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Government response to report of the ICT Procurement Reform Taskforce

Ministerial statement

The Commonwealth is undertaking significant reform in the way it procures ICT (Information and Communications Technology) services.

In October 2016, the ICT Procurement Taskforce was established as part of the Australian Government’s Policy for Better and More Accessible Digital Services 2016.

The Taskforce was given two clear objectives; make it easier and less expensive for businesses to contract with the Australian Government, and deliver better government services at a lower cost.

The Taskforce consulted widely across industry and government agencies and there was a strong sense of goodwill among participants. Public submissions were valuable in shaping the recommendations.

The Taskforce found that a culture of risk aversion in procurement has undermined the freedom to innovate and experiment, to take risks and fail, to try again and ultimately succeed. If we are to reward the innovative and entrepreneurial spirit, a new procurement culture is necessary.

I firmly believe that increasing the access for small companies to the Government’s ICT spend can drive a new industry in Australia.

As part of the reforms, the Government will set a target to increase by 10 per cent the SME (small to medium enterprise) share of Government’s annual ICT spend. This would represent a capital injection potentially twice the size of the National Innovation and Science Agenda.

The Taskforce Report makes it clear that, although the Commonwealth’s procurement model is robust and meets most needs, more can be done for ICT procurement and SMEs.

The 10 recommendations cover issues as diverse as developing ICT-specific procurement principles, reducing the number of ICT panels, building strategic partnerships, data-driven reporting, enhancing the Australian Public Service’s procurement skills, and new procurement methods.

I would like to thank all participants, business representatives and industry bodies who have generously contributed their insights and analysis. I congratulate team members who have compiled the final report (PDF, 549KB), published on the ICT Procurement Taskforce website.

I look forward to the implementation of these far-reaching improvements.

The Hon Angus Taylor MP
Assistant Minister for Cities and Digital Transformation

Recommendation 1

The Taskforce recommends adopting a framework for ICT procurement that includes ICT procurement policy principles to guide decision-making.

ICT procurement in the Australian Government will:

  • encourage competition
  • be innovative – iterate often – fail fast
  • be structured in a way that enables SMEs to compete fairly to directly provide components of significant ICT projects
  • be outcomes focused
  • use open standards and ‘cloud first’ approaches
  • minimise cyber security risks
  • not duplicate the building of platforms that have been built by other agencies.

All agencies will be required to report on compliance with these principles as part of their annual report performance statements.

Response:

The Government accepts this recommendation.

In consultation with agencies, the Government will develop a set of principles, policies and guidance to agencies on how best to carry out ICT procurement, consistent with our international obligations.

Recommendation 2

The Taskforce recommends setting annual targets for ICT procurement. An initial set of annual targets could comprise:

  • an annual, whole-of-government cap on internal and external ICT spending, with a target to reduce total annual ICT spending by 10 per cent over the next four years
  • maximum contract amounts and lengths for all ICT procurement
  • metrics on the quantum and timing of benefits realisation for all significant ICT projects
  • a measurement of the amount of ICT spending on agreed government priorities
  • a metric on the number of agencies that are using/building common platforms.
  • a metric on the percentage of annual ICT spending on significant projects going to Australian businesses, including a breakdown of the amount going to Australian SMEs.

All agencies will be required to provide an annual report to government on their contributions to achievement of targets.

Response:

The Government accepts this recommendation.

Initially, the Government will establish an initial annual cap for agencies on ICT contracts and exceptions will require approval from the Assistant Minister for Cities and Digital Transformation and the Minister for Finance.

Recommendation 3

The Taskforce recommends establishing a comprehensive dataset of government ICT spend that will allow greater analysis at a portfolio and project level, including forward projections of ICT investment levels.

Response:

The Government accepts this recommendation in principle.

The Government acknowledges that current datasets are limited in their ability to inform significant forward investment decisions. At a minimum, medium term trends of more robust data will be required to effect this recommendation.

Recommendation 4

The Taskforce recommends developing a public dashboard of significant ICT projects and spending that will allow the government and public to see the status and outcomes of its ICT investment decisions.

Response:

The Government partially accepts this recommendation.

The Government will develop a dashboard of ICT spending which will be accessible to government and government agencies.

Recommendation 5

The Taskforce recommends developing a comprehensive and contemporary ICT strategy to guide procurement approaches. This would seek to update and incorporate relevant existing policies, such as the government’s cloud strategy and the Digital Service Standard.

Response:

The Government accepts this recommendation and will implement it consistent with our international obligations.

Recommendation 6

The Taskforce recommends developing a medium-term strategy for building the Australian Public Service’s ICT procurement capability and culture.

Response:

The Government accepts this recommendation.

Recommendation 7

The Taskforce recommends that a coordination process be mandated for significant ICT procurements and significant ICT vendor relationships to:

  • provide a clear definition of ‘significant’ procurement and relationships
  • apply a strategic business partnerships model
  • develop an annual ICT procurement ‘pipeline’
  • identify an oversight body that will develop a platform for the secure sharing of information and data across government and advise government on APS procurement performance
  • include incentives for the building, funding and use of whole-of-government platforms
  • develop shared procurement approaches to market where efficient

Response:

The Government accepts this recommendation.

Recommendation 8

The Taskforce recommends immediate simplification of a range of ICT procurement practices for agencies, including reforms to ICT procurement panel arrangements

Response:

The Government accepts this recommendation.

Recommendation 9

The Taskforce recommends developing new ICT procurement pathways for:

  • catalogue-based e-procurements
  • innovative and small-scale experimentation procurements

Response:

The Government accepts this recommendation, and will implement it consistent with our international obligations.

Recommendation 10

The Taskforce recommends regular review and renewal of the ICT procurement framework and ICT policies so they continue to reflect contemporary best practice in a rapidly changing technology environment.

Response:

The Government accepts this recommendation.

The Government will conduct rolling review and update as necessary the ICT procurement framework to reflect contemporary best practice, and will implement it consistent with our international obligations.