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end contracts – which might be five or six hundred per year – which require
the use of our higher end ASDEFCON templates.”
Q: HOW DO YOU RESPOND TO COMPLAINTS THAT SOME
TENDERS ARE UNNECESSARILY COMPLEX?
A: “Some of our tenders will always be complex – there’s just no way
around that because at the very high end there will always be demanding
technical specifications. Having said that, what DMO needs to do is
minimise the amount of documentation we are requiring tenderers to
provide, particularly in circumstances where we are dealing repeatedly
with the same companies. We have to ask ourselves questions about how
much of the generic data we need to have replicated in each response – the
financials, the insurance details, quality plans and so on.
“It’s also important to make sure that DMO picks the correct template
right at the start of the process and that we tailor it in the right way. I’ve
intervened in the process a number of times, especially when SMEs are
involved, because it is sometimes the case that we have picked the wrong
template and we have used something too complex for the particular
“We have around 20 templates and we are trying to simplify and
standardise them to the greatest extent possible. For example, we’ve
just added a template for the disposal of equipment – something that
previously didn’t exist, even though we have to dispose of a number of
items that have reached the end of their life-of-type.
“We need to make sure we have templates that reflect the complexity of
the procurement and accurately reflect the risk profile of the activity. We
have also just released a new standing offer for goods and maintenance
services (SOGMS) that will be a major improvement on past practice
for procurement of items at the lower end of complexity. I remember
when I joined DMO in 2007 there were significant bottlenecks in the
maritime area because of some difficulties in the contracting mechanism
and negotiations for the provision of spares. These were often simple
procurements but OEMs would not sign up to them because the form in
use didn’t contain a ‘limitation of liability’ clause.
“We’ve now addressed that issue with a more appropriate template, to
the relief of the OEMs and also SMEs. This alone will lead to significant
“At the other end of the range, there has been a lot of criticism from
industry about the costs of tendering – particularly the time and resources
needed to submit a bid, which can be a significant cost for a company. In
the light of this we initiated discussions with the private sector to work out
exactly what is driving these costs and we did this in the form of a dedicated
joint industry and DMO working group to make sure that this activity was
progressed quickly. This process has led to a number of recommendations
that will now flow through to our ASDEFCON Strategic Materiel template.
“As a trial run we are testing these changes on Project SEA 1442
Maritime Communications Modernisation. If the changes to the template
prove to be satisfactory they will then flow through to all other strategic
and more complex procurements. “The feedback from industry so far
has been very encouraging.”
“In essence, what we are doing is reducing the amount of data we are
seeking in the original RFT – so instead of requiring a whole lot of detailed
plans what we are now looking for is an over-arching strategy document.
While it will ask for information about how the company plans to achieve
particular goals it will do so in a broad way. DMO will then use that data
along with reduced amounts of commercial information – to make
shortlisting decisions as efficiently as possible.
“What we will then do is put the selected tenders through a mandatory
offer definition phase. We will work with each of them and it is during this
activity that we will refine the detail and make a final selection at the end
of that process.
“This will reduce the costs of tendering for those companies that aren’t
shortlisted. This in turn means that we will only require tenderers to do a
lot of work when they know for sure that they have a reasonable chance of
being selected because they will be only one of two or three companies still
in the race. At this stage there should be a great deal of incentive for those
shortlisted companies to produce high quality documentation.
Ultimately the objective of our solicitation process is to gain the
required level of accurate information on capability, cost, schedule, risk
and Australian industry elements for the whole of life of of a project for
Government to make an informed decision.
Q: WILL THIS SIMPLIFIED APPROACH FLOW THROUGH TO
REQUESTS FOR INFORMATION:
A: “Yes. One of the actions that will come out of the present effort to
simplify the ASDEFCON Strategic approach will be to flow that down to all
other related templates.
“Another action we will undertake as a result of the cost of tendering
initiative is to make sure we have a much higher level of engagement with
industry before releasing the RFT. DMO will be undertaking many more
one-on-one meetings and will conduct market soundings. I am very much in
favour of direct individual meetings with companies where they can talk more
freely and give more detailed feedback than if they are part of a large group.
“Another mechanism will be to issue draft RFTs wherever possible
and use the feedback we receive to make sure that the final document
is better tailored than has sometimes been the case. This has a large
number of advantages, including that industry will already be engaged
in the process and will understand the requirements – leading to a better
outcome for everyone.
Q: IN THE PAST THIS APPROACH HASN’T ALWAYS WORKED,
GIVEN THE RELUCTANCE OF SOME MANAGERS TO SEE
INDUSTRY ENGAGEMENT AS A PRIORITY.
A: “It is going to take time to introduce this new culture across the
organisation. So what we are doing is to steer DMO in the right direction
and after that it’s a matter of training and education. The contracting
specialists will be advising the Projects and the SPOs about the best way of
dealing with the issues, including advocating more contact with industry.
We have to ask ourselves questions about how
much of the generic data we need to have
replicated in each response – the financials, the
insurance details, quality plans and so on
DMO will be undertaking many more one-on-one
meetings and will conduct market soundings
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