Defence reveals plans to replace $340m IT panel

The Department of Defence has revealed what its IT services landscape might look like after it dismantles the massive, multi-year systems integrator panel that has governed much of its IT spend since 2011.

The five-member applications managed services partnership agreement (AMSPA) - which put Accenture, HP, CSC, IBM and BAE in pole position for major Defence application work for the past five years - officially expired in September.

In May the department confirmed it had no intention to extend or renew the closed systems integrator panel.

Instead it signed a $7.8 million contract with Deloitte to map out an alternative procurement plan with a “wider scope of services”.

A 2015 internal sourcing review also recommended that Defence’s CIO group overhaul its use of IT panels.

Yesterday the department offered the market a first glimpse into its new procurement strategy, which will centre on an uncapped panel of pre-qualified suppliers, offering “end-to-end” as well as “niche” services across three service towers.

It wants vendors offering value for money in applications services, systems integration and more generic ICT services - although it warned that these categories are subject to change ahead of a formal approach to market.

The proposal could signal the first opportunity non-AMSPA vendors have to win business in the warcraft, HR and finance IT domains since the now-extinct panel started.

“The aim of the [ICT provider arrangement] is to enable Defence to become a smarter and more sophisticated buyer of ICT goods and services through the implementation of a new structural framework that allows Defence to procure affordable, high quality and flexible services that provide value for money by engaging the market through a new ICT sourcing ecosystem," the agency told industry.

“The initial step in achieving this objective is to replace the expiring AMSPA and the other internal ICT sourcing constructs, where appropriate."

Defence boasts one of the largest IT operations in the country, spending about $1.3 billion every year in support of military and civilian activities.

It has just launched one of its biggest projects to date, a $1 billion rationalisation and modernisation of the ERP environment spanning the organisation.

Defence’s procurement officials are calling on industry to provide feedback on its new vision, as well as to lodge their interest in being part of a new scheme.

Potential suppliers are being asked what they think of a possible matrix of rewards and penalties doled out to panellists for beating or missing project milestones..

Defence has also raised the prospect of a tiered performance management framework that would allow panellists to be rated against each other according to KPIs, customer satisfaction and the quality of behaviour and relationships.

Feedback remains open until 25 November 2016.