High hopes of wider access to $3b IT spend
The Government is promising to make it much easier for younger and smaller businesses to win a larger share of the $3 billion it spends on information technology products and services each year.
Government Digital Services Minister Clare Curran said a new electronic marketplace would greatly reduce the barriers for businesses pitching for government work.
The marketplace would initially let agencies buy a range of cloud-based services promoted by suppliers, before expanding to include other technology-related goods and services, she said.
About 90 per cent of businesses that had tested the marketplace during trials were small and medium-sized firms, she said.
Government procurement has been a bugbear for suppliers in the sector for decades.
The previous Government pursued a policy of forcing agencies to buy IT products and services, including data centre infrastructure and contractor services, from pre-approved panels of suppliers at centrally negotiated rates.
But that was criticised by some for inadvertently creating closed shops and, in some cases, locking agencies into high prices.
Graeme Muller, chief executive of industry body NZTech, said it would be good to see the marketplace go live.
‘‘It does create what we have been calling for for a while, which is an even playing field,’’ he said.
‘‘While you could see it as an advantage for smaller New Zealand firms, it will also benefit larger firms, which are sick of spending lots of money trying to get onto panels and then not making it and having to wait 10 years.’’
An issue with the panel approach was that the price of cloud-delivered services was falling, so long-term arrangements could disadvantage government agencies.
‘‘It is a challenge for a government because it likes to reduce risk by defining everything it buys perfectly, but with the pace of technology it hasn’t been an effective model for a while.’’
A lot would come down to the design of the marketplace, Muller said.
‘‘But certainly the experience in the UK, which this is closely modelled on, has been very positive. So fingers crossed.’’