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NSW government agencies bend over and take it from telcos

Auditor-general finds most lack expertise to negotiate, manage, contracts

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Even though telecommunications contracts are an eternal staple of government contract management, government agencies in the Australian state of New South Wales lack the expertise needed to get the most out of the agreements they sign with carriers.

That's the conclusion of a report prepared for the government by the auditor-general, whose report leads with the statement that “most of the agencies we reviewed do not have the level of expertise in procurement, contract management and expense management that is needed in the fast-changing telecommunications area to achieve value for money.”

The review picked off the Department of Education and Communities, Forestry NSW, Fire and Rescue NSW, NSW Businesslink, Essential Energy and Sydney Trains for examination – which together spent a total of $115 million on telco services and equipment in 2012-13.

The report criticises agencies for being “price takers” and not taking the opportunity to negotiate with suppliers on price and services, when making purchases under the state's GTAs (government technology agreements).

Some agencies are also failing to take advantage of new arrangements, under the Procurement and Technical Standards Working Group, introduced in 2013 to address shortcomings in the GTAs.

While the internal workings of agencies is highlighted, the auditor-general also gave an example of how policy decisions could create inefficiencies in agencies' contract management. The report notes that the split of the former RailCorp into two bodies in 2013 (Sydney Trains and NSW Trains) had “resulted in gaps and weaknesses in the contract and expense management processes”.

It won't surprise anyone that billing errors remain a source of concerns about waste, with only Fire and Rescue NSW demonstrating stringent bill-checking to get value for money. ®

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