ICT Procurement Framework

Guidance
A central resource that underpins and guides good practice in ICT procurement.
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As the functional lead for procurement in the WA Public Sector, the Department of Finance supports improving procurement practice across the sector. The implementation of the Procurement Act 2020 (the Act) and the Western Australian Procurement Rules (the Rules) have changed the WA public sector procurement framework. The changes provide a great opportunity for better practice in all streams of procurement to achieve value for money outcomes for the Western Australian community.

Information and Communication Technology (ICT) has been one of the most challenging streams of procurement historically. The Public Accounts Committee report “Doing ICT Better” outlined a number of issues including:

  • the fast pace of technological advancements, meaning that traditional contracting models may not always be suitable;
  • business needs not being properly understood with requirements being inadequately scoped before proceeding with procurement; and
  • innovative solutions being prevented due to:
    • a tendency to over specify
    • overreliance on ownership
    • a risk averse culture in the public sector.

Since this report was finalised, the Digital Strategy for the Western Australian Government 2021-2025 has been released which aims to make it easier and safer for WA people and businesses to deal with Government. It will drive better service delivery by integrating and streamlining government services and regulatory processes.

Finance is aware that many agencies face challenges when procuring ICT and in response, are leading the ICT Procurement Improvement Program. This program will deliver the ICT Procurement Framework (the Framework). The Framework is a central resource that underpins and guides good practice ICT procurement. Subsequent resources seeking to improve ICT procurement in the WA Public Sector will align to this Framework and the principles within it.

The Framework

The Framework takes a principles-based approach to drive good practice ICT procurement and defines the responsibilities of stakeholders in the public sector. It is intended to be a resource that guides both at an agency level, as well as for the individual officer involved in the procurement and/or management of an ICT contract. It is critical that both procurement professionals and ICT subject matter experts are involved in the procurement process to ensure the best possible outcome is achieved.

The Framework:

  • complements and does not replace or override any items in the WA Procurement Rules, Procurement Directions or any other procurement connected policy;
  • applies to the entire procurement lifecycle, from pre-investment decision through to contract management;
  • has been designed to be a whole of sector resource and will likely need adapting to suit individual agency needs, based on the size, complexity, and risk of their ICT contracts portfolio; and
  • has been developed in consultation with the Office of Digital Government and key personnel involved in the procurement of ICT across the WA Public Sector.

Additional support resources, including practical tools, templates, and contemporary contracting terms and conditions, aligned with this Framework will be made available to agencies over time. The first initiatives that will be progressed aim to address issues related to insurance liabilities and proof of concepts.

Whilst the Framework applies to all ICT procurements, it does not override individual requirements under existing agency contracts, including Common Use Arrangements (CUAs). Contact the relevant contract manager for further information about a CUA, including buying rules; exemptions and what is available to be procured under a CUA.

Defining ICT

ICT goods and services refers to all types of software and hardware that has a primary purpose of enabling the capture, storage, retrieval, transfer, communication, or dissemination of information (including cloud and telecommunications). It includes professional services in relation to planning, development, implementation, maintenance, and support services relating to ICT.

Whilst the term ‘digital’ aligns with Government’s desired future state, this Framework will continue to use ‘ICT’ until the public sector has matured, and the term ‘digital’ is more widely accepted. This is expected to occur as progress is made in the current improvement program.

Feedback on the Framework

As it is the first time such a Framework has been implemented in WA, Finance is keen to hear feedback on the document and will make iterative amendments over time to ensure the Framework is contemporary and fit for purpose. Please contact procurementadvice@finance.wa.gov.au with any suggestions for improvement. Recommendations from any future reports or reviews will also be assessed to determine their impacts on the Framework.

ICT Procurement Principles

When undertaking ICT procurements officers must act ethically and with integrity, and must seek the best value for money, which considers:

  • Government’s social, economic and environmental priorities (see the Social Procurement Framework for more information);
  • cost; and
  • other relevant non-cost factors.

The following ICT Principles should be adhered to by agencies when developing ICT procurement strategies and strategic decisions about their ICT contract portfolios, as well as by officers when undertaking individual procurement processes. Further information on applying these principles at different stages of the procurement lifecycle is provided under ‘Considerations when implementing ICT principles’.

Promote SMEs and local businesses

Opportunities to support and engage with local businesses and small to medium enterprises (SMEs) should be explored. This includes but is not limited to:

  • using mechanisms that encourage the engagement of SMEs and local businesses; and
  • removing barriers to their participation in government contracts.

Where a large organisation needs to be engaged, consideration should be given to how the organisation partners with small and local providers to deliver the requirement.

In addition, note the requirements of the WA Buy Local Policy and the Western Australian Industry Participation Strategy.  

Outcomes focused

Requirements should specify the outcomes being sought, not the solution, process or outputs.

Outcomes should be:

  • sufficiently broad so as not to restrict potential solutions;
  • not so broad that they could be open to endless interpretation; and
  • timely.

Flexibility, agility and innovation

Procurement should be flexible enough to adapt to changing requirements and adopt innovative technologies. This approach can result in opportunities to deliver services in better ways. Standards that promote interoperability should be adopted.

Risk relative

Risk should be mitigated and managed throughout the process. The level of risk management should be appropriate based on the size, scope and nature of the procurement. 

A risk assessment should be undertaken for all procurements.

Agency Level Enablers

Whilst this Framework can be applied to individual procurement processes, it is critical that agencies are appropriately structured to enable success. Without the appropriate agency level mechanisms in place, it is unlikely that individual ICT procurement processes will be able to drive the required outcomes.

The below items are considered necessary for good practice ICT procurement at any agency level. Note that the five pillars are consistent with the Western Australia Contract Management Framework Principles.

People
  • The technical expertise, competencies and experience within the agency are appropriate for the ICT procurement function to perform its role effectively. This includes both ICT experts as well as procurement professionals.
  • Roles are defined and responsibilities are clearly articulated.
  • There is a willingness to commit resources to ensure appropriate capacity.

Governance
  • Structures appropriately balance enabling good outcomes with policy requirements.
  • Internal controls and systems support appropriate risk management.
Practice
  • Suitable tools, guiding resources and defined processes drive the consistent application of good practice in ICT procurement.
  • The organisational culture encourages innovation and is open to new ways of doing things.
Strategy
  • The approach to ICT procurement aligns with agency and wider Government objectives.
  • Where applicable, whole of government approaches are supported and championed.
Performance
  • ICT procurement performance is continuously evaluated and actively managed to deliver value for money outcomes.
  • Appropriate performance measurement and management mechanisms are in place.

 

It is acknowledged that some smaller agencies may not currently have the resources to be able to meet all of the above enablers. Throughout the improvement program, Finance will work with stakeholders to explore the best way to leverage capability and share knowledge across the sector to deliver quality outcomes in ICT Procurement.

Considerations when implementing ICT Procurement Principles

The table below outlines considerations for applying each of the ICT Procurement Principles throughout the procurement lifecycle.

  Promote SMEs and Local Businesses Outcomes Focused Flexibility, Agility and Innovation Risk Relative
Define
  • Could larger work packages be split into multiple individual contracts to encourage SME engagement?
  • Could the procurement be used to support a Social Procurement Framework initiative?
  • What is the impact, change or benefit that is being sought?
  • How does this project link to wider agency and Government objectives?
  • What does success on this project look like?
  • What is the problem?
  • Is an innovative and agile solution appropriate for the problem?
  • What will be the flow on effects for the agency of an innovative solution (e.g. intellectual property, internal process changes)?
  • What is the risk appetite of the agency and wider Government related to this problem?
  • Is this project impacted by the agency’s cyber supply chain risk management approach?
Explore
  • Understand the local market:
    • Who are the players?
    • How big and mature is the market?
    • Are there any registered Aboriginal businesses or Australian Disability Enterprises?  
  • Where could Government’s buying power be leveraged to build local capacity?
  • Can the market achieve the desired outcome/s?
  • Can the outcome be achieved through a traditional procurement method, or will an alternative method of procurement be needed?
  • Is an innovative procurement solution appropriate?
  • Is the solution flexible enough to allow for modifications?
  • Is there a CUA or co‑operative procurement arrangement that can be leveraged?
  • What are the risks?
  • How are risks mitigated?
  • Has an accurate analysis of the risk profile been undertaken?
  • What are the agency’s policies on data offshoring, and other regulations that apply to data or operations?
Consult
  • Are there any stakeholders with local market knowledge who could be consulted (e.g. a local content advisor, a chamber of commerce association, peak industry group)?
  • How have other agencies or jurisdictions done this?
  • What are others within the agency doing?
  • Who needs to be engaged to determine the required outcome?
  • Can industry be engaged early to determine their capacity and/or willingness to deliver?
  • Are there any innovative solutions that exist in the market? 
  • How could innovative solutions from the market be encouraged?
  • What risk mitigation strategies are appropriate?
  • What risk mitigation strategies have been used before?
Plan
  • Are there any barriers to participation? 
  • How could larger organisations be encouraged to engage local SME partners?
  • Are the specifications outcomes-focused and are they clear and easy to understand?
  • What is the appropriate contract term?
  • How can flexibility be built into the contract?
  • Do the specifications allow and incentivise innovation and flexibility?
  • Have ICT specific risks (i.e. cyber security) been considered?
  • Are the risk mitigation strategies appropriate to the size and risk of the project?
  • How should risk be balanced between the agency and supplier?
Procure
  • Would an early tender advice, a request for information or a draft request for comment be beneficial to SMEs or local businesses?
  • Is the Request open for an appropriate amount of time to allow SME participation? 
  • Does industry understand the desired outcome/s?
  • Are the evaluation criteria appropriate to assess whether respondents can deliver the required outcome?
  • Has the procurement process been structured in a way that enables innovative solutions to be considered (e.g. iterative evaluation approach, appropriate evaluation criteria)?
  • Does the Request include appropriate insurances and liability clauses?
  • Are there clear descriptions of roles/responsibilities and escalation processes to manage risk?
  • What due diligence is required prior to contract award?
Manage and review
  • Were the measures undertaken for SME and local business engagement effective and efficient?
  • Did the local market respond to the procurement in the way it was expected to?
  • What are the lessons learnt for future engagement?
  • Is the defined problem/s and outcome/s still valid?
  • Have the outcome/s of each phase been delivered on? If no, what changes are needed?
  • Is there ongoing engagement to encourage continuous improvement throughout the term of the contract?
  • Has the contract delivered on the required flexibility? If no, what changes are needed?
  • Has a regular review system been established?
  • What risk management strategies are in place?
  • Are risks managed as soon as possible after they arise?
  • How is due diligence on contractor’s IT controls processes and standards being undertaken?

 

Roles and responsibilities across the ICT Procurement Lifecycle

The table below provides agency staff with an overview of their responsibilities when undertaking an ICT procurement process, noting that individual processes may require different efforts. The Framework also includes suggestions on how to incorporate the ICT principles into the process.

ICT procurements need to comply with the Western Australian Procurement Rules and other procurement connected policies, including Buy Local Policy and the Western Australian Industry Participation Strategy.

  Procuring Agency

Department of Finance

 Office of Digital Government (DGov)
Define
  • Works with end users, subject matter experts, ICT, policy, risk and procurement experts to define the problem and articulate the desired outcome (the impact, change or benefit).
  • Understands internal processes and who is responsible for them in case there changes required as part of the solution that is procured.
  
  • Provides assistance to ensure ICT procurements align with the Digital WA Strategy 2021 – 2025.
Explore
  • Explores ways to achieve the desired outcome and identifies a preferred approach, including non-procurement options (e.g. internal process change).
  • Where procurement is being considered as an option, undertakes research to understand the relevant market and how it operates.
  • Identifies any digital specific risks (including cyber security).
  • Research government agencies in other jurisdictions.
  • Based on risk assessment, considers the potential need for probity advisors.
  • Provides advice on procurement options being considered.
  • Establishes and advises on ICT CUAs that can be leveraged.
  • Advises on leveraging existing whole of government capabilities in areas such as digital identity, payments, notifications, smartforms, workflows, self-service portal, the ServiceWA App, the Data Hub and data linkage system.
  • Provides guidance and mandates on cyber security and hands-on support through the Cyber Security Operations Centre.
Consult
  • Consults with Finance, DGov and industry on the desired outcome and potential solutions.
  • Consults with internal finance area and/or Treasury to ensure sufficient budget.
  • Identifies co-operative procurement opportunities and determines whether there are existing common whole of government platforms that could be utilised.
  • Finalises the business case to reflect consultation outcomes and ensures continued alignment with the problem statement and desired outcome.
  • For procurements over $10 million, consults Gateway team as early as possible to discuss review process. High risk programs under this threshold can request a Gateway review.
  • Provides advice and guidance on the procurement process.
  • If applicable, the Gateway Review team consults with the procuring agency to schedule reviews (which may occur at different stages in the project lifecycle).
  • Provides approvals to establish or vary a cooperative procurement arrangement.
  • Provides input during the planning and writing of the business case to ensure strategic alignment to the Digital WA Strategy 2021-2025 and to help agencies leverage available whole of government capabilities.
  • Advises on whether any similar requirements are being considered by other agencies.
Plan
  • Plans approach to market, and considers non-traditional procurement methods (such as proof of concept), whilst complying with the WA Procurement Rules.
  • Considers a contract term that best allows a return on investment.
  • Ensures all internal approvals and policies are met.
  • Plans for appropriate procurement and change management resourcing.
  • Considers brand agnostic solutions in the first instance to avoid vendor lock-in.
  • Seeks advice and support from SSO and ICWA (if required).
  • Considers whether any internal process changes are required to enable the success of the solution being procured.
  • For procurements over $5 million, facilitates procurement planning through procurement plan development.
  • Provides technical expertise in relation to the procurement process, including alternative procurement methods.
  • Administers the State Tenders Review Committee that provides procurement strategy assurance.
  • Provides assistance to ensure the procurement aligns with the Digital WA Strategy, but there is no requirement for the Procurement Plan to be reviewed by DGov.
  • May provide representation as non-voting evaluation members on some large, complex ICT projects.
Procure
  • Undertakes the procurement process, as per the WA Rules.
  • Endeavours to have specifications that are outcomes focused and encourages adherence to the Social Procurement Framework including local business and SME engagement.
  • Consults with potential respondents (within probity constraints) to ensure requirements are understood.
  • Facilitates the procurement process and provides procurement related advice throughout.
  • Administers the State Tenders Review Committee that provides assurance on the evaluation process and that the outcome represents value for money.
  
Manage and review
  • Manages the contract.
  • Outlines the process for transitioning in/out of the contract and actively manages the process.
  • Undertakes a contract review process to inform the next procurement process.
  • Undertakes handover of contract documentation to agency.
  • Provides templates, web guidance and training to support contract management.
  • Assists with guidance and artefacts to enhance the evaluation of ICT services delivery models.

 

  Resources and information Outputs
Define
  • Problem statement
Explore
  • Draft business case or options analysis (as applicable)
Consult
  • Signed business case / authority to procure
Plan
  • Procurement plan
Procure
  • Request for comment, information, proposal and/or tender
  • Early tender advice
  • Evaluation report
  • Negotiation plan and contract letters
Manage and review
  • Contract management plan
  • Contract review

 

Published

15 September 2022

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Topic

Procurement
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