ICT SME policy and standard set new compliance requirements for agencies

In November 2013, the final draft of the new ICT SME Participation Scheme policy and standard was released by the Queensland Government Chief Information Office (QGCIO).

The recently released Queensland Government ICT Action Plan identified the following set of five new guidelines to be implemented to ensure that small to medium enterprises (SMEs) were given the opportunity to provide better value-for-money options for the Queensland Government through the tendering process:

1. At least one responding SME capable of delivering is to be automatically shortlisted in the evaluation of ICT offers.
2. Queensland Government may directly engage SMEs in the provision of ‘innovative’ solutions valued up to $500,000.
3. The Government Information Technology Conditions (GITC) are to be simplified for SMEs.
4. Significant procurements are to be unbundled where appropriate to increase the competitiveness of SMEs.
5. Major contractors may not change their sub-contracting requirements relating to SMEs without the Queensland Government’s express approval.

The new ICT SME Participation Scheme policy requires all Queensland Government departments to comply with the ICT SME Participation Scheme Standard (SME Standard) to ensure a 'consistent, transparent and accountable approach for ICT procurement'.

The SME Standard defines an SME as being 'any business employing less than 200 people'. The term ‘people’ includes both employees and contractors. The term ‘business’ means a single legal entity and includes registered companies, partnerships and sole proprietors.

The SME Standard specifically addresses the first two of the set of five new guidelines identified in the ICT Action Plan. The requirement for at least one SME to be automatically shortlisted is conditional upon a suitable offer being submitted by an SME. Any offer received from an SME that does not meet a department’s specified requirements is not eligible to be shortlisted. Further, subject to a department’s compliance with the other requirements of the SME Standard, this requirement will typically only apply to formal invitations to offer valued at between $100,000 and $1 million.

The SME Standard expressly permits departments to directly engage an SME to provide an ‘innovative’ solution valued up to $500,000. The SME Standard defines ‘innovation’ as 'creating value from new ideas'. This includes all ICT-related procurements for new initiatives or updating or replacing an existing ICT solution. The following categories are expressly excluded from falling within the meaning of an ‘innovative’ solution:

• hardware acquisition, installation and associated maintenance services
• commercial off-the-shelf software acquisition, installation and associated maintenance services
• commodity-based managed services.

To engage an SME for an innovative solution, a department must identify its ‘problem statement’ and prepare a ‘business solution’ using the template provided by QGCIO.

The department may then approach one or more SMEs with its problem statement and business solution. Any award to an SME must be based on a 'real innovative outcome that provides the best value for money for the Queensland Government'.

The department will engage with the successful SME using either a new short-form ICT contract, which is due to be released in early 2014, or the existing GITC Framework where the engagement is assessed as being high risk to the department.

The new ICT SME Participation Scheme policy and standard, once formally approved, represent only two of a number of new documents, standards and policies that are due for release under the ICT Action Plan.

It is important for the relevant officers in all departments to:

• ensure you keep up to date with these and other developments arising from the ICT Action Plan
• comply with any new or amended requirements for the procurement of information and communication technology products and services.

^{The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.}