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

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

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

Several planned features of the proposed Marketplace are in
line with the recommendations
of the ICT Procurement Taskforce
. A discussion
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

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.