eServices Contract released!

Victorian government purchasers are required to engage suppliers of information and communication technology (ICT) products and services using a cloud based procurement platform called the eServices Register. The eServices Register provides a streamlined process for engaging suppliers of eServices.  It is mandatory to use for inner budget agencies and administrative offices as defined in the Public Administration Act 2004.

The eServices Contract was released on 8 April 2014,  it replaces an interim eServices Contract that was previously in place.  The contract was finalised after extensive consultation with various government and industry stakeholders.  The release of the contract means that government purchasers are able to approach suppliers for each procurement using a known set of terms. 

The contract is mandatory for use with all engagements under the eServices Register for  new procurements.  The interim contract can still be used for projects that were 'in flight'  at the date of the release of the final contract. 

What types of eServices are covered by the contract?

There are various categories of eServices that are covered by the eServices Contract.  These include:

• Professional Services - that is, ICT consultancy services;
• Cloud Services -  including Software as a Service (SaaS) or Infrastructure as a Service (IaaS) and related services;
• Implementation Services - the implementation of new software applications.  It does not cover the implementation of commercial off-the-shelf software;
• Development Services - the development of new software applications.  This does not include customising commercial off-the-shelf software;
• Hosting Services - the hosting of an agency's software application or website on a supplier's server;
• Managed Services - the management by a supplier of an agency's software application or function;
• Maintenance and Support Services - maintenance and support services in relation to software; and
• Hardware Services - maintenance and support services in relation to ICT hardware.  

The eServices Contract should not be used to purchase software licences (where there will be no associated eServices) or hardware.

Structure of Contract

The eServices Contract consists of the following documents (in descending order of priority):

•  the eServices Terms;
• the Contract Variables;
• the Purchaser's Request; and
• the Supplier's Response.

Each of these documents is explained below:

The eServices Terms

The eServices Terms are the standard terms and conditions for the eServices Contract.  The parties will not be able to negotiate or amend these terms.

The eServices Terms states that the Contract Variables, the Purchaser's Request and the Supplier's Response all form part of the contract.

The Contract Variables

The Contract Variables is the only document that can be negotiated by the parties.  It has been structured to enable the parties to specify:

• the particular categories of sServices that apply under the contract; and
• the specific arrangements that apply under the contract.

If the Contract Variables specify that specific categories of eServices apply, corresponding clauses in the eServices terms are adopted.

The Purchaser's Request

The Purchaser's Request is the document that invites suppliers to submit a bid for the services.  It is made available to suppliers via the eServices Register. 

It should specify, amongst other things, the scope of the services to be provided and the criteria that will be used to evaluate bids by the supplier. 

Common examples of a Purchaser's Request include:

• Request for Tender (RFT);
• Request for Quotation (RFQ); and
• Request for Proposal (RFP). 

The Supplier's Response

The Supplier's Response is the document that comprises the bid that has been submitted by the preferred supplier on the eServices Register in response to the Purchaser's Request.  This document would normally provide a description of the approach that has been proposed by the supplier in delivering the project.

Further Information

If you would like to access the eServices Contract, it can be found on the eServices Register Gateway.

To discuss the eServices Contract or the eServices Register generally, please contact:

Isabel Parsons

9947 1405

isabel.parsons@vgso.vic.gov.au

Sam Funnell

9947 1407

sam.funnell@vgso.vic.gov.au

Tina Lee

9947 1426

tina.lee@vgso.vic.gov.au

Nick Busietta

9947 1402

nick.busietta@vgso.vic.gov.au

Changes to the Public Private Partnerships guidelines

In May 2013, the Treasurer Michael O'Brien announced significant reforms to the Victorian Government's public private partnership (PPP) guidelines.  The new Partnerships Victoria Requirements, together with the National PPP Policy and Guidelines, apply to the next phase of Victorian PPP projects.

The areas of reform include the following.

Expanding the type of services that can be provided

The Government will consider expanding the type of services that can be provided under the PPP model to include services that were previously delivered by the public sector.  For example, the Ravenhall Prison Project (for which Expressions of Interest are currently being evaluated) will include custodial services provided by the private sector. 

Applying the PPP model to small-scale projects

Projects valued at less than $50 million may use a streamlined PPP model to generate private investment if they have suitable value for money drivers.  Alternatively, projects can also be bundled together to attract the PPP model.

Changing how value for money is assessed

The Public Sector Comparator (PSC) will continue to be used as a benchmark to test value for money for PPP projects.

However, if bidders do not meet the risk adjusted PSC cost expectations through the procurement process, this does not necessarily mean the Government will revert to traditional design and construct delivery.

Government must also now develop a scope ladder alongside each PSC.  Its purpose is to identify any scope items that bidders can remove or add should bids be over or under the PSC. 

Reducing bid costs

The reimbursement of partial bid costs for some PPP projects will be trialed.  Government will communicate its approach for reimbursement for a particular project at the time of releasing the Expression of Interest.  The Government may also consider reimbursing some bid costs incurred by losing bidders in exchange for intellectual property in their unsuccessful bid, on a project specific basis.

The new requirements are also aimed at process improvements, including to:

• minimise information submission requirements; 
• shortlist only two bidders where appropriate; and 
• avoid ‘best and final offer’ processes where possible.

Modified financing structures

The Government will consider making partial capital contributions for some PPP projects.  Normally, construction of PPPs is financed entirely by the private sector and repaid by the Government over the life of the project.  This change in policy is aimed at increasing private sector investment by providing an alternative to full private finance.

Government contributions could be made either as:

• milestone payments during construction (eg for large scale projects); or
• a lump sum payment once construction is complete. 

For more information about public private partnerships, please contact

Julie Freeman
Assistant Victorian Government Solicitor
t 9947 0404
julie.freeman@vgso.vic.gov.au

The ICT market in the cloud

If your Department is in the market for some information technology and communications (ICT) products and services, you’ll need to master the new eServices Register.

The Register replaces the eServices Panel and eServices Online.  It has been in place since 1 July 2013.  All Departments and agencies must use the new Register for any new ICT procurement.

Unlike the Panel, the Register is open to all companies that agree to the Government's terms and conditions. There is no limit to the number of suppliers on the Register, improving opportunities for small to medium ICT businesses. 

The Register is an online cloud-based portal that allows Government purchasers to provide feedback on service delivery.  Rather than using a formal system of rating for suppliers (which was thought to be too subjective and unfair), the Register allows Government purchasers to see what engagements a supplier has had with other Government project officers. This allows Government users to check with their colleagues about suppliers’ performance.

Purchasers must still define their requirements and issue a Statement of Work (specification) for suppliers to quote on. However, the entire procurement will be conducted within the Register portal.

Former Panel suppliers are already eligible to join the Register.  Joining the Register also enables suppliers to identify possible partners, particularly small and medium companies who may not be able to respond to a request on their own.

Departments have greater flexibility with procurements under the Register.  Use of the Register will be in accordance with departmental procurement plans.  Where department procurement plans are not yet in place, interim approach to market arrangements apply.  These have been determined by the VGPB.

The old online system is accessible only for the completion of existing Panel engagements, including completing end project reporting.

So which contract applies?

• All contracts commenced before 1 July 2013 will continue to be managed and completed under the existing eServices Panel contract.
• Between 1 July 2013 and 31 August 2013, an interim contract is available for use, which will be the same as the existing contract, subject to some small changes to reflect the new arrangements. These include removing references to lead agency oversight and the distinction in service categories. Further, the rates under the Panel arrangements no longer apply. This will be replaced by a new eServices contract. The interim contract and new eServices contract will not be mandatory to use.
• RFPs/RFTs issued by Government agencies before 1 July will continue to operate using the existing contract. Similarly, all existing purchase order contracts will continue to operate for the term of those contracts.
• The new eServices contract is being circulated for consideration. DSDBI has suggested that the new contract should be ready by 1 September 2013. 

For more information about ICT procurement, please contact

Sam Funnell
Managing Principal Solicitor
t 9947 1407
sam.funnell@vgso.vic.gov.au