iTnews requested that DOHA answer which of the conditions within clause 8.33 of the Commonwealth Procurement Guidelines (CPG) were cited as an excuse not to follow the protocol of offering the work to the open market.
The department replied that approvals were obtained under clause 8.33(e), under which agencies are able to purchase directly (without a tender):
"for additional deliveries of property or services by the original supplier or authorised representative that are intended either as replacement parts, extensions, or continuing services for existing equipment, software, services, or installations, where a change of supplier would compel the agency to procure property or services that do not meet requirements of compatibility with existing equipment or services."
This would suggest that DOHA considers its enterprise IT environment to be unique in that it is only serviceable by IBM.
But even those large agencies that do have unique needs - such as the Australian Tax Office, for example - have chosen to use the open market to drive down the cost to the taxpayer for the provision of IT services.
In the case of the ATO, incumbent supplier HP won back the business - perhaps for many of the same reasons DOHA has stuck with IBM - but the business was nonetheless contested.
The ATO gave the industry two years of lead time between advising of its intentions to offer tenders and choosing HP on Friday.
That kind of timeline makes a competitive tender process at Health look fairly unlikely with just seven months remaining.
ICT sourcing analysts contacted by iTnews said that whilst legally there was nothing to stop an agency opening and closing a tender in the space of a fortnight, a major managed services contract required "volumes of preparation by all parties".
Suppliers to very large agencies would expect a tender process to be a "multi-year endeavour."
Usually this would involve several years of advisors scoping the market before a tender is released. Then there would be a requirement for six to eight weeks for industry to respond to a tender, if not longer. A similar period of time is usually set aside for evaluating responses.
With the latest outsourcing deal with IBM due to expire in only a matter of months, Madden would need to act very quickly to give suppliers adequate time to bid. "Running out of time" simply isn't a valid excuse when taxpayer dollars are being spent.