Government's ICT Services panel due late 2011

Will require Cabinet approval.

The Federal Government’s proposed super IT services panel was likely be taken to Cabinet for approval later this year, according to industry sources.

Creation of a Whole of Government ICT services panel was proposed last year, rationalising 87 existing panels to four or less and proposing greater use of eNegotiation and reverse auctions.

Over 30 representatives from various IT suppliers, companies and industry associations attended a three-and-a-half hour closed meeting hosted by the Australian Government Information Management Office (AGIMO) in Canberra this week.

It was conducted under “Chatham House rules”, meaning that ideas discussed at the meeting could be revealed without attribution to specific attendees.

Sources told iTnews that because most parliamentary departments and agencies subject to the Financial Management and Accountability (FMA) Act would be required to use the new panel, the arrangement would require Cabinet approval.

To reach that point, the panel arrangement had to comply with various governance processes, including consultation with the Government’s CIO group, before it could be shepherded through the secretaries committee into Cabinet.

This implied a timeline for approval of "the latter half of the year", according to sources.

Auction fight

AGIMO set up the meeting in Canberra to address what it believed were industry misconceptions about how the new ICT services panel would operate.

While the IT industry was welcoming of the consolidation of existing panel arrangements, some attendees expressed reservations about the detail and impact of the plan, especially on small and medium enterprise (SME) suppliers.

The Australian Information Industry Association has previously raised concerns with the reverse auction arrangement, which could bias procurements on price alone.

“To AGIMO’s credit they took some of that early criticism on board,” one insider said.

“They are looking at various mechanisms that avoid turning the auction into a fight to the bottom on price.”

Among mechanisms discussed would be the ability to reveal both a mean price and standard deviation as well as the lowest price, in response to any quotation request.

“We will then have the ability to see where our price is,” another source close to the panel said.

“If it’s high then you have to ask yourself, 'Have we got the value differentiators that ensure that price we are putting forward that is high will still be competitive on a value for money basis?'”

“On the other hand if it tends to be on the low side, the question might arise whether the supplier has fully understood the requirements. 'Are there things we have missed?'”

Shortlisting suppliers

Government agencies were understood to have welcomed the savings from having fewer panels to manage but were concerned about the potential number of suppliers on the new panel.

More suppliers meant more time to process a larger number of responses from requests for tender.

Attendees at the Canberra meeting discussed at length the number of panellists to be admitted and the admission criteria.

“Clearly you’d need solid requirements upfront to weed out those that are not real companies based on financial analysis," one source said.

"But you don’t want to make it so hard [that] it’s too hard to get onto the panel."

The source told iTnews that there could be a requirement for suppliers to put a price range or maximum on a particular set of services to be offered.

Surprisingly, there was little time for discussion concerning AGIMO’s proposal of an annual entry fee for suppliers, as well as what the ceiling for deals should be - concerns raised in an AGIMO discussion paper in December.

AGIMO first assistant secretary John Sheridan described the discussions in Canberra as "full and frank" in a tweet directly following the meeting.