Above image: Screenshot from cover page of Discussion Paper on the proposed Hardware Marketplace

Above image: Screenshot from cover page of Discussion Paper on the proposed Hardware Marketplace

DTA Australia proposes the creation of a Hardware Marketplace for government agencies

The Digital Transformation Agency (DTA) in Australia is proposing the creation of a Hardware Marketplace to make the purchase of ICT hardware simpler, clearer and faster for buyers in the government and sellers. The Hardware Marketplace will be available for all Federal, State and local governments for all categories, allowing them to buy ICT hardware to support internal business processes. (It is mandatory for Non-Corporate Commonwealth entities to procure through coordinated arrangements, where these exist).

This marketplace will leverage DTA’s experience in successfully building and managing catalogue-based, simplified and coordinated procurement solutions such as the Digital Marketplace and the ICT Procurement Portal.

The DTA plans to recover the cost of the hardware marketplace through an administration fee charged to participating government buyers. The administration fee will initially be 2 percent of invoiced purchases, reviewed periodically.

The Hardware Marketplace, with 17 ICT hardware and related categories classified as ‘End User Hardware’, ‘Infrastructure’ and ‘Associated Services’, will consolidate the expiring ICT Hardware and Associated Services panel, the Mobile panel, and the hardware categories of the Commercial Off The Shelf Software and Hardware panel (COTS panel). Some products and services are planned to be available from June 2018, with more added over time.

In 2015-16, 15% of ICT procurement costs were attributable to hardware. 2017 reviews of the Hardware and Mobile panels found that both arrangements are meeting the Government’s overall objectives for coordinated procurement, and identified opportunities for potential enhancements. However, the ICT Procurement Taskforce found that panel arrangements set up by agencies to streamline their ICT procurement can be overly complicated and can result in the exclusion of new suppliers. Hence, the Taskforce recommended immediate simplification of a range of ICT procurement practices for agencies, including reforms to ICT procurement panel arrangements. This recommendation was accepted by the Government.

Several planned features of the proposed Marketplace are in line with the recommendations of the ICT Procurement Taskforce. A discussion paper has been released outlining some proposed features of the Hardware Marketplace, and the DTA is inviting feedback from buyers, sellers and interested parties.

Planned features of the marketplace

For instance, the marketplace will be an always open, one-stop shop for government to buy value-for-money ICT hardware by harnessing whole-of-government demand. It will allow entities to buy ICT hardware through one simple, clear and fast online catalogue.

To keep Hardware Marketplace catalogue flexible and responsive to buyers, it will remain open for new sellers to join at DTA’s discretion, after being assessed as suitable. Additionally, sellers may submit a minimum percentage discount off recommended retail prices for each category, rather than a fixed price per product or service. The DTA will assess whether the discounted pricing represents value for money for the Commonwealth.

To reduce red tape, buyers can approach a single seller using the agreed seller discount structure for all purchases under a predetermined threshold. The DTA is considering a threshold of AU$80,000 (including GST) for open market approaches. For purchases over the threshold, buyers will issue requests for quotation through an online platform to all sellers in the relevant category. Sellers will have an opportunity to submit a best and final offer. The successful seller’s prices will be available in the marketplace to all buyers until the end of the agreed quotation validity period.

To encourage competition and improve transparency, the DTA is also considering publishing product and service prices, which can be viewed by all sellers on the marketplace in the relevant category. Many large marketplaces have implemented a similar approach, including the Singapore Government’s GeBIZ platform and public online marketplaces, such as eBay and Amazon.

In addition to this, DTA intends to allow sellers to revise product and service discounts at any time, as long as they remain equal to or greater than: 1) the minimum discount that the DTA assessed as representing value for money when the Hardware Marketplace was established; and 2) the discount offered to a buyer through a request for quotation (over the threshold) process, where the quotation validity period has not lapsed.

Sellers can also add and remove products and services at any time, as long as they comply with the discounting structure.

The DTA is also investigating ways to improve the process for buyers that are looking to purchase ICT through Hardware as a Service (HaaS) contracts, though DTA is not considering HaaS as a separate product category. HaaS combines hardware leasing/renting with associated services and the discussion paper notes that cloud-computing technology has made HaaS attractive.

Launch timeline

The DTA intends to launch the Hardware Marketplace in two phases upon the expiry of the COTS panel arrangement on 31 August 2018.

In the first phase one a request for tender (RFT) will be released, for the planned infrastructure categories, to the open market through AusTender. This will be done in the first half of 2018.

Following the successful implementation of phase one, the DTA will launch the remaining categories through a separate RFT process. While the DTA is transitioning categories to the new Hardware Marketplace arrangement, DTA intends to extend the current Hardware and Mobile panels until the completion of Phase 2. Current sellers on these existing panels will be able to apply for inclusion on the new Hardware Marketplace by responding to the RFTs published on AusTender.

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