Govt names suppliers in computer contract

Savings of $35 million expected over five years

[Updated] Five companies have been named in an all-of-government contract worth $260 million to supply computers and laptops to over 200 state sector agencies in the next five years.

Minister for Economic Development Gerry Brownlee announced today that the supply panel consists of Acer, Cyclone, Gen-i (in partnership with Lenovo), HP New Zealand and The Laptop Company (in partnership with Toshiba).

MED director of communications Kate Camp says the contract is estimated to be worth $260 million based on what agencies have said they wish to purchase. The all-of-government (AoG) contract is expected to save government agencies $35 million over the five year period.

Prominent manufacturers absent from the panel include Apple and Dell, but according to NZICT CEO Brett O’Riley, the panel is not final, and the government is still in discussions with other suppliers. O’Riley was a member of the original government procurement reform committee.

O’Riley says that a decision about which companies would be chosen for the supply panel was expected in July, and that today’s announcement is unlikely to be final. “My understanding is that they are still in discussions with some other suppliers,” he told Computerworld.

Camp confirmed that discussions are continuing with another two suppliers.

O’Riley describes today’s announcement as a “landmark” deal and says it will be interesting to see how it is implemented. The contract is an “opt-out”, so that government agencies will be expected to seek new deals with one of the panel of suppliers.

“Agencies will continue with their existing contracts until they expire, at which point Public Service and State Services agencies are expected to transition onto the new contract, and agencies in the wider State sector are encouraged to do so,” says Camp. “Given the savings available, some agencies may consider it worthwhile exiting their existing contracts, if it is feasible for them to do so, in order to transition sooner to the AoG contract.”

As previously reported, agencies will be charged a 1.5 percent fee for all purchases made through the AoG contracts. “This fee will be collected by AoG contract panel suppliers and remitted to MED on a quarterly basis for the sole purpose of funding the overall Procurement Reform programme, which includes over 50 action areas in addition to the development of AoG contracts,” says Camp. “Part of the fee will go towards developing additional AoG contracts, which in turn will deliver further cost and efficiency savings. All savings will be retained by State sector agencies.”

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