The Assistant Minister for Cities and Digital Transformation, The Hon. Angus Taylor MP, has released the Report of the ICT Procurement Taskforce (the report).
The report makes a range of diverse recommendations including developing ICT specific procurement principles, simplifying procurement practises for agencies, encouraging innovation, encouraging outcome-focused procurement, minimising cyber security risks, and building strategic partnerships with significant ICT vendor relationships.
The Government has also announced that Government IT contracts will be capped at a maximum value of $100 million or three years’ duration.
There are some immediate steps you can take in response to the report and the announcement of the cap. Here are some things to think about in implementing the recommendations in your procurements:
- Simplification – it’s true, procurement and contract documents are getting more and more complex. Many complex provisions can be drafted more simply with minimal change to the risk profile. There are ways of explaining the contractual relationship you want without layers of complexity that outweigh their value – think about options for doing this.
- Encouraging innovation – encourage alternative solutions, and innovative ideas for meeting your requirements, but ask the right questions about what success looks like and managing risk.
- Recognise the risk of failure in your contracts, rather than ignoring it or leaving it to black letter protections like liability. Include a process that motivates early detection of risks and pre-agreed flexibility to change direction to mitigate and manage risks. Allow for low risk experimentation stages.
- Outcomes focus – embrace qualitative outcomes. Use outcomes to explain what matters to you, rather than less relevant quantitative measures. Learn how to draft outcomes, how to explain them to industry and how to structure measurement approaches that are understood and will be followed.
- Agile approaches to development – use collaborative approaches to developmental tasks or stages, but understand how to measure vendor promises, without discouraging risk taking, by designing your agile methodology to achieve this.
- Improving information – incorporate standard and simplified reporting requirements to measure contract performance. Consider using online tool reporting.
- Simplifying contract management – consider layers of management strategies, that allow you to be flexible in the level of effort and involvement you need to have in a project.
- Strategic focus – make your procurement consistent with your overall ICT strategy. Build a strategic focus into your contracts, and explain what a strategic relationship means to you, so generic contract wording is not left idle in ongoing management.
- Industry collaboration – encourage vendors to team with SMEs, explain how you expect them to collaborate and measure it in a way that makes success valuable.
- Integration and vendor collaboration – incorporate your focused collaboration expectations (e.g. for collaborative behaviour). Particularly if large value projects need to be split into smaller ones with the potential for engagement of multiple vendors, consider the options available to drive collaborative behaviour, such as use governance and reward processes that will achieve multi-vendor collaboration. Also consider other available mechanisms, including using a phased approach, review mechanisms and renegotiation rights.
- E-procurement – look at ways to incorporate electronic contracting, like the digital marketplace.
Think about the link that is often missing in major ICT contracts – a focus on foreseeable problems and pre-defined foresight about who does what if they arise.
There are two sides to every contract – think about how your supplier can better help you achieve success. Use mechanisms (and incentives) to encourage a deeper relationship and a shared vision (that goes beyond revenue recognition and milestone payments).
The Maddocks team has substantial experience in all of the above issues, and is passionate about excellence in government procurement. We have worked on all forms of major ICT projects, whole of government panel and major vendor projects, simplified e-procurement, innovation processes, outcomes-based procurement, and collaboration arrangements. Our team welcomes the opportunity to discuss these issues and options with you, as part of the no-cost value we seek to add to all our Australian Government client relationships. We will tell you about:
- example ICT projects where we have seen best practice consistent with these recommendations
- what went well and what didn’t
- lessons we have learned
- why we say all of the DTA’s recommendations are capable of being implemented in a cost effective way
We invite you to talk to us about your real-life situations and how the report recommendations could help you achieve better outcomes for your ICT procurements.
The report and the Government’s response can be found here.
Please contact our Commonwealth Team if you would like to arrange a discussion.