Smaller suppliers and local companies should get a better crack at government ICT contracts under a new policy initiative.
The government is close to finalising a new policy on ICT procurement that will be fairer both to smaller suppliers and New Zealand-owned companies, says ICT Minister David Cunliffe. The policy is likely to include a requirement to justify any rejection of a New Zealand company when it comes to major projects.
Smaller and local firms have long complained that they are effectively discriminated against because request-for-proposal and tendering procedures are both complex and costly. There is also a tendency for government agencies to go for the supposedly safe option — a big overseas supplier.
Variability of ICT procurement processes between agencies is another source of complaint from local suppliers trying to get a foothold in the lucrative government market, says Cunliffe.
The minister revealed elements of the developing policy in his opening address to the second annual IDC Government Insights conference, held in Wellington on August 16 and 17.
The Ministry of Economic Development (MED) is leading a new strategic approach to government procurement policy, and the improvement of current practice across government, says Cunliffe.
“Cabinet has agreed that departments be required to ensure that their internal documentation of tender short-listing and contract-award decisions for contracts at or above $100,000 includes justification for the rejection of any New Zealand tender,” Cunliffe told the conference.
Cabinet has also asked the MED to investigate greater use of “pre-qualification” of suppliers, meaning a company would have to outline its areas of strength and special expertise to government once only, and would then be noted as a competent supplier in those areas. It would not then have to repeat the same information for each response to a government request. This will “reduce the burden of information in tendering”, says Cunliffe.
Cabinet has also suggested that tendering information requirements could be “more tailored to different levels of contract value”, so a supplier is not overburdened with supply of information for a small contract.
Variable tendering practices between government agencies are another cause of complaint.
“The ministry’s Government Procurement Development Group is taking action to address the issues of alignment between departments and, in particular, is seeking to streamline and standardise, where possible, departmental procurement-practice manuals and templates, and make these publicly available on the MED procurement website,” says Cunliffe.
“Cabinet has agreed in principle that a single procurement policy be extended to agencies beyond the core public sector,” he says.