Minister for Finance and Deregulation Lindsay Tanner today announced that Defence had locked down its first Gershon-related procurement deal with software giant Microsoft.
The "Volume Sourcing Arrangement" (VSA) announced today forms part of the government's so-called coordinated procurement contracting goals and was one of the recommendations that Sir Peter Gershon had given following his review of the government's $6 billion spend on technology each year.
Tanner today said he expected the deal with Microsoft to save the government $15 million each over the next four years from the contract's commencement in July.
"The Microsoft VSA provides agencies with access to substantial discounts off the price for Microsoft products and reduces the need for protracted negotiations between individual agencies and Microsoft. The discounted prices, combined with process efficiencies in the VSA, will provide a considerable cost reduction for agencies," Tanner said.
Defence was appointed by the government to negotiate such a deal with Microsoft in July last year, three months prior to the release of Gershon's recommendations, and was set to be one of the earliest changes in how the Federal Government approached technology procurement resulting from the Gershon review.
Defence in July sought expressions of interest from companies able to engage in Large Account Reseller arrangements — a deal that was won in November by Australian IT services and integrator, Data#3.
Microsoft has also welcomed the contract. "We are pleased to be able to take a leadership role for the technology industry and to sign a VSA with the Federal Government," said Microsoft Australia's managing director, Tracey Fellows in a statement.
"The agreement demonstrates our commitment to partnership, and we look forward to working with the government to further optimise its procurement and deployment of ICT resources," she said.
Without a credible investment in OSS, there is no way one can expect to negotiate with Microsoft.
How can a captive customer really negotiate?