Time’s up for government procurement reform

Former senior public servants have blasted the federal government’s technology procurement “failings”, including almost no action on the reforms promised half a decade ago, while calling for an overhaul of technology buying.

The experts — who include former senior executives at the Digital Transformation Agency (DTA) — want a new outside entity to lead a government procurement overhaul.

This would finally shift the government ICT procurement paradigm from acquiring goods to using it as an “instrument of social and economic policy” after lead agencies had missed multiple opportunities to do it themselves.

A joint committee is currently examining Commonwealth procurement after five concerning reports from the Australian National Audit Office on government procurement, including a damning report on the Digital Transformation Agency’s (DTA) ICT buys.

Former senior executives from the technology agency now working at consultancy Hypereal told the inquiry that technology procurement is a longstanding issue because the DTA and Finance department had “failed to embrace” opportunities to enact change.

Almost all the government accepted recommendations from a 2017 ICT Procurement Taskforce have not been implemented, the Hypereal submission says, accusing the DTA of engaging in “performative compliance” when tasked with leading substantive change.

Hypereal, co-founded by procurement expert Catherine Thompson, told the inquiry the Commonwealth’s procurement paradigm is locked within compliance and limited perceptions of value for money.

But ICT spending should be being used as an instrument of economic and social policy, it said.

“And this is the core challenge for federal government procurement,” Hypereal told the inquiry.

“It does not prize procurement expertise and has not made procurement a profession within the APS. It cannot therefore recognise that its expectations and implementation of procurement lag decades behind leading private sector practice.

“It is wedded to the existing ways of doing things, because it cannot conceive of alternatives, and it has so far stood fast against all attempts at reform.”

Hypereal said it “does not seem feasible” that such a paradigm shift could come from lead technology procurement agencies the DTA and Finance department, which had “failed to embrace” opportunities to lead change.

Instead, it proposes a shake-up lead by an independent commercial entity, which could be paid for by the fees government agencies currently pay to procurement leads such as the DTA to access whole-of-government sourcing agreements.

“This new entity would take a centre-led approach, adding value to agency buyers whose work does not bring them into regular contact with ICT supply markets by providing them market intelligence and sourcing expertise,” the submission said.

Personnel from the entity would assist government agencies in both procurement and contract management, as well as developing wider buying strategies and targets alongside better reporting.

“Critically, at a period when economic headwinds require each dollar of public money to be carefully invested, it would also be capable of delivering a 5-10 per cent real cost-down on the government’s annual ICT spend, which is placed imprecisely at between $4 billion and $9 billion,” the submission said.

Echoing Ms Thompson’s call in the InnovationAus Innovation Papers, Hypereal proposes a new definition of government procurement to test what a good technology buy should satisfy.

“Government procurement is the active lifecycle management of supply markets in order to achieve transparently reported technology, financial and social outcomes that promote better government and the wellbeing of the people.”

Do you know more? Contact James Riley via Email.