Major IRD project: Locals need not apply?

IRD transformation project may be pitched at a level that excludes New Zealand providers

A major project to plan “transformation” of the Inland Revenue Department’s business processes and ICT infrastructure has been pitched at a level that seems to effectively exclude New Zealand providers.

IRD’s request for “transformation programme planning services” first surfaced as a request for expression of interest (RoI) in September. It has since progressed to a request for proposal directed at a shortlist of a few bidders and IRD is “close to a decision”, says Ron Grindle, acting deputy commissioner, business transformation.

He declines to give any details of the shortlist, or even say how many are on it, “due to commercial confidentiality”. The RoI anticipated a shortlist of between three and five.

The RoI document also imposed strict qualifications on providers allowed to bid for the project:

“The supplier must have planned and managed transformational change in a public sector organisation where there were greater than 4000 employees affected; the duration of the programme was greater than four years; the ICT fixed assets book value was greater than US$200 million and the change programme was for an entity within an OECD jurisdiction,” is just the first of nine conditions.

IRD says it will only entertain bids from suppliers that have “managed transformational change programmes in a minimum of two OECD national jurisdictions” and that the bidder “must have managed successfully a minimum of three transformation change programmes in the last five years”.

But local ICT lobby NZRise says government agencies should give more attention to increasing the chance of the business staying in this country and building the kind of expertise the IRD and other government agencies habitually seek – or alternatively make agencies justify tender conditions that seem to exclude local suppliers

While admitting he has inadequate information to comment specifically on the IRD project, NZRise president Don Christie says “there is consensus amongst NZRise members that the government should be careful about creating barriers that prevent local organisations responding to tenders that they may be capable of carrying out or contributing to.”

Taxpayer money should, wherever possible, be spent on local services rather than sourcing services from overseas, he says. “There is a strong economic case to support this position.” A clause in the IRD documentation that particularly attracts Christie’s attention says “the number of consultants employed by the supplier [should exceed] 1000”.

When a condition is included that seems to have little specific relevance to performance, such as the number of employees in an organisation, the size of turnover or the number of projects undertaken, “that should be linked to a specific outcome that the agency is seeking,” he says. “Is the agency looking to utilise that many people?” he asks; “or is it seen as an indication of depth of experience?

“Those sort of hard and fast metrics are a suboptimal way of achieving the actual outcomes desired,” Christie says.

He also suggests government agencies might focus even more closely on their own back yard. “I think it would be fair to say that the NZ government and IRD itself probably already employ a number of people who understand the issues of transforming agencies — we’ve been through quite a few of these transformations in the last 30 years,” he says. “Rather than contracting this job out for five or 10 years one wonders whether internal hiring has been considered and would be more effective use of NZ dollars.”

Asked whether any consideration had been given to dividing up or otherwise modifying the project so local firms would be able to bid, Grindle replies “not at this stage.”

Grindle answers Christie’s point on use of staff from within IRD, saying “Inland Revenue staff are already working on aspects of our transformation approach; however the expertise and knowledge gained from the successful supplier will complement and develop our own expertise in this area.”

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