Government to cap IT contract size

The government will look at setting a range of annual targets for ICT procurement, starting with an annual cap for agencies on ICT contracts.

The announcement was in response to recommendations from a taskforce scrutinising ICT procurement.

The taskforce’s report, released today, found “deep dissatisfaction of almost all parties involved in current government procurement practices and processes”.

The report states that the taskforce has concluded there are three main barriers to improving the government’s procurement of ICT goods and services: Devolved decision-making that has led to a lack of centralised policies, coordination, reporting, oversight and accountability; a focus on compliance and a fear of failure; and outdated practices rooted in waterfall approaches to delivery.

In 2015–16, agencies reported that they spent $6.2 billion on ICT, according to the report.

In response to the report the government said it would shakeup procurement practices.

That includes imposing a cap on IT contracts at $100 million or three years’ duration, which the government said would give SMBs more opportunities to bid for smaller components of larger projects.

“Government is targeting an increase of 10 per cent of its annual $6.5 billion IT spend to smaller operators,” assistant minister for digital transformation Angus Taylor said.

“These are exciting changes that will throw open the door for SMEs and allow government agencies to bring in new and innovative services,” he said.

“A cap is now in place to limit the term and value of government IT contracts. We are reducing the number of IT panels to make it easier for small players to supply services. We are actively encouraging small innovators to sell us their ideas.”

The taskforce also recommended a public dashboard of ICT projects and spending; however, the government said it would instead launch a dashboard accessible only to the government and agencies.

The government’s full response is available online.

Earlier this month the Senate established an inquiry into the government’s delivery of digital services.

The inquiry will examine whether planned and existing programs will deliver value for money as well as privacy, security, quality and reliability.

The inquiry will assess strategies for whole of government digital transformation and digital project delivery, including procurement.

The inquiry was instigated by the Labor Party, which cited a number of high-profile incidents including the Australian Bureau of Statistics’ handling of the online component of the Census and the ‘darkweb’ service selling access to Medicare data, as well as Centrelink’s ‘robotdebt’ data matching program.