Streamlining Procurement: Data Centre as a Service
Data Centre as a Service (DCaaS) is the next tranche of work in the Data Centre Strategy. We have been putting a lot of thought into how we can simplify procurement of and reduce transaction costs for cloud and cloud-like services while ensuring that we still meet the necessary procurement requirements. Today’s post is the outcome of this work.
In November 2011, we invited industry to address our cross-agency reference group. Thirty-four companies took part and others provided written responses. The industry presentations helped explain the benefits of cloud computing for the Australian Government and demonstrated to us that cloud offerings are maturing. Our approach to sourcing these services needs to ensure that agencies can consume new services as they become available. We have determined that a standard panel approach will not meet this requirement. Instead, a new approach needs several important characteristics:
- Flexibility: New services and suppliers should be able to be added regularly and without another full approach to market. Agencies should be able to choose whether to use the service;
- Agility: The use of a standard, relatively short, head agreement (signed once upon joining the arrangement) and templated quotations, responses and work orders should allow agencies and suppliers to increase the speed of procurement;
- Balanced Risk: The services should be capped at $80,000 and/or 12 months to reduce the risk exposure and remove the need for complex contracting and related legal arrangements. For example, we are considering whether compulsory arbitration should be a feature of the dispute resolution mechanism to lower the risk of legal costs exceeding the value of the contract;
- Pre-Qualification: The use of a standard method for suppliers to join the arrangement, including simplified financial checking procedures and verifiable references, should give agencies confidence that they are dealing with reputable suppliers. A simple post-delivery assessment by agencies, collated centrally, should build the bona fides of regular suppliers and identify those that are proven to lack the appropriate capability.
- Ease of comparison: By allowing suppliers to characterise their services in a quantifiable manner, agencies should be able to choose the types of services they seek from a menu of suppliers.
The attached documentation provides detail about the proposed approach. Remember, we are seeking your comment on these matters. Your views are crucial in assisting us to develop an arrangement that suits the needs of both government and industry. To assist you, the lines in each document are numbered so comments can be easily referenced. You can post your comments on this blog or email the team (email@example.com) by 30 April 2012.
- Draft DCaaS Project Sourcing Approach DOC (91KB)
- Draft DCaaS Project Sourcing Approach PDF (225KB)
- Draft DCaaS Project Head Agreement DOCX (98KB)
- Draft DCaaS Project Head Agreement PDF (319KB)
[Update 3/4/12: Sourcing Approach files updated to correct a dead footnote link on p3]
[Update 5/4/12: Sourcing Approach files updated to correct dollar amount in clause 36]
If you are wondering where to start, consider your views on these two issues:
- Would your company accept compulsory arbitration to resolve disputes for contracts under $80,000?
- Would you pay a nominal fee to join the arrangement, say no more than $250, in order to ensure government resources weren’t dissipated in processing applications from highly speculative suppliers?
As part of the consultation, we’ll be conducting a series of industry presentations on DCaaS – watch for details here and on AusTender. The DCaaS Application for Inclusion is planned for release on AusTender by the end of June 2012.
Finally, assuming comments are favourable, we’re also considering a similar approach for an ICT services multi-use list to replace the current arrangements (as discussed in the Portfolio Panels post).
I look forward to vigorous discussions.