Government procurement problems rankle in tech world

By David Donaldson

Friday August 7, 2015

Amid the countless invocations of the mantras of disruption and innovation at last week’s Disrupt the Public Sector conference in Melbourne, one frustration stood out: the difficulty of working with government procurement processes.

In particular, some of the technology solutions needed to tackle complex problems present a challenge for traditional procurement methods, as it can be hard to define all the details of a product that is designed to change and adapt.

Grantly Mailes
Grantly Mailes

“With the procurement system, you need a PhD to run it and to participate in it and if you do the slightest thing wrong things start going very badly wrong,” said Grantly Mailes, outgoing deputy secretary at Department of State Development, Business and Innovation.

“It’s very difficult to procure things that aren’t pens and paper … It’s easier to procure a multi-million dollar something that’s easier to specify. It’s very difficult to buy the $5 per user per month stuff,” he told the event, part of the Victorian government’s Innovation Month.

‘The real piece of disruption is who pays’

One anecdote highlighted the difficulty of joint procurement. Kirsty Elderton of FutureGov related the story of the frustrations around government figuring out how to procure FutureGov’s Patchwork system. Because Patchwork is designed to be used by multiple agencies, there is currently no real method for jointly procuring it.

Elderton described Patchwork as being “like LinkedIn” for service providers, allowing practitioners to easily track down the contact details for others working with a client.

The aim is to solve the well-known problem of, for example, those providing drug counselling, family violence, welfare and education services to one family not knowing about the involvement of other providers. It’s expected that facilitating contact between practitioners could improve outcomes for some of society’s most vulnerable, as well as saving practitioners the several hours per week many spend trying to track down colleagues.

Kirsty Elderton
Kirsty Elderton

But, Elderton told the audience, “because any agency can be on Patchwork, the real bit of disruption for a project like Patchwork is nothing to do with the tool, actually. The real piece of disruption is who pays. We didn’t know that at the beginning.”

She described the process of figuring out how to procure the software as like a ball bouncing around between different parties.

“What happens with Patchwork is we go to the MAV [Municipal Association of Victoria], who commissioned it, and the MAV go ‘yeah, okay we need DHS to be on board’. DHS go ‘oh, we’re gonna need Education’, and Education go ‘we need to chat to Premier and Cabinet about that’. Premier and Cabinet go ‘oh we’d better just chat to the guys at FutureGov about that’ — who’s going to pay?! Who pays for this thing?

“And that ball is bouncing around Victoria as we speak, because there is no one who knows how to jointly procure something for a whole of government response to one problem,” she explained. “I think the idea that no one knows the answer to that question is frightening.”

Elderton suggested the current system was not delivering.

“[Patchwork] probably cost for the whole of the state of Victoria about $500,000. I was reading in the VAGO [Victorian Auditor General’s Office] report that there’s something like $1.8 billion being spent on tech and comms in Victoria. I don’t see that amount of value anywhere, in any of the tech I see,” she said.

“That ball bouncing around is where the disruption really is. Because if you can solve that problem, it doesn’t just solve it for Patchwork, that solves a whole bunch of problems. When we started this journey, we didn’t know where it would lead. We knew we were doing a good thing and we had the right methodology and that we’d got a good product, because practitioners tell us ‘this will change our working practice’.

“FutureGov are holding that ball and we are knocking at the door regularly, because it’s too important. And it is a bit annoying for people in Department of Premier and Cabinet, but guess what? Suck it up. It’s a big problem that needs solving.

‘They want to specify how many USB ports are on a computer’

Another theme that emerged was the reluctance of some procurement or technology departments within agencies to cooperate in implementing change.

“It’s bonkers that six people in a procurement team control what tools 5000 people in an organisation might use,” said Elderton.

“That’s nuts, that’s crazy. Why would you do that? You wouldn’t design that. Increasingly we’re having conversations that people want to fill it differently and mostly the leaders in organisations that I meet with are really hacked off with procurement and want to try something differently.”

But she does think things are improving and the public sector is becoming more comfortable with the idea that providers may not be able to nail down every last detail for how a system may look down the track.

“We’re very upfront that none of our products are finished. The world changes, we develop them and iterate them, we clean monthly and push new deployments all the time. If you asked us to specify what one of our things might look like today and what it will look like in two years’ time, I couldn’t give you a hand-on-heart answer,” explained Elderton.

“I’ve got an idea of what the themes are that are emerging, and what the problems are we’ll be tackling, but I couldn’t go 100% it would be that. And we’re alright about that. A lot of our work is around helping organisations to understand that that’s okay.

“… I think it’s changing. Two or three years ago it would have been, ‘no way, you need to reply to this spec’. Now I think two things are happening: they’ll say we’re really interested in this type of working, we’ll pay you to do a little bit of discovery work to see where that leads us and we’ll test the water. That’s one method and that’s useful. It’s a good test for suppliers, whether they’re in the right place and able to work in that way.”

Paul O'Connor
Paul O’Connor

Paul O’Connor, who previously worked at the Victorian Auditor-General’s Office and Australian National Audit Office, spoke of the need to avoid the situation where the procurement system had a lot of rules “and people were just following the rules without knowing why they were there anymore”.

He recalled that when he first moved to the Victorian public service 12 years ago from the Commonwealth, he was surprised at how innovative it was — though “it’s now as bogged down as it ever was.”

Too much procurement is still based on specifying technical details, rather than functions. “In the technology space, which has frustrated me incredibly in the last seven years I’ve been reviewing it, they’re still back in the 1950s Department of Works. They want to specify how many USB ports are on a computer. It’s like what are you talking about? Let’s talk about the effect, the usage,” said O’Connor.

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[…] Speakers revealed the frustrations of dealing with outdated government procurement processes at the Disrupt the Public Sector conference last week.  […]

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