A new government payroll services marketplace will be open from 30 November to receive applications from suppliers to list their products and services.
The move is part of a broader effort that kicked off last year by the government chief digital officer (GCDO) to ensure investment by government agencies in payroll systems was sound.
The payroll marketplace will include specified commercial arrangements negotiated with qualifying payroll suppliers, called collaborative marketplace agreements (CMAs).
These prescribe the forms of agreement agencies enter into when purchasing, according to this flowchart.
These CMAs are what the Department of Internal Affairs calls a "common capability contract" as defined in the government procurement rules.
Agencies that purchase under the CMAs can do so, regardless of the value of their purchases, without having to undertake an open primary procurement or negotiating their own contracts.
The GCDO is coordinating payroll procurement aiming to make government more effective by setting a good practice benchmark for payroll functions.
Payroll has been a bugbear in government over recent years as central and local government agencies, as well as many private sector organisations, discovered they had been miscalculating holiday pay for years, creating large unbudgeted liabilities.
In the 2019 Budget, the government voted $82.3 million to address such issues.
The overall effort aims to deliver cost savings by avoiding the development of bespoke payroll processes as well as by simplifying procurement.
The GCDO's programme team said it had validated the New Zealand government’s payroll process model with agencies and suppliers and made changes to ensure it is fit-for-purpose.
This informs government's requirements for payroll and payroll-related enterprise software, payroll and payroll-related managed/outsourced services and payroll professional services.
Earlier this month, the Department of Internal Affairs (DIA) gave notice that it intended to make changes to several of its existing CMAs and published marked up versions of each.