An investigation into capability, planning and management shortfalls in Commonwealth entities entering into external information technology (IT) contracts. The report examines audit reports and evidence to identify key issues and themes related to IT project delivery, capability development, oversight, and planning. It also discusses different project delivery models, such as in-house development, outsourcing, and mixed approaches. 

The report finds that procurement shortfalls lead to poor results as well as poor value for money. It underscores the need for better project planning, risk management, and adherence to the Commonwealth Procurement Rules to achieve value for money.

Key findings

• Lack of IT strategy and policy leadership contributes to inadequate project planning and execution.
• Recurring procurement-related issues include implementing appropriate training and guidance, considering the design and use of panel arrangements, and focusing on value for money.
• Overpromising by tenderers during the procurement process is leading to underestimated costs and timelines.
• Terminating procurement processes can undermine public confidence.
• Lack of sufficient planning may create situations where departments eliminate or reduce competition between tenderers.

Recommendations

1. Improve guidance for Commonwealth departments and agencies, in particular in relation to procurement, resourcing, project funding, embedding capability and project management.
2. The Department of Finance and the Digital Transformation Agency should continue to collaborate on common definitions and matrices, guidance and policy documents, oversight and review of IT projects, and the conduct of gateway reviews.
3. The Department of Finance and the Digital Transformation Agency should report back to the Committee on the progress made to improve IT procurement.