Govt gets cheap e-procurement

The State Service Commission's e-government unit has had its online procurement needs met for less than half the cost quoted in early bids, and with hardly any reduction in functionality.

The State Service Commission’s e-government unit has had its online procurement needs met for less than half the cost quoted in early bids, and with hardly any reduction in functionality.

The $7.5 million price-tag was, however, in the range the SSC had expected — on the strength of independent advice — at the beginning of the evaluation, says the unit’s e-procurement specialist Greg Nicholls.

The unit has changed its approach to piloting the e-procurement project. Originally it was to set up a six-month in-depth trial with five specific agencies, but there were so many government agencies interested that as many as 40 or 50 may now be involved in a less detailed and slightly shorter pilot. This is scheduled to finish at the end of August.

Assuming a favourable result, the operational system should start at the beginning of October, Nicholls says. The “six-month” pilot mooted under the earlier scheme “would in practice have only taken about five months anyway”, he says, so the period has not been shortened by much.

“We will have a ‘laboratory’ system, where agencies can look at what’s being provided and work through the functionality and how it might be implemented in their organisation,” says Nicholls. This will be “shallower” than the originally intended scheme, “but we thought this approach would be fairer”. It will not cost any less than the originally discussed approach, he says.

The pilot implementation will cost $250,000, with the long-term production implementation scheduled to come in at $7.5 million for five years, he says.

Some bids at the start, Nicholls says, were higher than the $15 million figure quoted by sources to Computerworld last month. Nicholls declines to comment on the suggestion that vendors may have artificially inflated initial bids, but he insists that much of the same functionality will be provided for $7.5 million as was originally suggested for more than $15 million.

Major reductions in scope have been rumoured, but Nicholls, for the most part, denies this. The one area where some trimming was done, he says, was in the “enablement packaging — what the vendor does when an agency comes on board, in terms of help; loading their chart of accounts and training their staff, for example”.

Some sources have suggested that no business process implementation has been allowed for in the long-term project. The unit never intended to provide for business process re-engineering of agencies’ systems, Nicholls says, and this was made clear in the request for proposals, issued last year.

One factor making a relatively shallow trial more feasible is the knowledge that the unit has already picked up from last year’s e-procurement pilot at the Department of Work and Income, he says. The two consortia chosen for that trial involved virtually the same parties as were in the last round of the whole-of-government selection exercise, but this was coincidental, Nicholls says.

EDS, leader of the rival consortium judged the runner-up, referred last month to “reductions in scope” on the project, which had made it impractical for that consortium to proceed. Nicholls denies that there were significant scope reductions. “That may have been what EDS said, but that’s not the way we see it”, he says.

A meeting of selected media with senior staff from successful tenderers Cap Gemini Ernst & Young and Oracle was planned for last Friday.

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