In Australia, what does a new government ICT procurement strategy mean for aid?

CANBERRA — A reform of the Australian government’s ICT procurement policy is putting in place caps on the length and value of ICT-related contracts to enable more opportunities for small and medium-sized enterprises. But for the Australian Aid program and its focus on the use of technology to innovate and advance development assistance, what does this mean? The new policy, announced in Canberra on Aug. 23 by the Digital Transformation Agency’s Assistant Minister Angus Taylor and CEO Gavin Slater, may open competition to the delivery of technical aspects of the aid program. But it may also transform operations and governance of the Department of Foreign Affairs and Trade and deliver better data and reporting to educate the public on foreign aid. The priority is to innovate Wednesday’s announcement was a response to an ICT Procurement Taskforce Report that provided 10 key recommendations to improve ICT procurement processes and policies, to improve the visibility of ICT spending, and to improve engagement between government and vendors and develop reforms for ICT panels. In his speech to representatives of Australia’s ICT sector, Taylor explained that innovation was critical to the strategy moving forward. “If you were to ask me at the beginning of the work we have been doing here what I was seeking to achieve, I would have told you that number one is making it easier for innovative ideas,” Taylor said. “An overwhelming observation of coming into politics only four years ago from the outside, it would be that government needs to be more broad and we need to bring in good ideas, clever ideas of how to govern better, about how to do things better.” The report found that despite innovation being a key aim of the Australian government, including the aid program, suppliers complained that it was difficult to pitch ideas that would facilitate transformation of processes and procedure. Security requirements are also an issue for progressing innovation. Disruptive technologies, including cloud computing, could currently only run on unclassified government systems using unclassified data. For agencies like DFAT, the current security requirements of ICT systems not only prevents the widespread use of ICT, but may even prevent staff from accessing reports or information supporting work on the internet. The recommendations encourage small-scale experimentation procurements in the hope of propelling the Australian government forward in increasing innovation. Smaller contracts to encourage wider collaboration While the Australian Aid program has been moving toward fewer but larger contracts, in the area of ICT it will be the opposite. One of the key announcements — a cap of $100 million Australian dollars ($79 million) and three years on the value and length of a contract — is aimed to encourage more and smaller contracts to increase competition and reduce overall government expenditure. “We think this is an important step in the direction of saying we need smaller contracts wherever we can,” Taylor said. “There will always be a time and a place for larger contracts but $100 million in my view is still a large contract.” Larger contracts will require direct approval from Taylor and the minister for finance. Taylor repeatedly emphasized in his speech that the Australian government is the “biggest procurer of ICT and digital services in Australia,” spending $6.5 billion Australian dollars ($5.1 billion) annually. Increasing the number of ICT contracts awarded to small and medium enterprises by 10 percent — taking them to more than one-third of all ICT business — will encourage wider participation. Improved public engagement and communication As part of the recommendations accepted by the Australian government, an ICT spending dashboard will be developed alongside a focus on data-driven reporting. While these recommendations may be purely commenting on ICT-related services, it is an important move that can open the door to greater reporting of all government spending, including within the aid program. A continual complaint of Australia’s development sector has been the lack of transparency on the aid budget and communication with the Australian public of why the investment is valuable. And a complaint of DFAT is that their systems and processes do not allow this level of transparency. While there are attempts to counter this with the Innovation in Action map, many in the sector say that further openness is needed. A requirement to improve any procurement reporting processes should open the door to the delivery of wider procurement, grant and budget data to support NGOs in their planning, and to support vendors in understanding priorities and needs within this government agency. Impacts on the Australian Aid program The moves toward innovation are unlikely to impact Australia’s aid program. InnovationXchange, a unit within DFAT providing support for the use of new technology and approaches in the aid program, is already ticking the boxes for government requirements. Innovation is being promoted widely, with work being conducted to embed it within all aspects of the aid program. InnovationXchange have an open-door policy encouraging people to bring their ideas. Where the impacts will be felt is in the corporate and policy side of DFAT. Corporate systems, programs, information management and more will be impacted by the new rules, which could see more open systems and greater cross-government collaboration. But it may also lead to more administration as a result of managing a larger number of procurement processes and contracts, as well as initially impacting the delivery of programs, as systems are transformed and staff trained. The impacts may extend to posts, and this could open up competition to ICT suppliers in countries where Australia has embassies and commissions. A question remains over how large country program contracts containing ICT components will be impacted by the new rules, with the possibility that they may need to be tendered for separately. Whether the rules apply to international procurements and international ICT businesses is also a question that needs to be answered. When will the impacts be seen? As with many new policies directed at procurement, government agencies require time to process them and to determine what needs to change to support them. Barriers preventing access to DFAT and their contracts will not immediately fall — but there will need to be progress sooner rather than later. With targets set, but no clear deadlines, for an increased share of ICT spending directed at small and medium enterprises, DFAT will need to show progress in this area. For businesses wanting to progress opportunities, it is important at this stage to engage with DFAT to understand upcoming projects and changing objectives. This will give them a leg up when opportunities become available. Demonstrating the capability that already exists and can be delivered by small vendors is also important. For Taylor the strategy is to continue opening the door to better processes, procedures, competitions and partnerships. “This is just the start,” he said. “We’re on a journey here and we’re all on a journey.” So may be the Australian Aid program. Read more international development news online, and subscribe to The Development Newswire to receive the latest from the world’s leading donors and decision-makers — emailed to you free every business day.