NSW Govt to disclose budget details to tenderers

Audit sparks new approach to procurement.

NSW Government agencies will disclose their ICT project budgets to tenderers, following an audit of the State Government's expenditure.

The Government today responded to findings of a Commission of Audit it established in mid-2011 to improve public sector management and governance (pdf).

Audit documents (pdf), released today, included 132 recommendations, including that ICT procurement practices be reviewed and improved to support government priorities.

The Commission of Audit noted that the Government could save more than ten percent of its annual IT spend, worth almost $1 billion in 2009-10, by more carefully scoping projects and aggregating requirements.

Auditors criticised the Government's existing, "one project-one vendor" approach, noting that it failed to leverage lessons learned.

The NSW Government agreed to auditors' recommendations that "IT projects be carefully scoped and that no budget be set until a firm costing can be made after the design phase".

It also agreed to making technical providers "fully aware of both what the business needs ... and the available buget" before IT projects commenced.

The Government hoped that its ICT Strategy 2012 would "see agencies focus on business objectives and outcomes, rather than technical specifications", in response to audit findings that it spent 55 percent on backoffice functions and 45 percent on frontline services, instead of the target 40-60 percent split.

Sub-optimal deals

Auditors encouraged the Government to aggregate its backoffice functions like records, reporting and 'enterprise resource programs' to cut costs and improve design and risk management.

The report found fault with traditional fixed-price IT contracts, which accounted for "excessive risk" and thus were priced much higher than if risks were identified, costed and managed properly.

It also identified a tendency for agencies to "[spec] up" their purchases by “adding unnecessary extras”.

Although agencies had achieved mobile rates that were comparable to best in market, "almost all agencies are on the wrong cap plans and are spending too much for too little use", auditors found.

The Government did not address the Commission of Audit's finding that "an aggregated government mobile and fixed broadband purchase would be better value than individual agency based agreement".