IBM and Oracle are set to become the next major IT vendors to enter into whole-of-government arrangements with the federal government as part of the Digital Transformation Agency’s co-ordinated procurement push.
The agency has been looking to expand the government's ability to synchronise how it sources IT since being handed a remit spanning IT procurement, policy and project management.
Co-ordinated IT procurement measures are already estimated to have saved about $1.2 billion since 2008, while reducing duplication, improving transparency and increasing the compliance of agencies.
The DTA has been in talks with software giant SAP for the past several months around the creation of a licensing arrangement, much like the whole-of-government volume sourcing agreement with Microsoft.
The arrangement will be mandatory for agencies if they want to purchase SAP services or products.
Now the agency has revealed that it is also in negotiations with IBM and will soon begin talks with Oracle for similar co-ordinated procurement arrangements.
“The DTA is expanding the number of ICT co-ordinated procurement arrangements, with negotiations underway with major IT vendors SAP and IBM and negotiations expect to soon begin with Oracle,” the agency said in documents released last night.
iTnews has sought further detail about the arrangements from the agency.
IBM, SAP and Oracle are responsible for a significant portion of the federal government’s ICT spending each year, with IBM identified as one five large vendors to have secured a quarter of the government's total ICT spending between 2009-10 and 2014-15.
“Together, these three vendors have 283 contracts in place (from 2005) with the Australian Government worth $2.5 billion," the DTA said.
The creation of new coordinated procurement arrangements is happening alongside the renewal of the federal government’s exclusive Microsoft licence arrangement with Data#3, which the DTA is planning to replace with a broader arrangement.
It's not clear if the deals stuck with vendors will be established separately or as an omnibus arrangement.
The latter is a possibility as the government has been working to reduce the number of IT panels and similar arrangements it operates.
The vendor deals are part of the federal government’s new approach to procurement to reduce the total annual ICT spend by 10 percent over the next four years, cap IT contracts at $100 million and free up a further $650 million for Australian small to medium enterprises each year.
Those measures came from a review of how government buys from industry which was conducted by the DTA’s ICT procurement taskforce.
It suggest introducing a centralised procurement approach where the government “apply partnership approaches to its major suppliers” and “engage the leading vendors by volume to maximise the benefits across government”.
The new arrangements will join the existing co-ordinated procurement functions that were transferred from the Department of Finance to the DTA as part of the shift of whole-of-government IT responsbilities.