EDS: Govt e-buying project too small

The decision on the winning candidate in the long-running government e-procurement selection process appears to have been Hobson's choice in the end.

The decision on the winning candidate in the long-running government e-procurement selection process appears to have been Hobson’s choice in the end. The last opposition to the victorious consortium, led by Cap Gemini Ernst & Young, backed out, apparently because the project looked like being too small.

The other last-round contender was a consortium consisting of EDS, SolNet and Deloitte Consulting. These two consortia had a similar make-up to the two that won a Department of Work and Income (Winz) e-procurement trial last year.

The EDS-SolNet consortium withdrew from the contest last month because of “reductions in the scope of the project”, says EDS managing director Bob Gray, on behalf of the consortium. The decision was made “for commercial reasons”, he says, declining to elaborate further.

The current project is still officially a six-month pilot. This is to be conducted between April and September 2002 with five government agencies: Treasury, Winz, Inland Revenue, the Ministry of Fisheries and the NZ Fire Service.

“If the pilot is successful the system will be made available from October 2002 for use by government departments, Crown entities, including health and tertiary education entities and local authorities”, says the press statement announcing the decision.

Greg Nicholls, in charge of the project for the State Services Commission’s e-government unit, says there was no late change in functionality in the project but rather a reduction in the expected volume of business.

“In discussions with the two shortlisted bidders in November [last year] forecast transaction volumes were reduced somewhat over those outlined in the proposal,” Nicholls says in an email. “The [initial request for proposal] required bidders to quote for price steps which reflected different volumes. Both [last-round] bidders undertook negotiations with the project through to mid-February on the basis of the revised forecast volumes”, but then the EDS/SolNet/Deloitte consortium backed out.

The September 2001 proposals request had flagged the possibility of a low volume of interest, and indicated that, following the trial system, the project might not proceed long-term if insufficient government agencies were interested in e-procurement.

Asked whether the “reduced scope” comment referred solely to reduced transaction volume, and if so why it made further participation inadvisable, Gray declined to amplify his remarks. SolNet was approached with the same questions, but had not replied by press time.

The choice of an e-procurement service to fit into the development of e-government has been a long-drawn-out affair. In late 2000, the Work and Income (Winz or DWI at various times in the project’s history) was chosen for a trial implementation. It made its own choice of partners, consortia including substantially the same members that this year reached the last round in the “all of government” exercise. Some surprise was expressed at the time that then world leaders in e-procurement, such as Ariba and Commerce One, were not selected.

The later all-of-government project (see E-govt unit gets e-procurement pilot) was promoted as entirely separate from the DWI project, though the latter would gain some lessons from the former, e-government unit head Brendan Boyle said at the time. Representatives of the e-government unit repeatedly denied that the winners of the DWI trial would necessarily have an advantage in selection for the wider project.

There were more than 40 originally interested parties, but seven consortia put in serious bids in October last year, says Nicholls. Later in October “two bids were shortlisted following careful review of the bids by an evaluation team made up of 15 people from nine government agencies.

The Cap Gemini Ernst & Young bid selection is only a provisional endorsement at this stage. “We are now negotiating a contract with Cap Gemini Ernst & Young to provide e-procurement services to government agencies,” Nicholls says.

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More about AribaCommerce OneDeloitte ConsultingDeloitte ConsultingDeloitte ConsultingEDS AustraliaInland RevenueSolnetState Services Commission

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