To AoG or not to AoG? - that is the question for schools

August 2015

 

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The renewal of the All-of-Government (AoG) IT hardware procurement contract provides a good juncture to look at why the contract hasn’t had greater buy-in from schools so far, and whether a new contract might turn this around. JUDE BARBACK investigates.

AoG 01With the renewal of the All-of-Government (AoG) IT hardware contract underway, it is timely to reflect on how successful the current contract has been with schools, and whether its renewal will bring any changes to encourage more buy-in from schools.

The current IT hardware contract began in 2010. The level of participation from schools has been fairly underwhelming. Of the 2,440 schools eligible to participate in AoG contracts, approximately 1,400 initially requested to see the catalogue with the full range of products and pricing. Of these, just 185 schools currently participate in the AoG IT Hardware contract.

Why aren’t more schools participating?

While it was always expected to be a slow-burner, five years in, the level of take-up of the IT hardware contract from schools remains low.

Some schools are adamant they can negotiate better deals themselves. Head of ICT at Te Aroha College Troy Smith said they believed they could get better deals and more choice by purchasing directly. Principal of Point England School Russell Burt said they purchased outside of the AoG contract because they can negotiate cheaper prices.

Other schools prefer to support local suppliers. The schools involved in the Te Puke Learning Network said local suppliers have been able to give the network deals and insurance, finance and service that they couldn’t have found through an AoG contract supplier.

The roll size or location (i.e. urban or rural) of a school could perhaps have a bearing on its decision to opt in to the AoG scheme. However, there is no correlation between decile and the rate of participation in the AoG IT hardware contract, with participating schools spread fairly evenly across the deciles.

Similarly, there doesn’t appear to be one level of schooling that favours the scheme over another, with full primary schools accounting for a quarter of the schools participating in the contract – roughly the same proportion of secondary schools.

Graham Prentice of Cyclone Computers, a supplier for the current AoG IT hardware contract, suspects one of the main reasons is that the catalogue doesn’t offer low-end consumer-level products.

He says that if a school has a relatively small IT budget, it might prefer to opt for cheaper alternatives than what appears in the catalogue to make its money go further.

A second reason for the low take-up, speculates Prentice, is that the catalogue is vast and complicated, making selection a daunting prospect for schools. With over 800 items listed, Prentice believes there needs to be some form of filtering offered to make the process more streamlined for schools.

Renewed contract now launched

The Ministry of Business, Innovation and Employment’s New Zealand Government Procurement has taken note of such suggestions as it prepares for the renewal of the AoG IT Hardware contract. A Request for Proposals (RFP) for the new contract was released early this year, asking bidders for ideas on how to encourage schools to engage.

“We sought feedback from government agencies and schools as we looked to develop this new solution to ensure that the second generation contracts are fit for purpose and deliver value for money to government agencies and schools,” says Larissa Hill of New Zealand Government Procurement.

“This includes the scope of products available in the catalogue and we also consider any other areas for improvement identified throughout the life of the contracts.”

In 2013 MBIE told Education Review it was focusing on simplifying the end-to-end process for schools and making the whole process more user-friendly.

The changes made to the new AoG Office Supplies contract reflect this. Hill says they have seen great uptake from schools already, with more than 200 schools signed up since the Office Supplies contract went live on 18 July this year.

Advocates impressed with savings

Certainly, the schools that are on board the AoG procurement programme are advocates.

Wellington College has had great success joining the AoG contracts. The school has signed five AoG contracts, including the IT Hardware contract, and director of ICT Helen Jones says they are enjoying the savings.

Lytton High School in Gisborne has also been impressed with the savings they have been able to achieve through AoG contracts.

“We have a cost savings analysis now for Travel, IT hardware and BP Oil and have some indicative savings for Electricity. With taking these contracts into account, we are looking at saving approximately $50,000 per year for our school,” says Raymond Pereira, business manager at Lytton High School.

Nigel Georgieoff of Christchurch Boys’ High School says the AoG contracts give schools options when it comes to spending.

“It makes you look at all other costs eventually, including non-AOG items, and review how you do things and where other savings can be made,” he says.

The university sector also appears to be on board, with seven out of the eight major universities now signed up to the current IT hardware contract.

What will the new contract deliver?

The new AoG IT Hardware contract will go live 23 September 2015. The RFP closed on 11 March and successful suppliers will be awarded contracts soon.

MBIE remains committed to getting a good deal for schools (and other agencies) through the negotiation of the second generation AoG IT contract.

“Providing a contract that suits the needs of all government agencies and eligible schools remains a priority for New Zealand Government Procurement,” says Hill.

Prentice firmly believes there are savings to be made for schools. He points to the way the AoG IT hardware contract works for government departments and agencies, which, unlike the education sector, are required to make their purchases via the AoG contract. As a result these organisations are now seeing the power of group purchasing, achieving significant savings.

“Make it easy, make it accessible, and you’re bound to get more engagement from schools,” says Prentice of the incoming new AoG IT hardware contract.

Come late September, when the new contract is released, it will be interesting to see if this advice has been taken into account, and if more schools opt in as a result.

 

 

What are All-of-Government (AoG) contracts?

All-of-Government (AoG) contracts are part of the Government’s Procurement Reform Programme, negotiating supply agreements between the Crown and approved suppliers for selected goods and services.

By harnessing the collective buying power of over 200 State sector agencies and now 2,500 schools, government has positioned itself as a ‘customer of choice’ and is able to achieve substantial cost savings.

The initial four contracts – Desktop/Laptops, Office Consumables, Print Devices, and Vehicles – were established in mid-2010.

Current AoG contracts take-up numbers

AoG contract No. of schools
Advertising Media* 792
Air Travel 69
Electricity 10
External Recruitment Services 1
IT Hardware 185
Mobile Voice and Data Services 23
Motor Vehicles 2nd Gen 16
Office Supplies 205
Print Devices 28
Rental Vehicles 30
Reticulated Gas 51
Travel Management Services 35
Total schools participating in at least one AoG contract 1,033

 

*No formal sign-up process is required for schools to access the discounts through this contract.

Source: Ministry of Business, Innovation and Employment


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