UPDATED: NSW Government makes big changes to IT procurement

UPDATED: NSW Government makes big changes to IT procurement

Changes set to make life easier for SMBs and give IP rights back to suppliers

The NSW Government has announced big changes to its Procure IT program, which manages how it gets ICT products and services. The new system will take place from June 1.

The most prominent factor is a shift in the way intellectual property (IP) developed by ICT suppliers is handled. Under previous arrangements, the Government held IP rights to any software developed for it.

This resulted in independent software vendors and other developers being less inclined to provide solutions to the State Government as they couldn’t sell it to other organisations or Governments.

“Government agencies can still own the intellectual property when public interest dictates,” State Contracts Control Board Chairperson, Kerry Schott, said in a statement. “However the change will encourage increased industry investment and development of intellectual property.”

Schott claims the new framework will cut red tape, reduce costs and speed up the process of getting into a contract agreement with NSW Government. She also indicated SMBs would benefit from the changes to insurance requirements, which had previously been too onerous for smaller players.

“This will result in greater competition and better pricing,” Schott said.

According to Ovum public sector research director, Kevin Noonan, the changes to IP were similar to those made by the Victorian and Federal Governments. He claimed the SMB sector and the local software industry would be the biggest winners.

“Larger companies can afford to have lawyers that can unpick the differences between background IP, which is property they bring to the project, and foreground IP, which is what they create during the project,” he said. “For small companies this is an incredibly subtle difference and it only serves to get them into all sorts of legal problems if they unintentionally step over the mark.”

Noonan also said the insurance changes meant many more SMBs could now afford to make bids for NSW Government ICT tenders. But he warned it would not automatically result in more SMBs winning projects.

“At the moment there’s a large number of SMBs that are completely invisible to government because they choose not to bid,” he said. “At the end of the day it doesn’t change…whether the requirements are small business friendly or not. But this really takes away one clear and obvious impost to industry.”

The Australian Information Industry Association (AIIA) has already come out in support of the changes. Its CEO, Ian Birks, said it was a result of collaboration between the industry and Government.

“The real value of this framework will be to create an environment where industry can respond flexibly and quickly to the needs of government,” Birks said in a statement. “Both the government and the ICT sector stand to reap the rewards of a more efficient system that delivers better results.

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Tags NSW GovernmentAustralian Information Industry Association (AIIA)Procure IT

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