A selective tender for 2000 PCs from the Department of Work and Income was entirely in order says contracts manager Tony Wood, since only five companies were believed capable of supplying the department’s needs.
The narrow focus of the process was criticised in the media. Compaq won the contract.
“Let me make it clear this was a selective tender, not a selective purchase”, as some have called it, Wood says.
Selective purchase is where the contract is concluded with a chosen supplier without any competitive tender at all.
It is only appropriate when a competitive tender is not practical. The PC purchase exercise did involve a competitive tender to five suppliers - Compaq, Unisys, GSB Supplycorp, Wang New Zealand (now Gen-I) and Fujitsu.
“A selective tender is appropriate [under Treasury guidelines] when only a limited number of firms are believed to have the capability to supply. Those five were considered for very specific reasons. They needed to be ‘tier one’ organisations, as defined by Gartner - those have ‘the highest quality and reliability of equipment and services’.”
Secondly, Work and Income sought “a supplier with whom we had an existing relationship”.
The contract was for “PCs and associated services”, which include management services aimed at lowering the total cost of ownership of the PC.
Gartner says the actual cost of the PC is only 14%. Companies invited to bid were “those that showed some competence in dealing to that other 86%”.
Yet IBM, for example, was not included. Supplycorp in its initial round of exploration had invited IBM to come in on its bid, but IBM was not interested, says Wood.
IBM spokesperson Jason Dykes confirms the company had an opportunity to bit but decided not to.
Wood says he is disappointed there was not more reaction in the wake of the awarding of the contract.