Govt reappoints Data#3 as sole Microsoft reseller

Update: Retains exclusivity under new testing regime.

The Federal Government has reappointed reseller Data#3 as provider of Microsoft licenses for government departments under its volume sourcing agreement.

The new three-year contract, awarded yesterday, replaces an exclusive arrangement the government had previously held with Data#3 for Microsoft licenses to all agencies.

The reappointment comes despite the Australian Government Information Management Office (AGIMO) last year indicating it would open the panel to a wider variety of suppliers.

Data#3 reapplied for the new request for tender issued in November last year after being alerted to tender documents by iTnews' sister publication CRN.

It ultimately won the contract to provide licenses until 2015, with a further three-year extension.

The new panel of “large account resellers” for Microsoft licensing was due to come into force from June this year but the lack of other members will Data#3 retain exclusivity past the original March 14 expiry.

"We've been the pre-eminent large reseller to Government," Data#3 managing director John Grant told iTnews.

He said he expected a dozen other contenders interested in the panel but said having too many parties would be inefficient "where the margins are so tight".

An AGIMO spokeswoman would not confirm whether other suitable companies had bid for the same contract under the request for tender.

She said whilet Data#3 would retain exclusivity in the meantime, the new contract would subject the reseller to new testing requirements from the market.

The department reserved the ability to add additional panellists in future to test the supplier's performance over the course of the contract.

RFT documents suggested successful panellists may enjoy high volumes but tightened margins.

The Government spent more than $95 million on Microsoft licences and software assurance through the volume source arrangement during the 2011 financial year.

The contract required prospective resellers to offer prices on a "cost plus margin" basis, with the former component decided by Microsoft and either AGIMO's parent Department of Finance and Deregulation or the relevant, individual agency.

James Hutchinson contributed to this story.

Updated, 4.22pm: Added comments from Data#3 managing director John Grant.