NSW to invite bids for ServiceFirst replacement

The NSW government has taken its first formal steps towards the dismantling of its troubled shared services arrangements, following years of hinting it would outsource the functions currently delivered by ServiceFirst.

NSW Finance and Services minister Andrew Constance

Finance and services minister Andrew Constance this morning announced from April, the state will invite registrations of interest from companies who think they can offer a better and cheaper way of providing corporate services to the government-run business unit’s 7500 public service clients.

“We want to achieve value for money from shared service providers and we are open to different delivery models if it leads to better outcomes, reduced costs and increased productivity,” Constance said in a statement.

“We intend to explore greater market participation through new commercial models to increase contestability and produce more efficient outcomes for the government and taxpayers,” he said.

Constance revealed to iTnews back in September a market sounding was underway to gauge how the industry would react to the outsourcing of the shared services provider.

Taking the in-house service delivery functions of ServiceFirst – which include IT, human resources, payroll and financial services – and contracting them out to the private sector was also a recommendation of Kerry Schott’s commission of audit into public sector operations in August 2012.

The approach mirrors the Victorian government’s own efforts to transform CenITex into an ‘enabler’ of services that are market sourced, rather than a hands on service provider.

But the announcement will offer no comfort to ServiceFirst’s 350 staff, who now find themselves in the same boat as their shared services peers inside CenITex and state colleagues employed by Family and Community Services cluster provider Businesslink – wondering whether they will have a job this time next year.

Constance said he expects the initial ‘market consultation’ process to be completed by the end of the year. Submissions will be whittled down to a short list of viable providers, and the Department of Finance and Services has left the door open to take formal bids for the work at this point.

Established in 2008, ServiceFirst delivers services to the smaller departments and agencies in the NSW government, who are not deemed to have the critical mass to justify in-house corporate services.

Clients include the Department of Finance and Services, Treasury cluster agencies, and Premier and Cabinet cluster agencies. Moves are also under way to see the Department of Trade and Investment brought in under the same umbrella.