Published on the 14/08/2018 | Written by Heather Wright

But will agencies embrace ‘buy Kiwi’?…

A new Government IT procurement marketplace may help put ‘buy Kiwi’ back on the radar for government agencies – and open the door for small Kiwi companies to grab a share of the $3 billion annual government ICT spend.

After six months of testing, the long mooted ‘government digital procurement channel marketplace’ will go live soon, initially providing government agencies with access to a catalogue of software-as-a-service public cloud offerings, before being expanded to offer other products and solutions.

“Momentum needs to be maintained to ensure work is done to improve the culture around procurement across Government.”

The Marketplace is being hailed by Government Digital Services Minister Clare Curran as ‘an example of transformational thinking in action’ and a way to dramatically reduce barriers for suppliers and enable smaller New Zealand-based companies to get a look in when it comes to government ICT deals.

More than 90 percent of the around 30 companies involved in the testing of the new marketplace, which is the result of a six month co-design process with local ICT industry and government agencies, were small or medium-sized New Zealand-based companies, Curran says.

Government ICT procurement policies have long been under scrutiny. Traditional RFP processes are prohibitively expensive for smaller, local, players.

The all-of-government panel model used here in recent years has also proved problematic. It required government agencies to buy from pre-approved panels of suppliers. However, for suppliers there were high costs involved in getting on the panel and the panels locked for a number of years – meaning unsuccessful panelists – both large and small, local and international – found themselves locked out of government deals for those years.

Entry criteria for suppliers for the new marketplace weren’t disclosed, but the government has been stressing the inclusiveness of the new system, which will be open to any eligible suppliers, local or international, including those who don’t have existing government contracts.

“One of the guiding design principles of the Marketplace is for a platform that by default is open to all suppliers meeting the entry criteria,” the Marketplace site says. “We anticipate the simple application process and low-barrier to entry will provide smaller suppliers a good opportunity to present their products to government agencies.”

In the year to 30 June 2017, 76 percent, or 102, of the All of Government suppliers, were Kiwi-owned. Those companies, which include Spark, Revera, Kordia, Mobile Mentor, Provoke and NVinteractive, claimed 60 percent of the $323 million in AoG spend.

Curran says the marketplace will dramatically reduce barriers for suppliers, while also making it easier, quicker and more cost effective for agencies to access a full range of digital capabilities.

“Together we can change procurement into a much more flexible, agile process taking advantage of what digital platforms can offer and making it easier for organisations, especially small and emerging suppliers, to work with government,” she says.

“We want our ICT community to grow with New Zealand, to contribute to our economy and to continue supporting greater social inclusion and better public services,” she adds.

But while the marketplace opens the doors for a wider range of companies to offer services to government agencies, warnings have already been sounded.

In this week’s NZ Tech newsletter, Graeme Muller, NZ Tech CEO noted the launch of the marketplace, but also cautions that momentum needs to be maintained to ensure work is done ‘to improve the culture around procurement across Government, otherwise it will be rhetoric’.

It used to always be said that you couldn’t get fired for choosing IBM. For some there still appears to be a preference for going international – and big business – when it comes to IT buying. In offering up a marketplace packed with local vendors, the government is providing a chance for agencies to support local businesses and help grow local capability. Now it’s over to them.