Govt e-procurement could die for lack of customers

The consortium that wins the government's e-procurement trial still might not get any long-term work out of a subsequent contract after the six-month pilot exercise.

The consortium that wins the government’s e-procurement trial still might not get any long-term work out of a subsequent contract after the six-month pilot exercise.

If enough government agencies decide not to adopt e-procurement in the short term, the longer-term implementation of e-procurement in government may be canned or postponed.

The request for proposal (RFP) for the pilot project says implementation of a full e-procurement depends not only on the pilot system meeting operational and business objectives, but also on “sufficient [government] agencies deciding to use the system to make it economically viable”.

The decision whether to proceed or not will be in the hands of the State Services Commission.

The e-government unit’s e-procurement specialist, Greg Nicholls, declines to comment about the degree of risk that insufficient agencies would sign up to the chosen system to make it worthwhile. The statement in the RFP fits in with the government’s long-established attitude of independence for agencies in management decisions and public accountability, he says. “There is no signal that agencies will be told to use the system.”

He declines to discuss prospective bidders for the RFP, even as far as saying how many are expressing serious interest. “We are constrained from commenting by the need to maintain the integrity of the RFP process,” he says.

Bidders shaping up include an Oracle-led consortium, a consortium of SolNet and EDS, one led by e://volution and including Metiom and the WestpacTrust Bank, OneZone and the Gconnect consortium including SupplyNet, KPMG, SAP, Microsoft and Compaq.

Bidders and other industry sources say the project is a huge opportunity, not only in terms of the direct work for the government, but in terms of the project’s role in “supplier enablement”. If suppliers to the government are required to interface with an electronic procurement system, a good deal of peripheral business will be generated in upgrading their systems to provide such a capability. Other buyer companies could in turn be led into e-procurement.

Some, however, see a downside to this spread, in that it could favour one particular kind of e-procurement solution and hence shut out other potential providers from the small New Zealand market.

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Tags e-procurement

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