtel’s $30m is that Foxtel will get it over two years, while SII will have to wait ten years - Ed.

The government’s package includes funding of $30 million over ten years, the release of a set of principles to guide the Australian government’s involvement in the SII market, and notes that the government will continue to separately consider ways to reduce regulatory barriers inhibiting the growth of the SII market.

Social Impact Investing, the government says, is an emerging, outcomes‑based approach that brings together governments, service providers, investors and communities to tackle a range of policy (social and environmental) issues. It provides governments with an alternative mechanism to address social and environmental issues whilst also leveraging government and private sector capital, building a stronger culture of robust evaluation and evidenced-based decision making, and creating a heightened focus on outcomes.

It is important to note that social impact investing is not suitable for funding every type of Australian government outcome. Rather, it provides an alternative opportunity to address problems where existing policy interventions and service delivery are not achieving the desired outcomes. Determining whether these opportunities exist is a key step in deciding whether social impact investing might be suitable for delivering better outcomes for the government and community. Government agencies involved in social impact investments should also ensure they have the capability (e.g. contract and relationship management skills, and access to data and analytic capability) to manage that investment.

The principles

The principles (available in full here) acknowledge that social impact investing can take many forms, including but not limited to, Payment by Results contracts, outcomes-focused grants, and debt and equity financing.

The principles reflect the role of the Australian Government as an enabler and developer of this nascent market. They acknowledge that as a new approach, adjustments may be needed. They also acknowledge and encourage the continued involvement of the community and private sector in developing this market, with the aim of ensuring that the market can become sustainable into the future.

Finally, the principles are not limited by geographical or sectoral boundaries. They can be considered in any circumstance where the Australian Government seeks to increase and leverage stakeholder interest in achieving improved social and environmental outcomes (where those outcomes can be financial, but are also non‑financial).

Accordingly, where the Australian Government is involved in social impact investments, it should take into account the following principles:

 	
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.
 	
Co-design.

[caption id="attachment_27829" align="alignnone" width="216"] The Australian Government's six principles for social impact investing.[/caption]

 
                    [post_title] => Social Impact Investing to get $30m
                    [post_excerpt] => The Federal Government has announced a number of initiatives to encourage Social Impact Investing.
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                    [post_content] => [caption id="attachment_27636" align="alignnone" width="300"] The Rheinmetall Boxer CRV.[/caption]

One of the contenders for a looming $5 billion defence contract will base itself in Queensland if it is successful, Queensland Premier Annastacia Palaszczuk has announced.

Rheinmetall Defence Australia would establish its Australia-New Zealand headquarters and a manufacturing and vehicle maintenance facility in South East Queensland if it wins the upcoming LAND 400 Phase 2 contract to supply Australia’s new armoured vehicles, potentially generating 450 long-term jobs and contributing more than $1 billion to the state’s economy over the next 10 years.

Currently the largest supplier of military vehicles to the Australian Defence Force, Rheinmetall will establish the MILVEHCOE as a sovereign industrial capability for the continuous design, manufacture, export and support for military vehicles, turrets and tactical systems. The MILVEHCOE will also draw on a supply network across Australia to deliver products and services from local industry into Rheinmetall’s global supply chain.

Rheinmetall is delivering more than 2,500 logistics trucks to the Australian Army under the LAND 121 Phase 3B program and is currently bidding for the supply of the armoured combat reconnaissance vehicle under the Commonwealth of Australia’s Land 400 Phase 2 program.

Rheinmetall Defence Australia has selected Queensland as its preferred location to build the ‘military vehicle centre of excellence’ (MILVEHCOE) if it wins the contract to deliver 225 combat reconnaissance vehicles for the Australian Army. 

Around 100 of these vehicles are expected to be located at the Townsville and Enoggera bases.

Defence industries employ approximately 6,500 people across the state and generate more than $4.2 billion in annual revenue.

Most of the new jobs would be expected to be highly skilled, highly paid advanced manufacturing and engineering jobs.

Under the LAND 400 Phase 2 contract, Rheinmetall would need to have its facility completed by mid-2020 to supply the first Boxer CRV by 2022.

Rheinmetall is one of two companies vying for the Department of Defence’s Land 400 Phase 2 contract, which is expected to be announced in the first quarter of next year. The other company is BAE Systems Australia, which has yet to announce where it would manufacture its vehicles if it were to win the Land 400 contract.

An existing network of Queensland-based companies supports many of Rheinmetall’s current projects in Australia and overseas, including Nioa, Penske, Holmwood Highgate, Hilton, Harris Communications, Haulmark, ELBIT and LaserDyne Technologies.

Supashock: from partnership to purchase

In the lead-up to the LAND 400 Phase 2 contract decision, Rheinmetall has purchased one of its suppliers, South Australia-based Supashock.

Supashock creates active suspension for motorsport and automotive applications to improve performance, safety and ride quality. Rheinmetall MAN Military Vehicles (RMMV) provided funding to Supashock in May 2017 to develop an integrated active suspension system and intelligent load handling system for the Australian and international markets that will substantially increase the capability and safety of RMMV’s military trucks in demanding on and off-road environments.

Through comparative testing, Supashock’s suspension technology has been shown to substantially improve the mobility of Rheinmetall MAN Military Vehicles (RMMV) trucks, while at the same time enhancing on-road safety and reducing the shock and vibration experienced by the load the truck is carrying.

 
                    [post_title] => Queensland in line for billion-dollar defence contract
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                    [post_content] => [caption id="attachment_27577" align="alignnone" width="300"] The WestConnex project has not been immune to land preservation issues.[/caption]

Infrastructure Australia has launched a new policy paper urging Australian governments to act to protect vital infrastructure corridors and avoid cost overruns, delays and community disruption when delivering new infrastructure.

The third paper released as part of Infrastructure Australia’s Reform Series, Corridor Protection: Planning and investing for the long term shows that protection and early acquisition of just seven corridors identified as national priorities on the Infrastructure Priority List could save Australian taxpayers close to $11 billion in land purchase and construction costs.

These corridors are: East Coast High Speed Rail, Outer Sydney Orbital, Outer Melbourne Ring, Western Sydney Airport Rail Line, Western Sydney Freight Line, Hunter Valley Freight Line, and Port of Brisbane Freight Line. 

“Meeting Australia’s future growth challenges requires long-term vision. As our cities and regions undergo a period of considerable change, strategically important infrastructure corridors need to be preserved early in their planning to avoid cost overruns, delays and community disruption during the project delivery phase,” said Infrastructure Australia chairman Mark Birrell.

“Australia’s governments have an immediate opportunity to deliver an enduring infrastructure legacy to future generations.

“If we protect infrastructure corridors we will reduce project costs and especially minimise the need for underground tunnelling, where the cost to government and therefore taxpayers can be up to ten times higher than it would have been,” he said.

Protecting seven of the corridors identified on the recently revised Infrastructure Priority List could save close to $11 billion. This is the equivalent of more than two years’ spending by the Australian Government on land transport such as major roads, railways and local roads.

“State and territory governments historically have shown leadership in protecting infrastructure corridors, but more needs to be done now. Experience clearly shows that planning the right infrastructure early, timing delivery to meet demand and ensuring it is fit for purpose enhances economic opportunity and delivers the best community outcomes,” Mr Birrell said.

He quoted the M4, M5 and M7 motorways in Sydney, the M1 and EastLink motorways in Melbourne and the rail line to Mandurah south of Perth as examples where the protection of infrastructure corridors allowed the construction of vital links.

Mr Birrell said the most urgent priority for protection is the east coast high-speed rail corridor, as this critical corridor faces immediate pressure due to its proximity to major population centres.

He highlighted the cost of tunnelling in comparison to the cost of land acquisition, pointing out that recent tunnelled motorway proposals are expected to cost in the order of $100 million per lane kilometre to build.

The Australian Logistics Council (ALC) has supported the policy paper from Infrastructure Australia (IA), saying it demonstrates the importance of corridor protection in preventing cost blowouts, project delays and community disruption on infrastructure projects.

“ALC has consistently worked to highlight the necessity of corridor preservation as part of a consistent and coherent approach to developing Australia’s national freight infrastructure,” said ALC managing director, Michael Kilgariff.

“Good planning leads to good infrastructure outcomes for the community. Preserving corridors to accommodate the infrastructure needed to meet our future freight task lies at the heart of responsible planning policy.”
                    [post_title] => Don’t sell the land
                    [post_excerpt] => More action needed to protect vital infrastructure corridors.
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                    [post_content] => 

The Joint Select Committee on Government Procurement has released its final report into the Australian Government’s procurement rules, including a range of recommendations for improving the rules on how the government spends its money.

The committee’s recommendations include:

 	
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.

Committee chairman Senator Nick Xenophon believes the new procurement rules, to be introduced in March, have the potential to deliver significant benefit to the Australian economy by providing important support to Australian industry.

“Implemented effectively, the new rules will enable a broader, more accurate consideration of value-for-money in procurement decision making,” Senator Xenophon said.

“However, their impact will be dampened unless the Australian Government acts swiftly to address the implementation concerns identified in this report.

“A national Industry Advocate, cast on the highly successfully South Australian model, is urgently needed to overcome a current procurement culture focused on lowest cost rather than value for money, lacking in transparency and unaware of the benefits of engaging Australian businesses.”

Last financial year more than $56.9 billion was spent by the Australian Government on the goods and services required to deliver its policy objectives. More than 10,000 businesses were contracted to deliver these items, including 9,595 small to medium businesses.

The Joint Select Committee on Government Procurement was formed to investigate the implementation of the new Commonwealth Procurement Rules, which came into effect on 1 March 2017. The Committee considered how the implementation of the new rules could be strengthened to increase the economic benefit procurement delivers to the Australian economy.

For more information about the Committee and to view its final report, visit the Committee’s website.

 
                    [post_title] => Government procurement rules to change
                    [post_excerpt] => The Joint Select Committee on Government Procurement has released its recommendations for improving how the government spends its money.
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A group of Australia’s largest waste management companies are calling for the NSW container deposit scheme (CDS) to be delayed seven months so it can start on the same day as the Queensland CDS on July 1, 2018.

The National Waste and Recycling Industry Council (NWRIC), whose five foundation members are Veolia, JJ Richards, Cleanaway, Remondis and Suez, last week voted to lobby the NSW government to delay the NSW scheme.

The NWRIC says the proposed state-wide network of more than 450 collection points that the government has asked network operators to set up is incomplete. The network could face further delays as some collection points need development applications and work on safety and traffic management.

The industry group argues that the scheme is not yet ready to be rolled out as scheduled by the NSW government on December 1 and says that pushing ahead with it this year could end in tears.

NWRIC CEO Max Spedding said there were several issues yet to be properly thrashed out and the rules around the scheme had been released only six months ago.

“The industry feels that the scheme is under done and a bit rushed. We’re concerned that there are still these unknowns that would like to see resolved earlier rather than later,” Mr Spedding said.

The issues included: awarding tenders; negotiations between local councils and industry about the ownership of deposit containers; achieving clarity around payment for containers (especially because of new regulations specifying that scrap steel trading must be cashless) and a final decision on which containers are eligible for refunds.

“The scheme may commence with sub-standard collection infrastructure and poorly implemented systems. Fraud may occur. This could undermine public confidence in this scheme and the industry more broadly,” he warned.

He said operators could pull out if the CDS did not work for them, especially if there was a lack of collection points that made the scheme unviable.

Another concern is that by starting the NSW container deposit scheme earlier than Queensland containers are stockpiled or transported across the border to NSW.

“This is always a risk where there are cross-jurisdictional market distortions,” Mr Spedding said. “It is industry’s experience that where money can be made by transporting waste, businesses are set up. More than half a million tonnes currently moves between NSW and Queensland to avoid levies.”

NWRIC Chairman Phil Richards said regulators were already working to harmonise the rules of both the NSW and Queensland container deposit schemes, so it seemed natural to harmonise their start dates.

“By delaying the start date of the NSW CDS by only seven months - to July 1, 2018 - both NSW and Queensland can prevent cross border transport of beverage containers and stockpiling issues,” Mr Richards said.

“CDS programs are complex, so it is also important that adequate time is given to network operators to establish collection and administration systems. These systems are needed to reduce disruption and deliver a high quality service to the public.”  

But Mr Spedding said the NSW Environmental Protection Authority was adamant that the scheme would start by December at a meeting last week with major players, operators and processors, despite their protestations.

Boomerang Alliance Jeff Angel shares Mr Spedding’s concerns and agrees the scheme is unlikely to be postponed.

“There has already been one extension and it looks extremely unlikely will be granted,” he said.

“There will always be problems with any start date and while NSW has left a relatively short period for the roll-out of the infrastructure [collection points and depots] I think all the stakeholders have to work as fast and as constructively as possible.”

Mr Angel said the Alliance still had concerns over whether there would be enough collection points and depots to ensure it was convenient for people to take part in the scheme.

Under the NSW CDS people can hand in most empty drink containers of between 150 millilitres to 3 litres and receive a 10c refund at a collection depot or reverse vending machine. Exceptions include milk and flavoured milk containers, casks, juice containers and glass containers for wines and spirits.
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                    [post_content] => 

 

A senior public official from Victoria’s Metropolitan Fire and Emergency Services Board (MFB) executed an elaborate deception to employ her two sons by encouraging them to change their names and falsify their CVs.

The Victorian Ombudsman Deborah Glass’ report into the scam, released today [Monday], uncovered a case of naked nepotism within the metropolitan Melbourne fire service that she said had cost the public more than $400,000 over a number of years.    

The MFB’s Chief Information Officer, Mary Powderly-Hughes, hid her relationship to her son, David Hewson, when she hired him in July 2014.

She employed her other son, Barry Robinson, two years’ later to backfill Mr Hewson’s position after she handing him a permanent role as the Manager of IT Administration, Finance, Procurement and Projects.

Leaving nothing to chance, Ms Powderly-Hughes typed her sons CVs, faked their employment history and told them the interview questions beforehand. She also pretended to carry out reference checks after interviewing them.

To make doubly sure her second son got over the line for a procurement manager role, Mrs Powderly-Hughes ‘interviewed’ Mr Robinson at her home and drilled him in IT finance packages, despite him being woefully underqualified for the role and ordinarily working as a motor mechanic.

The three were sprung after a whistleblower reported their concerns to the Ombudsman.

“I have my suspicions that Mary Powderly Hughes has hired her son, or family member, or someone with a very close connection and I think she’s manipulated things to make sure he got the job when it became permanent. When he was a contractor he quickly got a rate rise, which is quite rare for most people,” the manager told Ms Glass.

The Ombudsman investigated the tangled web the trio had weaved using social media and official records.

Officers matched Mr Hewson’s mobile phone number listed on his MFB emails with his role as Treasurer of the local cricket club. They then matched his personal email address with a Facebook account for a Mr Hughes, which revealed the suburb he lived in, the same as the cricket club. The Victorian Electoral roll listed a David Patrick Powderly-Hughes in the same suburb.

Mr Hughes Facebook account also showed he had previously worked for Parks Victoria, which Mrs Powderly Hughes had also listed in her past jobs on her LinkedIn account.

A search of the Victorian Registry of Births, Deaths and Marriages showed that the men were her sons and had both changed their names a few weeks’ before starting work at MFB.

Ms Glass said the case was an egregious example of self-interest.

“Some cases I have investigated over the years seem so unlikely you could not make them up. Except, as in this case, they did,” Ms Glass said.

“The facts of the case are that a senior public official at the Metropolitan Fire Brigade hired her son, not declaring the relationship, having falsified his CV and coached him prior to interview, three weeks after he changed his name to conceal the relationship. 

“After giving him a pay rise and moving him into a permanent role, she then hired her second son, also falsifying his CV and “interviewing” him at her home after he, too, had changed his name to conceal the relationship,” said Victorian Ombudsman Deborah Glass. 

Ms Glass said she had rarely come across such blatant and calculated behaviour.

“Often the cases are minor, although wrong. Not this time, this was a case of deception where the family nest was feathered, plain and simple.” 

Unsurprisingly, all three have left MFB since the investigation blew up. Ms Powderly-Hughes resigned on the day of her interview with the Ombudsman and both of her sons have since been sacked.

Ms Glass said cases were often difficult to detect and she underlined the importance of colleagues raising the alarm if they saw anything suspicious going on at work.

“The case also serves as a salient reminder of the importance of disclosers acting on suspicion that something is awry in their workplace. More often than not, as the saying goes, where there is smoke, there is fire.”

She said that while the agency could not be held responsible for the deception perpetrated upon it in this case it needed to beef up its conflict of interest policies.
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            [post_content] => [caption id="attachment_28293" align="alignnone" width="300"] Muru CEO Mitchell Ross[/caption]

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 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.”

 
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Procurement

‘Buy local’ purchasing plan backfires

By Graeme Philipson on October 16, 2017 in Federal, Finance, Procurement

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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Don’t sell the land

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NSW and QLD container deposit schemes should both start in 2018, says waste industry

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Scheme could fail if rushed.

Senior public official secretly employs sons after name changes and doctored CVs

By Marie Sansom on June 19, 2017 in Crime, ICT, Jobs, Law, Procurement, Sector, State

Pretend reference checks and pay rises for the family.