Updated: NZ govt to rewrite procurement policy

Ministry of Economic Development seeks feedback on govt procurement policy draft

The Ministry of Economic Development (MED) is asking for feedback on a revised procurement policy, as outlined in a draft document published today.

According to the MED the new policies, which will apply to "procuring services, material, and products for use in government works," are designed to make it easier for businesses to work with government and make contracts more transparent.

Businesses and government agencies have been asked to provide their feedback on the initial draft "strawman" policy.

In the past, the government’s current procurement processes have been criticised for being cumbersome and limiting bids made by local firms.

In a recent Q & A article with Computerworld, ICT minister Amy Adams said the government needed to do more to address these issues.

“That’s a fair point and that’s something we have to deal with across government; to ensure the tendering process isn’t so onerous in itself that it ceases to have relevance to what we’re trying to achieve, and the scale of what we’re trying to achieve,” she said.

Among the proposed principles, as outlined on the business.govt.nz website (see below), phrases such as "Best value for money over whole of life", "Open and effective competition" and "Full and fair opportunity for domestic suppliers" will be replaced by "Plan and manage for great results, Give all suppliers a fair go" and "Get the right supplier."

Update at 4:00pm, NZ Rise responds Donald Christie, co-chairman of IT lobbying group NZRise, says a revision of the current government procurement policy is needed to ensure better economic outcomes for New Zealand’s IT sector, especially in the light of burgeoning budgets for IT upgrades at government agencies such as the Inland Revenue Department. “Government has a major opportunity to stimulate one of New Zealand’s most important sectors, IT. Think about the IRD project that could be costing over a billion dollars,” says Christie.

“If government agencies continue to be hands-off during procurement, and let the market decide, we’ll keep getting mega contracts and send all that economic development overseas.”

Christie says he is sceptical about the revised policy at this point because it lacks clear wording that would maintain a large pool of possible vendors.

“There’s no commitment to ensure a broad dynamic supplier marketplace is sustained,” says Christie.

“We need to ensure that whatever they do doesn’t destroy the market, otherwise we’ll end up with fewer and fewer suppliers, and less and less choice, wasting tax payer money and missing out on innovation.”

Christie says the commitment towards making the procurement process more transparent is a positive step, which the government needs to expand on.

“We need to capture data on what government is spending its money on. At the moment there’s no indication of how much goes overseas, how much stays in New Zealand, how much is spent on SMEs or large corporates,” says Christie.

NZRise is drafting a formal response to the MED, Christie says.

The proposed procurement principles include: "Plan and manage for great results." "Give all suppliers a fair go." "Get the right supplier." "Get the best deal for everyone - including the planet." "Play by the rules." The new principles will replace the existing principles which are: "Best value for money over whole of life." "Open and effective competition." "Full and fair opportunity for domestic suppliers." "Improving business capabilities, including e-commerce capabilities." "Recognition of New Zealand's international trade obligations and interests." "Requiring sustainably produced goods and services, wherever possible, having regards to economic, environmental and social impacts over their life cycle."

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