Proximity

Case studies

Internet Gateway Reduction Project

Australian Customs and Boarder Protection Service

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Key Personnel

Date

June 2012May 2013

Significance

Customs was responsible for procuring gateway services on behalf of numerous client agencies that included large agencies such as the Department of Immigration.

Overview

A project to procure secure internet gateway services (and associated internet connection services) for ten Australian Government Agencies as part of the Australian Government’s Internet Gateway Reduction Program.

Services

Proximity was engaged as the Procurement Advisor to the Project and provided advice on:

  • Procurement strategy – including the RFT for Gateway Services, purchasing from the Department of Finance Internet Based Network Connections (IBNC) Panel and the use of the Intra Government Communications Network (ICON)
  • Drafting the market testing documentation including RFT documentation, conditions of contract and evaluation plans
  • System integration risk – including risk mitigation options such as cooperation obligations, service levels and risk transfer mechanisms
  • Governance arrangements – including successfully negotiating and establishing a Memorandum of Understanding (MOU) with all other agencies in the Customs Group
  • Conducting the evaluation for the gateway and IBNC services tenders
  • Leading negotiation for the Gateway conduct
  • Leading the negotiations for the gateway contract
  • Stakeholder management (including both internal and external stakeholders)
  • Coordinating the procurement team (including technical experts, financial advisers, evaluation team members, report writers and others)
  • Drafting minutes and briefs for the Customs and Border Protection and client agency executive
  • Contributing to financial reporting
  • Compliance management and quality assurance
  • Scheduling of project milestones

Approach

Proximity’s approach was to work onsite with Customs so that the procurement could be undertaken in the most efficient and effective way possible. Proximity worked very closely with the Project’s financial, technical, legal and probity advisors throughout the procurement process.

Customs was responsible for procuring gateway services on behalf of numerous
client agencies that included large agencies such as the Department of Immigration.

The outcome

Lessons and achievements

Proximity assisted Customs to undertake a complete procurement process from initial planning to contract finalisation. This was achieved in the context of challenges arising from conducting a parallel procurement process for a large and varied client group.


The contracting model for the procurement managed to achieve the Group’s desired organisational outcomes, which included flexibility in volume consumption (without a price premium) and control for each Agency over its day to day operations.

Proximity achieved a balance between securing a strong legal and commercial outcome for Customs and its client Agencies while developing a strong working relationship with the successful Tenderer.
The procurement achieved all of Customs’ and its client Agencies’ requirements and received praise from Customs executive and AGIMO as the program administrator.


What we did

Proximity firstly assisted Customs to develop a clear strategy for the procurement of the required gateway and associated internet connection services. Because it is mandatory for internet connection services to be procured through the IBNC Panel, the strategy required a dual procurement approach. However, there were a range of options available including sequential gateway service and IBNC service procurements or a combined parallel procurement process.

The strategy paper also considered the contracting model options (e.g. one contract for all client Agencies or a Deed under which client Agencies placed orders) and the level of contract management control Customs would exercise as the lead Agency.

Proximity reviewed the approach taken by other lead Agencies in the Program and prepared a paper that identified the key options and the advantages and disadvantages of each option. Proximity assisted Customs to workshop these options with other client Agencies and finalise a clear strategy that was agreed by all Group members.

In order for the Project to be successful, it was critical to have a high level of consultation and collaboration with client Agencies. This would ensure all concerns and suggestions by client Agencies were properly considered and implemented where appropriate and consensus on the key strategic direction for the Project was agreed quickly and amicably.

Proximity played a key role in facilitating this collaborative approach throughout the 18 month project period. Proximity developed an MOU that was executed by all 10 client Agencies that outlined the roles and responsibilities of each client Agency and Customs as the lead Agency. The development of this MOU (which was agreed much earlier in the procurement process than other Groups) assisted with quickly identifying and resolving areas of concern and difference. This allowed the Project to successfully proceed within schedule tolerances.

Because the internet connection services had to be procured through the AGIMO IBNC Panel, it was imperative to ensure that if the successful gateway service tenderer was different to the successful IBNC Panellist, the two parties would work closely and effectively together to provide a seamless internet gateway service. The RFT was structured so that Gateway tenderers were required to nominated IBNC Panellists with whom they had a strong working relationship and provide detailed information about the experience the two parties had working together and their approach to ensuring delivery of a seamless end-to end solution.

The size of Agencies in the Group varied between 20 and 10,000 staff, so the contracting structure and pricing regime needed to ensure the smaller agencies could benefit from the Group’s buying power and their differing service requirements could be met. There was also some uncertainty regarding the future service volumes required by Agencies. The pricing model therefore needed to provide sufficient flexibility to allow the Group’s service consumption levels to increase and decrease significantly without a disproportionate change in cost.

Proximity led the development of the RFT documentation that gave effect to the agreed strategy and also developed the associated evaluation planning and implementation documentation. Proximity led the negotiation process, including development of the contract negotiation directive, conduct of the negotiations and the development of the negotiation outcome reports.


Types of work used for the project

  • Procurement strategy – including the RFT for Gateway Services
  • Risk management – including risk mitigation options
  • Governance
  • Negotiation – led the negotiation for the Gateway conduct
  • Stakeholder management – (including both internal and external stakeholders)
  • Compliance – management and quality assurance.

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