Former CEO of the Federal Government’s Digital Transformation Office (DTO), Paul Shetler, has called for a major overhaul of the country’s public sector IT procurement regime, suggesting it should cap what it spends on external consultants.
Shetler was recruited by Prime Minister, Malcolm Turnbull, to head up the DTO, the predecessor of the Government's Digital Transformation Agency (DTA), but left the role just weeks after the DTO became a fully-fledged Government agency, during which time he had been appointed as the Federal Government's chief digital officer.
Today, the DTA oversees much of the Federal Government’s IT procurement operation.
In submission to the Parliamentary committee looking into the digital delivery of government services, Shetler -- along with Jordan Hatch, former senior digital adviser of the DTO and former head of the DTO’s Digital Marketplace, Catherine Thompson -- expressed myriad concerns with the Government’s current IT procurement regime.
One of the major issues flagged by Shetler and the others is the concern that years of outsourcing to contractors and integrators have progressively deskilled the public service to the point that it lacks the digital and commercial skills needed to deliver services that citizens expect.
“Government urgently needs to conduct capacity and capability planning for the future public service,” the submission stated. “As part of this, the public service should establish a widespread digital capability program, working across all levels of seniority.
“As the public service has become progressively more deskilled in modern IT and design, government has grown to heavily rely on external contractors to deliver ICT outcomes.
“This reliance has been increasing over the last five years as digital service delivery accelerates. Reliance on vendors in turn further deskills the public service, to the point that it is not uncommon for public servants to seek advice from vendors about what they should be buying,” it said.
Suggesting ways to avoid this ongoing trend, the submssion’s authors said that they agree with a proposal by the Community and Public Sector Union (CPSU) to cap and cut departmental expenditure on external consultants and to use the savings to fund increased staff and capability.
“In 2015/16, the contingent workforce accounted for 16 per cent of total Federal ICT spend. During the same period, the government spent a mere 0.5 per cent on ICT staff training,” the submission said. “We believe that internal development would be a substantially more cost-effective approach to ensuring the public service has the skills required to deliver.”
Other proposed measures to reverse the trend included the recommendation that the Government establish a widespread digital capability program, working across all levels of seniority.
The former DTO trio also expressed concerns about the level of competitiveness and accountability in Federal Government IT procurement, suggesting that although the Government is the country’s largest customer of such services, existing technology procurement is slow, ill-suited to agile project delivery, favours established vendors, and tends to lock out smaller, more nimble Australian start-ups.
“Technology procurement in government is process-driven, slow and unsophisticated. In our experience across the public and private sectors, we have found that government procurement is relatively less capable of understanding and controlling costs, managing significant supply relationships, and accelerating the introduction of new technologies,” the submission said.
“Additionally, the current mode of procurement favours large international technology vendors and consultants over small-to-medium enterprises (SMEs) and new technology models that are regarded as unproven,” it said.
And although the Government has taken a number of steps to improve access for smaller IT players, such as capping IT contracts to $100 million, Shetler and co. suggested that the measures are crude and downplay public sector procurement’s potential importance as an instrument of economic policy.
To make a real difference for smaller IT suppliers, the submission’s authors recommended that the Australian Government invest in strategic procurement expertise, and dismantle panels in favour of rapid digital procurement pathways.
They suggested that the DTA’s Digital Marketplace, which is aimed squarely at giving smaller IT providers a shot at smaller Government contracts, should be rebooted as the first of these pathways.
The former DTO executives also recommended that procurement processes and contracts should be “radically simplified”.
Moreover, they suggested that the public service should new funding formats, including seed funding for prototypes and a review of “value for money” in the context of procuring innovation.
The submission comes more than a year after Shetler publicly took aim at inefficiencies in the Government’s IT buying habits, as he stepped away from his short-lived role as the country’s digital chief.
In a blog post marking his departure as the Government's chief digital officer, Shetler suggested that the public sector remains somewhat mired in IT procurement and project inefficiencies, despite the steps the government has taken to improve its processes.
“When it comes to service delivery, the transaction volumes of government services are small compared to the wider world,” Shetler said in the post, published on 3 December.
“And still, government spends more than $16 billion a year on IT. Our procurement and funding processes encourage big IT programmes, with bigger contracts. They drive a culture of blame aversion which creates the perverse outcomes and actually increases risk.
“The history of the past several years of government IT failure is testimony to that," he said at the time.