The NSW Government is expected to introduce minimum participation levels for local companies in large-scale public sector technology projects to ensure it gets maximum impact from its $1.6 billion investment in government digital infrastructure.
The $1.6 billion tech stimulus was announced by Premier Gladys Berejiklian last month and is being delivered through its Digital Restart Fund, originally set up as a $100 million pool of money last year to encourage whole of government thinking in the design of digital services.
The funding included $1 billion in new money, and $600 million of redirected savings that will now be used to accelerate the state’s digital service delivery program. It also included $240 in new money being directed at building cyber security capability.
The funding is the largest ever single technology funding initiative by a government in Australia. The government focus now is to not only making that the funding delivers better digital service outcomes but improves local industry capability.
This would mean rather than the $1.6 billion of public money simply being transferred to large multinational providers like Salesforce, Microsoft and AWS, procurement policy rails are to be put in place to deliver mandated minimums to local companies.
Government’s like the UK have mandated 20 per cent minimum participation for local SMEs, and used programs like its successful Small Business Research Initiative (SBRI) to build a healthy GovTech sector.
NSW Customer Service Minister Victor Dominello will use a speech to an Australian Information Industry Association (AIIA) online event to provide clarity on the procurement levers being put in place to deliver those industry outcomes.
“Ultimately at the heart of this [$1.6 billion package] is a stimulus – an economic stimulus – so ultimately, we are wanting to make sure that a fair chunk of this goes to SMEs,” Mr Dominello told InnovationAus.
“If you look overseas, the UK is looking at about 20 per cent. I am waiting on our taskforce to make recommendations about what the spend parameters [in NSW] should be,” he said.
Under a new approvals process for digital projects announced last year, spending programs across government would need to pass through not only the government’s Expenditure Review Committee, but also the newly-formed Delivery and Performance Committee (DaPCo).
The five-member DapCo is co-chaired by Mr Dominello and Premier Berejiklian, and includes Treasurer Dominic Perrottet, Deputy Premier John Barilaro and Deputy Nationals leader Paul Toole.
Mr Dominello says the large government tech suppliers are on notice, that DaPCo wants the public service to restructure its relationships with vendors to both ensure digital capability transfer, and the improved opportunities for local SMEs.
“So in the same way that you would go to the Expenditure Review Committee and have to prepare a busines a business case, you have to prepare a clear performance architecture for DaPCo, and that includes putting a ‘customer lens’ on [the project], the digital design, the data architecture and the procurement profile,” he said.
“When you’re seeking vendors to provide assistance – products and services – I don’t want any more parasitic relationships where the vendor comes in, builds something, and then hands it over [to the government department or agency].
“I want more of a partnership model – and I have been quite strident about this – so that the vendor helps build capacity in the public service.”
Mr Dominello said he wants the state’s public sector to “dream bigger” and to get more creative about what they ask from vendors.
The procurement focus is about to change for public sector leaders putting proposals through the ERC and DaPCo process in relation to the $1.6 billion in new digital project funding.
“One of the things that I am focused on here is sovereign procurement,” Mr Dominello said.
“[Project leaders] need to show me that they have thought this through and that they are working with local industry,” he said. “Because at the end of the day, at its heart, this is economic stimulus.”