The WA Auditor-General has delivered a strong criticism of the ability of government agencies to properly manage ICT contracting and procurement.
In his Second Public Sector Performance Report 2011, Colin Murphy, said in his examination that of six state government departments, just one — the Western Australian Land Information Authority (Landgate) — managed all aspects of ICT contracting and procurement well.
The remaining agencies included the Department of Education (DoE), Department of Mines and Petroleum (DMP), Lotteries Commission (Lotterywest), Electricity Retail Corporation (Synergy) and the Tourism Commission (Tourism WA).
“A key area for improvement at four agencies, DMP, Lotterywest, Synergy and Tourism WA was a lack of comprehensive and up-to-date strategic ICT plans,” the report reads.
“Without an up-to-date ICT strategy, agencies significantly increase the risk of making poor use of contractors and getting poor ICT outcomes."
The report found DMP, Lotterywest and Synergy did not fully comply with procurement policy for some of their contract arrangements. This included failure to develop business cases, establish contract management plans, seek appropriate approvals and lack of competitive tendering for some contracting arrangements.
“Three agencies — DoE, DMP and Synergy — could improve their management of conflicts of interest,” the report reads.
“Government agencies can be confident that ICT contractors listed on CUAs have undergone a rigorous assessment process.”
While Landgate planned, procured and managed ICT contractors well, according to the report, the remaining agencies needed to strengthen their processes to ensure they are managing strategically and promoting open and effective competition to achieve value for money.
Detailing issues with the agencies’ ICT plans, the report said these plans were often out of date and did not clearly align ICT projects and sourcing strategies with identified current and future business needs.
They also did not include resourcing requirements, lacked clear objectives and associated performance measures, and did not address risks of different ICT delivery options or strategies to mitigate them.
Contracting arrangements were also found to be wanting, resulting in dramatic increases in the scope and cost of a number of projects.
“Synergy could not demonstrate that the procurement process for a contract originally valued at $380 000 included competitive tendering," the report reads.
"Subsequent variations to the scope of this contract increased total payments to over $3 million.
“Synergy obtained ministerial approval for a $38 million contract arrangement as required. However, Synergy reduced the scope of this work to $21 million. Synergy then entered into further arrangements, including some work beyond the original scope, valued at over $30 million and did not obtain ministerial approval.”
According to the Auditor-General, WA public sector agencies spend over $600 million each year to procure ICT goods and services.
In June, the Auditor-General found significant vulnerabilities to cyber threats in all of the agencies examined for his 2011 Information Systems Audit Report.
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