After a successful experience with co-operative buying of electricity and gas, district health boards are looking at combined acquisition of telecommunications services. Fixed and mobile phone, pager and data services are included in the proposed deal.
Responses have been forthcoming from “everyone in the business you could possibly think of”, says Geoff Bennett of Energy and Technical Services (ETS), the consultancy running the exercise on behalf of the health boards and private health provider Southern Cross, gathered together as the DHB Information Technology and Telecommunications Buying Group.
ETS set up a combined electricity-buying arrangement on behalf of health providers about two years ago, and followed it with a gas arrangement. “They are just about to go for a renewal of the electricity contract,” Bennett says.
The plan is to set out a clear statement of needs, specifying call volumes and data traffic demand, and naturally to acquire appropriate capacity and services at a lower cost than the DHBs have been able to by buying individually.
Extension of the previous bulk buying arrangements to telecommunications was first suggested about a year ago, under a National government, Bennett says; “so there’s nothing political about it.” At that time, the customers were differently organised bodies, known as Hospital and Health Services (HHSs), but the principle of the arrangement has not changed.
ETS expects contracts to be in place by December 1. The process of getting such an arrangement and together is very complicated, Bennett says, and the fact that it has taken more than a year to date does not in his view represent undue delay.
Chairman of the buying group, Midcentral Health’s Chris Dever, says it is not possible to give an estimate, even approximately, of how much the deal might cost or what it might save boards. The contract is very likely to involve more than one vendor, as it will cover a number of different services. That makes it difficult to put firm figures on costs and benefits until the evaluation process is substantially under way, he says.
Other sources in health board organisations and at health minister Annette King’s office could not provide an estimate either.
Dever says there is a possible snag in the arrangement, in that it treats telecommunications as a commodity, “and I don’t believe it is”. It’s difficult to speak of a chunk of telecommunications capacity in the same light as a cubic metre of gas, because telecomms technology is alway moving and there are continual decisions to be made about possible upgrades within the “chunk”, he says. “It’s something you need to stay on top of.”
But the group as a whole has agreed to go with the plan, he says, and whether it is a correct decision and a viable plan will be considered as part of the evaluation, dependent on what the bidders offer.