Govt eyes up Oracle for new coordinated procurement deal

Oracle is set to join IBM and SAP in talks with the Federal Government’s Digital Transformation Agency (DTA) to establish a series of new whole-of-government coordinated procurement arrangements with the technology vendors.

The DTA, which evolved out of the government’s Digital Transform Office (DTO), is charged with helping the Australian Government accelerate its digital transformation agenda.

Currently, it manages a suite of IT procurement panels, many of which were transferred from the Department of Finance earlier this year.

Now, the DTA has revealed it is also in negotiations to establish new coordinated procurement arrangements with SAP, IBM, and is also set to soon begin talks with Oracle.

The impending procurement arrangements were outlined in the Agency’s submission, dated 29 September, to the Parliamentary committee investigating the digital delivery of government service to the Australian public.

In its submission, the DTA said it is in the process of expanding the number of IT coordinated procurement arrangements currently in play, with negotiations underway with major IT vendors.

“Together, these three vendors have 283 contracts in place (from 2005) with the Australian Government worth approximately $2.5 billion,” the DTA stated in its submission.

The kind of coordinated procurement arrangements the DTA is working up with the three vendors, along with other strategies, such as whole-of-government panels for commodity goods and services, are some of the ways the DTA manages its responsibility for developing and providing guidance to government agencies on the application of IT procurement policy.

The DTA claims that such coordinated procurement aggregates the Government’s purchasing power and makes it easier for agencies to get the digital and IT goods and services they require by simplifying the process and reducing administrative costs associated with procurement.

“It is estimated coordinated procurement has reduced the government’s ICT costs by about $1.2 billion since 2008. It has also reduced duplication, improved transparency and increased agency compliance with policy,” the DTA said.

It should be noted that the DTA’s coordinated procurement is already implemented through a range of mandatory IT coordinated procurement arrangements, including for data centre facilities, hardware equipment and services, mobiles phones, Microsoft software, and telecommunications services.

In August, the DTA put a new whole-of-government software licensing and services (SLS) procurement panel out to tender, with the new panel arrangement recruiting for its initial category, Microsoft Licensing Solutions Provider.

Although the DTA is eyeing up new deals with top tier vendors, it is also taking the time to scrutinise some of the projects carried out by such vendors.

Indeed, the DTA’s Digital Investment Management Office is currently monitoring 72 major IT projects, which together claim an aggregate IT investment budget of $5.3 billion.

At the same time, the Digital Investment Management Office is also providing oversight to 19 initiatives, which together represent 53 per cent of the portfolio by budget.

While the Agency revealed some of its emerging procurement arrangements with a few of the biggest tech players in the local market, it also shed some light on the public sector spending being directed towards smaller players via its Digital Marketplace platform - a major focus for the Agency.

The DTA’s Digital Marketplace procurement arrangement is aimed to make it easier for smaller businesses to compete for government contracts for digital and IT goods and services.

Since it was launched in August 2016 as part of the National Innovation and Science Agenda, the Marketplace has listed over 290 project opportunities, approved more than 640 sellers, and registered over 760 government buyers.

To date, more than $40 million worth of contracts have been awarded via the marketplace. According to the DTA, 81 per cent of these deals – worth $32.5 million – have been awarded to small-to-medium enterprises.