AoG contracts gain momentum

August 2014


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Education Review has been tracking the progress of All of Government (AoG) contracts with schools over the past few years – more recently looking at the launch of the Gas for Schools contract. Here it looks at the growing popularity of the IT Hardware contract and the benefits and savings that participating schools are seeing.


MomentumThe Ministry of Business, Innovation and Employment’s (MBIE) AoG contracts are really starting to gain momentum in the school sector, with 14 contracts now available to schools and great interest from schools in eight of the contracts that are presenting real value for schools, including air travel; office consumables; vehicles; IT hardware; mobile, voice and data; print devices; reticulated gas; and rental vehicles.

The contracts establish a single supply agreement between Government and approved suppliers for common goods and services in an effort to reduce costs for those participating in the agreements, making it easier to do business with Government and boosting productivity for the suppliers involved in the agreement – ultimately saving taxpayers money.

Growth, savings and trends
Schools’ participation in the contracts has risen consistently over the last 12 months. MBIE reports there are now 326 schools participating in at least one or more AoG contract.

The objective of AoG contracts is to achieve greater savings for schools, and it would seem that schools are now becoming savvy to this, with MBIE figures showing increased savings year on year. For the year ending March 2014, participating schools saved more than $900,000, which equates to an average saving of 17 per cent.

The Gas for Schools initiative was the most recent AoG contract tailored to schools and has been gaining momentum over the past few months. MBIE says there has been interest from almost 100 schools of varying size from all over the North Island. MBIE and Genesis Energy are now in the process of transitioning a number of these schools over to the contract.

The Gas for Schools contract has produced an average saving of 20.5 per cent schools’ their annual gas bills. With a contract term until September 2017, the savings will continue to grow for these schools.

However, the two most popular contracts for schools continue to be IT Hardware and Office Consumables, with both of these contracts having over 160 schools signed up.

Over the last 12 months, the growth in the sales of tablets to schools has grown significantly. While desktops are still one of the top three most popular items purchased by schools, iPads and Chromebooks have now joined them.

Those participating in the IT Hardware contracts have seen average savings of up to 21 per cent for desktops and thin clients, 15 per cent for tablets (excluding iPads), and 13 per cent for laptops and monitors.

MBIE’s schools account manager in the Government’s Procurement Branch, Jan Barnett, says they have created a more structured approach to increase the awareness of AoG contracts within schools.

“We have promoted AoG contracts for schools within education-associated forums and education events. We have managed to get in front of schools to spread the word and unravel the mystery of AoG. The results show this approach is working to raise awareness, and we are now starting to see schools actively talking amongst themselves around AoG and the value proposition,” says Barnett.

Advantages of AoG
Topping the list of benefits for participating schools is the ability to access great prices, achieved through AoG’s economies of scale. The smallest school can access the same price as the largest central government agency.

However, the advantages of AoG contracts extend beyond cost savings.

“AoG contracts also save schools precious time and resources. There are many hidden costs associated with purchasing, such as the time it takes to research equipment, shop around, negotiate with suppliers, and draft contracts. Under AoG, these are taken care of and schools can be confident that they are getting top quality equipment at a great price,” says Barnett.

To take the popular IT Hardware contract as an example, schools are benefiting from the corporate specifications attributed to AoG equipment; it is subject to minimum standards to ensure a longer product lifecycle, which minimises the replacement cost for schools.

AoG suppliers are leading IT hardware companies in New Zealand, representing market-leading brands. Schools represent core business for some of the AoG suppliers who have a history of working with and delivering IT solutions for schools. Suppliers offer a standard three-year warranty on equipment purchased under AoG and a one-year warranty for tablets.

There are agreed service levels in the AoG supplier contracts, including things such as warranty repairs and delivery of orders in full, on time and without problems.

AoG IT hardware product catalogues are updated every quarter with new equipment, offering a range of equipment to meet school requirements, from small form-factor desktops to all-in-ones, Chromebooks to high-spec laptops, Android, Windows 8, and iPad tablets, monitors and accessories. AoG pricing is secured for three-month periods, so schools have time to secure funding and order equipment at great prices without the pressure of ‘limited time offers’.

Schools are also kept up to date with a regular ICT newsletter covering ICT developments, supplier updates and market share information across the field. Schools participating in the IT Hardware, Print Devices and/or Mobile, Voice and Data contracts, are emailed this newsletter quarterly.

Next steps
MBIE will continue to work across the sector to raise awareness of AoG contracts in schools and promote the value they can deliver for them. As we return to the market for a number of AoG contract solutions, we are in a much better position to deliver solutions that meet the requirements of schools.

We are focused on working more collaboratively with the Ministry of Education to raise awareness of some of these initiatives. We have been pleased with the momentum we have gained so far and look forward to future success through the development of more tailored solutions for schools.

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