Resellers say the standard of service given to smaller government agencies may decline if a Centre of Expertise appoints large PC manufacturers to a supplier panel for the Department of International Affairs (DIA).
The recent request for proposals (RFP) by the IT Centre of Expertise (CoE) seeks prime suppliers of notebooks, desktops, peripherals and services.
The tender document states that a key objective for the supply agreement is the delivery of a “transparent hardware solution with optional services packages”, to allow the agencies within the Department to “compare and contrast their current methodologies against the services options provided through the agreement and to use the most cost effective approach in each instance”. It also lists cost transparency of traditionally bundled solutions as a critical success factor in the RFP.
Respondents have the opportunity to bid for distinct ‘lots’ – desktops, laptops/notebooks, tablets and associated services.
Lexel Systems’ CEO Noel Simpson says the RFP reads as though vendors could potentially be selected as providers, and dealt with directly by DIA agencies. He estimates there might be 50 or more resellers, including seven large partner companies, that currently serve as providers to the agencies.
Simpson says the CoE could potentially appoint a panel of about three vendors and perhaps one or two resellers.
He believes larger hardware providers such as multinational manufacturers might be slower and less responsive in providing services to DIA agencies, in particular the smaller ones.
“If [the agencies] can make a five to 10 point cost saving up front, will they save that amount by the time they spend time dealing with larger organisations that are less flexible? That generates additional cost within the purchasing organisation.
“Large manufacturers have stricter processes and rules – they won’t be as flexible as a reseller within New Zealand would be. On face value, dealing directly with a vendor is a positive thing potentially, but there is a trade off. My concern for the smaller agencies is whether they will get the same service and response that they presently do.”
Maclean Computing chairman Allan Maclean says while his company is focused on the midmarket rather than the government space, he feels sorry for smaller hardware and services providers who might be cut out as suppliers.
“Dealing with bigger manufacturers is the way of the world. The government is the biggest business in the country and it’s inevitable it needs to drive costs down.
“The smaller agencies will suffer but that is part of the inevitability of a centralised government system.”
Axon CEO Scott Green says respondents taking a ‘one size fits all’ approach to services is unwise, because the participating agencies have such diverse requirements.
“Responding without any reference to the partner services is a high-risk strategy. Trying to bundle services on any particular hardware is a probably equally high risk. Agencies have different service requirements so it might look attractive in one scenario, but very unattractive in another.”
Green believes the RFP leaves questions about how the agencies will get an “optimised configuration” in terms of hardware and services.
“No-one will ever take a bare bones box and none of the services, there will be a requirement for both in similar quantity,” he told Reseller News at the time of writing. “There are questions about how they’ll get an optimised configuration, with ‘this hardware proposition here’ and ‘that services proposition over there’. It’s very unclear at this stage.”
Green says there may be a perception there is more margin available to hardware manufacturers and services providers than there actually is.
Datacom CEO Greg Davidson says price advantage comes from buying large hardware volumes, “but the flip side is other value that resellers can add”.
He says the Department may not get price advantage because the supply of desktops has become so commoditised.
“There are many examples where there are advantages in economies of scale by combining procurement, such as network linkages and datacentre colocation, but in this environment you wouldn’t get a lot of advantage.”
Clarifications to the tender listed online say only those who respond to the first three ‘lots’ can respond to lot 4 – associated services.
“Differing agencies have differing needs for the services provided within the contract,” one clarification states. “By unbundling the services Government is better able to understand the compartmental costs of delivery and easily compare and contrast market offerings. It also easily enables the agencies to select only those service offerings that it wishes to procure.”
One enquirer also sought clarification on how the CoE will work towards enhanced participation by New Zealand businesses, which is one of four major themes of the government’s procurement reform programme.
“The CoE is expected to act under government procurement policy and within the Mandatory Rules, as such we must accord all suppliers equal opportunity and equitable treatment,” the clarification read in response. “We must make procurement decisions on the basis of value for money of goods and services to be supplied, and not on the basis of their place of origin or the degree of foreign ownership.”