Moves are afoot to improve the procurement process of government departments once again. And, once again, these are aiming to cut through red tape and reduce the cost of doing business.
Work is “well under way” in establishing a portfolio of standard template documents to cover the bulk of government agency requirements in contracting for ICT work.
“The intent is to shift the emphasis from focusing on the terms and conditions to where the real value lies, which is in the statement of work and project deliverables of any project,” Andy Woodwark, senior analyst at the Ministry of Economic Development told Computerworld last week.
“The existence of multiple contracts, many specific to individual departments, has been recognised as a significant contributor to the overall cost of doing business with government.”
It’s just over one year since the “Mandatory Rules for Procurement by Departments” were introduced. A year earlier, the MED’s policy advice role, the Syndicated Procurement Unit of the State Services Commission, and the Government Electronic Tenders Service (GETS) were consolidated into a single group, the Government Procurement Management Group (GPMG).
It was tasked with leading a new strategic approach to Government procurement policy.
An MED review that led to a Cabinet paper in May identified significant variation in the quality of procurement practices across government departments. Two key issues raised in the Cabinet paper were: an overly risk-averse approach by departments; and a perception that they were focused on price rather than whole-of-life cost.
That risk-averse approach has led to complaints by ICT vendors about the tendering process. Where once a request for information was a limited document, it has now, in many cases, turned into a full-blown response as detailed as a request for proposal.
Government agencies are often seeking detailed pricing at the RFI stage, then using those prices to formulate RFPs for selective tenders. There is a huge cost for vendors in responding in such detail at such an early stage in the process.
Vendors will hope that the introduction of standard templates will address this situation.
Woodwark says GPMG is about to engage in a programme of making all procurement-based information more accessible and focused on the needs of both buyers and suppliers.
“It is recognised that in order to reap the economic benefits of amore consistent and professional approach, the full implementation of government procurement policy still has some way to go,” he says.
IT lawyer Michael Wigley says the real problem is the two-step approach where the traditional RFI has turned into a quasi RFP, including price.
“In the first round, the focus should be on the qualities of the vendor,” he says. “The RFI should be an expression of interest, not an exercise in weeding out.
“The public sector should know its supplier market by the time it comes to issuing an RFP. The problem is that the buyers often don’t know what is out there [in terms of technology], so RFPs are badly drafted. That doesn’t allow vendors to put other offerings forward. That’s quite a significant cause of project failure.”
He says government agencies need to do their research very well in the early stages of a tender process.
“They can and should talk to the industry at a sufficiently early stage in the process. Too often, they don’t.
“The new regulation require a procurement plan. They’re not doing very well so far.”