NSW tender scheme to encourage smaller suppliers

The NSW government has ditched much of the red tape and expense associated with technology tenders in a bid to give small suppliers a better shot, and the industry has applauded.

NSW agencies spend about $2 billion a year on information communications technology including hardware, telecommunications and software.

Administered by the Department of Finance and Services, the new ICT Services Scheme allows vendors to apply online for inclusion in always-open supplier listings for products and services.

The shake-up comes as Queensland prepares to overhaul its ICT purchasing, with the establishment of three new panels under the auspices of the Department of Science, IT, Innovation and the Arts.

Starting this month, the NSW scheme replaces a government supplier panel called Contract 2020.

Under the new scheme suppliers can do deals for less than $150,000 using a simple, short-form contract, while an advanced supplier list with more rigorous accreditation requirements covers bigger contracts.

Agencies can use the eQuote facility on the department's ProcurePoint portal to manage requests for quotes. Suppliers are notified of pending requests and can submit responses and view award results online.

Supplier management fees are no longer being levied after research last year revealed the charge discouraged smaller vendors and was passed back to agencies in the form of higher prices.

Having a broader choice of approved suppliers is expected to circumvent what the department refers to as "leakage" - agencies buying off-panel because their preferred supplier is not accredited.

Uptake of the new scheme will be monitored by a cross-agency committee that will require vendors to provide bi-annual statements of the services supplied.

The department would not reveal registration numbers for the scheme but a spokesman said more than 600 industry representatives had attended a supplier briefing late last month.

Vendors had welcomed the scrapping of management fees, the simplified application process and the opportunity to lodge applications at any time, he said.

The chief executive of the Australian Information Industries Association, Suzanne Campbell, said extensive consultation with the ICT industry had resulted in a system other states would do well to emulate.

"The level of uptake and enthusiastic engagement suggests this is going to facilitate real-time, short-term engagement," Campbell said.

"We will be promoting this as best practice across the country," she said.

Agencies would benefit from better access to the agility and creativity of smaller suppliers, Campbell said.

In the past, the cost and complexity of doing business with the government had deterred all but the bravest, she said.

Andrew Stein, chief executive of web application developer Policy Point, said making it easier for small and medium enterprises to do business could pave the way for less timid buying behaviour in the public sector in the longer term.

As well as red tape, smaller suppliers struggled to get a hearing from government buyers who saw international vendors such as IBM as a safer bet, Stein said.

Alan Hansell, a public sector analyst at Intelligent Business Research Services said the eQuote system could be a useful tool for agencies looking to get funds allocated for projects as it allowed them to develop budgets easily.