Post on 18-Aug-2018
C2a – Unrestricted use within SA Government
AGENDAIntroduction
Mr Sam MinerviniContract Services
Presentation – Practical Procurement SolutionsMr Andrew Mills – Future ICT, Department for Transport,
Energy and InfrastructureQuestions
Networking and Light Refreshments
Professional Development Seminar
C2a – Unrestricted use within SA Government
SA GovernmentFuture ICT Service Arrangements
Andrew MillsDirector Procurement Projects
C2a – Unrestricted use within SA Government
Milestones/Achievements
Since July 2003 Future ICT has…Had 14 Acquisition Plans approved
In conjunction with Government ICTS, negotiated 11 Contract Extensions (Mobiles x 2, Microsoft Select 5, TSA, Standard PC Panel, GRN and ISP x 3)
Had 36 Evaluation and Assessment Plans approved
Conducted 8 Industry Briefings
Released 48 Market Approach Documents (IDC, IRI, RFP, RFT and Statement of Requirements)
Received 220 Proposals from the Market
Established 22 Evaluation Project Teams (involving 34 agency staff)
Produced 57 Evaluation Reports
Had 19 Purchase Recommendations Approved (State Procurement Board)
Received and processed in excess of 1,300 enquiries/questions from industry
Held 147 Steering Committee Meetings
Provided 30 Cabinet Submissions/Information Notes
Signed 40 Contracts (Software Licensing Agreements, Head Agreements and Purchasing Agreements) with 21 Suppliers
C2a – Unrestricted use within SA Government
Success Factors
No significant service continuity failuresMet all “critical” datesImproved serviceCosts less - $30m pa lower expenditure (13%)Limited media coverageMinimal industry complaintsNow have a capability
C2a – Unrestricted use within SA Government
History - Future ICT
Late 2000 - research and internal studies commenced
June 2002 - Stage 1 Approved - Planning of appropriate replacement strategies - included extensive across-government consultation, peer review and research
December 2002 - Stage 2 Approved - Development of Sourcing Strategy, Strategic Sourcing Framework and high level scopingJuly 2003 – Tranche 1 ApprovedNovember 2005 – Tranche 2 Approved1 July 2007 – Move to OCIO as an operational unit
C2a – Unrestricted use within SA Government
Future ICT
What do we do?Ongoing Development of Sourcing and Procurement Strategies for ICT InfrastructureCurrently undertaking Procurements of ICT-related goods and services to ensure business continuity for agencies due to the expiry of the EDS & Other contracts
What don’t we doTransitionOngoing managementApplications sourcing
C2a – Unrestricted use within SA Government
Note – Minor changes have occurred due to Government organisational changes
C2a – Unrestricted use within SA Government
ICT Governance & Management ArrangementsCabinet
CrossCross--Government Government Governance DomainGovernance Domain
Department of Treasury and Finance
MPICCCabinet
Committee
Budget/CapitalNegotiations for
Across-Govt initiatives /elements
Minister for Infrastructure
Treasurer
Budget Budget DomainDomain
Future ICT
ProjectTeam
CE, DAIS
Executive Govt
Committees
Agencies
Legend
Project Teams
Portfolio Reference
GroupsCTO Forum, FICT, Transition, Other
Agency DomainAgency Domain
Agency Projects, strategy, policy, standards, contract admin, initiatives, services
Agency Representation
Responsible Minister
Government CIO
Minister for Administrative Services
ICT Transition Steering
Committee
ICT Services Steering
Committee
Future ICT Steering
Committee
Budget and Capital
Negotiations For Agency Initiatives /Elements
DAISGovt ICT
Transition
DAIS Govt ICTOperations
Across-Govt strategy, policy, standards, contract admin, initiatives, services
ED, Government ICT ServicesGovernment CTO
ICT Board
Note – Minor changes have occurred due to Government organisational changes
C2a – Unrestricted use within SA Government
Future ICT Core Principles
ICT – A Strategic AssetICT – A Business Support Tool (not an end unto itself)Overall Value for MoneyStandardisationFlexibility & ChoiceCommitment to Suppliers
C2a – Unrestricted use within SA Government
History of ICT Sourcing in SA
Special – OIT, IEPO etc
More centralised but still not fully
Driven by economic/industry development
Imposed – Cabinet decisions
Regard for business needs
Fiefdoms still exist
Many success stories
Experienced at contracting – not just ICT
C2a – Unrestricted use within SA Government
Sourcing Landscape
Significant in-sourced
EDS Contract – IT Infrastructure (minus desktop)9 (10 ½) year outsource but had modified over life - 30% external spend
Implemented for economic development outcomes (i.e. ITSSED)
Acceptable but not loved (attitudes have changed)
Telstra Contract – Data & Fixed Voice (10% external spend)
5 year contract influenced by economic development
Other – Optus (mobiles), Equipment Panels (PC’s, Photocopiers), GRN, Microsoft
Leakage from current contracts
C2a – Unrestricted use within SA Government
Sourcing
We started at the sourcing level
Excellent research – case for change
We have an approved sourcing strategy but:Wasn’t fully understood by senior management
It took too long
Over analysed & overly complex
Too technical
Needs review
Analysis lead to some paralysis – procurement process started late
C2a – Unrestricted use within SA Government
Procurement ApproachNot different or special – involvement of State Procurement BoardGovernance by non-ICT executivesOutcomes required
Replacement contractsOpen, transparent & clean processBuild a capability – human & organisationalNo worse than budget neutral – macro analysis
Single focus - purely ICT goods & services – no economic development
C2a – Unrestricted use within SA Government
Market ApproachAsk questions – not provide answersWhat not necessarily howBalance – ease of evaluation versus best value solutionBe wary of mandatory requirementsOverlap vs gapsDo not assumeBreadth of scope extremely importantPhasing – flexibilityBe prepared to adjust outcomesIndustry knowledge & ability
C2a – Unrestricted use within SA Government
EvaluationBe clear on the value being soughtAlways – separate financial from the restApproach
Non numericLower and upper hurdleIndividual to group assessmentsUse of specialist advisersReport – options not recommendations
Quality assurance and control criticalOther inputs to final decision
C2a – Unrestricted use within SA Government
NegotiationSpecialist team activity – not for everyoneInvolvement of contract managers?Clear roles and responsibilities a mustDo it – imposition of outcomes has its dangersIt is a journey The team needs clear and unambiguous delegations – never full authorityHave clear understanding of gives & takesRecord keeping essentialControl the drafting
C2a – Unrestricted use within SA Government
Negotiation
Continually modify negotiation approachBe cautious of deadlines – always have a contingencyUnderstand that it must capture the intent and value of the “deal”Monitor value continuouslyBe prepared to walk if the value is not capturedCelebrate the conclusion but understand the result will always be flawed
C2a – Unrestricted use within SA Government
Contractual Objectives
Contracts to articulate not drive policyDevelop “Rules” as policy in parallelRecognise the allocation of risk between State & supplierNeed to capture the value proposition contained in the selected bid/sExplicit recognition of multi vendor environmentStandardized contract structure & subsidiary contract documentation
C2a – Unrestricted use within SA Government
Contractual Objectives (2)
Consistent implementation of contracting related policiesConsistent management and administrative practices including change controlFacilitate change across multiple contractsBroadest possible access to contract documentation
C2a – Unrestricted use within SA Government
Contract Structure
Head Agreement (HA) (16/20)One for each vendorCentrally managed
Purchasing Agreements (PA) (21/35)Defines goods and services to be procured (“the deal”)Service options
Customer Agreements (CA) (369/736)Actual services required by a customerAgency managed
Exceptions – software etc (18/19)
C2a – Unrestricted use within SA Government
Types
Contract types include:PanelMulti-vendor &Sole supplierBut – usually mixed
Many variations including:Fixed or firm priceOptionsVariable PriceNo price (at PA level)
C2a – Unrestricted use within SA Government
Consequences
Shorter term contractsMore ICT companiesMore flexibility for agencies but not what they expectedShift in accountability for contract & service
management - more agency responsibilityManagement of overlaps
Better value for money
C2a – Unrestricted use within SA Government
Lessons & Homilies (1)
Strategic vs pragmatic
Semantics is important – common understanding
Its hard, laborious & boring (most of the time)
It is complex and difficult so it needs to be broken down to achievable outcomes
Persistence pays
It takes longer than is wanted (18 month rule)
Smaller does not mean easier and shorter
C2a – Unrestricted use within SA Government
Lessons & Homilies (2)
Aggregation – to a point
One size does not fit all
Competition works
Ask questions – do not dictate outcomes
Be willing to change/stop mid process
It is resource intensive – not only for the visible 10%
Asset detail is not available - ever
C2a – Unrestricted use within SA Government
Lessons & Homilies (3)
Impact of non-core effort - renewals
Change agent or catalyst ??
Inevitable resistance – can dictate pace
Governance is king
Great opportunity to “educate” on ICT
Special project approach or operational capability
Rigour – quality, quality, quality
Time for approvals
C2a – Unrestricted use within SA Government
Lessons & Homilies (4)
Attention to detail
Devil is in the detail – but it has to be worked out – either once or many times & early or late
Stress is a constant – team dynamics important
Group think a major risk
Learn to let go
BALANCE
C2a – Unrestricted use within SA Government
Lessons & Homilies (5)
Knowledge & skill sets required to make up a sourcing team
Executive leadership & people skills
Program & project management
Procurement & process engineering
Domain technical & operational knowledge (eg ICT, ITIL)
Organisational & public sector management
Market & commercial
Contract management and administration
Legal, financial analysis & negotiation
Communication, writing & presentation
Administrative and quality processes
C2a – Unrestricted use within SA Government
Future
Move to OCIOConcept of Specialist Procurement UnitThree year commitment – to be reviewedRenewalsBroaden scope of workContinue evolution