How much work do ICT panellists really get?

John Sheridan - FAS Technology & Procurement

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I hear a lot from ICT suppliers about panel arrangements, particularly those who have been successful in responding to tenders but have not subsequently been awarded contracts.

I was interested in analysing the AusTender data to see how frequently that occurs and to see if there were any trends in terms of panel size or duration.

There were no apparent trends in the data with some panels with a large number of suppliers, the majority of which had won contracts, some panels with a small number of suppliers but a number of those which had not been awarded contracts, vice versa and many other variations.

What the data does tell me is that as at 1 July 2014 there were 156 active ICT panels reported on AusTender:

  • 1,360 suppliers were engaged through those panels;
  • 12,100 contracts were awarded valued at a total of $5.7 billion;
  • The average total contract value per panel was $37 million and the median was $2 million;
  • The average number of contracts per panel was 78;
  • Of the total suppliers, 57% had contracts reported;
  • The average number of contracts awarded per supplier was 9 and the median was 1; and
  • The average value per panel contract was $461,855 and the median was $102,960.

I’m interested in hearing from you about your experiences with panels. In particular I’m interested in:

  • Any specific obstacles you’ve faced in responding to a panel tender
  • Opportunities for streamlining panel documentation
  • If you were successful in tendering for a panel, have you received a return on investment? If not, why not?
  • If you chose not to respond to a panel tender, what influenced your decision?
  • If you work for a Commonwealth entity and have established a panel, what were your main drivers for establishing it?


Comments on this blog are now closed. Please let us know if you would like to discuss this post or have any general comments.

Comments (9)

We are a small business who responded to a DHS panel in 2012 and were appointed. As a result we were piggybacked onto a number of smaller agency panels. We have had no work from any of these panels. A couple of times, out of the blue, we received small very specialised requests for particular skills. We responded to one of these, never had any acknowledgement and later found out by searching ourselves that the tender was cancelled. Six months later it was relisted but we simply felt it was a waste of time responding again. We were interested to respond to another proposal that landed in our inbox and we asked a question before responding using the requested email and never heard a word so we decided not to tender as we don't want to do business with a client that unprofessional.

We also made a submission to be on the IT "aaS" panel and have never heard boo since. We simply have moved on.

Now we admit we have not actively chased work with the Australian Government. We have been too busy with other clients who we found it easier to engage with. At the same time, the lack of engagement and communication from agencies about opportunities means we simply feel it is a waste of our sales effort and unlikely to provide a return.

As a result of this, we are very much against any notion that a firm should have to pay a registration fee to be on a panel. There is too high a risk that no work will ensue.

We also observed in 2013 a real inertia which lasted right through to the may 2014 budget. Agencies seemed reluctant to invest prior to the September election and were also focused on cost reductions by cancelling things. Post election cuts in budgets were given to us by 2 agencies who were considering buying a solution we sold. We would have thought the business cases justified the investment but the mindset seemed to be just cut expenses and not drive productivity. Cutting headcount and expenses is a fast way to reduce costs. the next wave of productivity in Government will have to come from intelligent investment decisions.

In NSW, where we are pre-qualified on the State-wide panel, we have found that very useful as we have pitched for and won work and being on the supplier panel means the contract and billing is easy with the agency. Had we actively pursued work with the Australian Government we would like to think that the same would apply.

Finally we still see examples where agencies have their own terms and conditions which vary from the published Government contracts T&Cs. For the life of us we cannot see any reason why the contract terms and conditions should vary by agency unless they are very specific items unique to that tender.

Any specific obstacles you’ve faced in responding to a panel tender

The only thing is that some of the IT Services (ie outcome focussed not T&M panels) have very comprehensive/onerous proof of capability requirements.

Opportunities for streamlining panel documentation

The tender responses for IT services/projects are in some ways not unreasonable to qualify ca company. However if there are a very high number of organisations on the panel and they select from that to release the tender then the effort is onerous. A panel is a ticket to the dance. You still have to be asked to dance.

If you were successful in tendering for a panel, have you received a return on investment? If not, why not?

Some panels yes others definitely no. Some of the IT Services - outcome focussed panels have not been very strongly used. If you have a look at who has won work on some of these panels - quite a few of the contracts on panels that are supposed to be outcome focussed are actually hidden T&M contracts.

If you chose not to respond to a panel tender, what influenced your decision?

Resources available to respond, how much work required to respond, whether the approach described in the panel was realistic. One panel was after both services for systems and infrastructure and also wanted product. They had a stated preference for companies that could do the full range of services. This meant the bigger companies. However the panel was intended to be used by some quite small agencies.

Thanks to Peter and Don for these quick comprehensive responses. This is the sort of feedback we are really keen to get. I'll respond further later but I wanted you both to know that we appreciate the time you have taken to help.



Thanks for posting this data John ... it is interesting. So ... when panels are in place they are used ... which is good. Is there anything in the data that gives insight into 'leakage' i.e. off-panel procurement by agencies of services that are included in a panel?

Any specific obstacles you’ve faced in responding to a panel tender

- Painful response formats (e.g. locked files that permit plain text only).

- Agencies asking for things that are not necessarily possible or in their interests (e.g. poorly thought-out requirements).

- Having to "panel-beat" our offerings into service structures that fit the mental model of the procurement officer, but do not allow us to express our offerings the way we would usually express them.

Opportunities for streamlining panel documentation

- After 20 years trading I'm surprised the Commonwealth doesn't know our ABN number, business address, PO box, email, address for service of notices, registered office address etc. Be nice to manage that in one place on a "by-exception" basis rather than doing the routine cut-and-paste. Same with insurances - why do we have to provide a certificate of currency for three or more policies every time? Does the Commonwealth really not trust us when we say we have the requisite insurance?

If you were successful in tendering for a panel, have you received a return on investment?

- For most panels, yes.

If you chose not to respond to a panel tender, what influenced your decision?

- Usually because it is single-agency, multiple services, and a duplicate of an extant APSC panel. I can't fathom why a number of agencies still establish their own panels for services clearly identical to those offered through the APSC panels.

Think Steve's question around "leakage" is a good one.

Peter neatly described my biggest issue in being on panels: it's a ticket to the dance, but you still have to be asked to dance. Or to put it another way, the idea that "if you get on the panel, the work will come" just isn't true. All it does is reduce the paperwork for agencies who have already decided who they want to engage.

I've also worked on the other side, looking for ICT providers as a business manager in a large Government department. Like a lot of other managers at the time, I actively looked for ways to avoid going through a full tender process, and would have been very happy if there had been a panel to just ask for quotes. Quicker and easier.

My other difficulty with panels is making sure that the panel you're on is able to be used by the agency that wants to engage. Some panels specify that they can only be accessed by a subset of Government agencies. If you do find a panel that the agency can use, it may be that they're not taking new suppliers. It would make more sense, given every panel requires similar criteria to be met, for there to be a single whole-of-government panel that could be joined by new suppliers during the life of the panel.

As an experience ICT sourcing manager in government, in my experience the only way for panels (or registers) to be successful for both the buyers and suppliers is for the buyer to be forced to invite all the panelists to participate rather than only inviting however many suppliers is required by the panel rules (sometimes that's only 1).

This way the supplier really knows what work comes out of this panel and can decide to participate or not and gets the opportunity to bid and compete for genuine work.

The only challenge for the buyer to include "reasonable" mandatory criteria if the panel is large (more than 10 suppliers), otherwise they might have too much to evaluate for suppliers than can not genuinely compete.

From the data above its seems that we create panels (or registers) to give the industry the "illusion" that they is plenty of work, rather than based on actual need. (Eg, Why have a panel of 80 suppliers if there is only enough work for 10?)

Again thanks for taking the time to provide feedback on your experiences. 

Perhaps I should have mentioned earlier, we are working on an initiative to expand AusTender functionality to automate agencies’ purchasing activities generated under whole‑of‑government and other cooperative panel arrangements. There will be indirect benefits to industry through the centralisation and simplification of RFQ processes and the improved visibility to government buyers of suppliers’ goods and services approved under the panel arrangements.  We are hoping to share more information on this in the coming months.

Thanks for the feedback John. 

Participation in any procurement process imposes costs on potential suppliers. As a general principle these costs should be considered by entities when designing processes so they are commensurate with the scale, scope and risk of the procurement.

Panels are of most benefit when they cover goods or services that are purchased regularly. This allows entities to enter into contracts with panel members without a further procurement process, as panellists have already been through a competitive process including value for money assessment. The costs of establishing a panel can therefore be offset by the efficiencies of being able to order directly from the panel.

In relation to placing arbitrary limitations on panel supplier numbers, it’s not possible to accurately predict in advance the volume of work that will be generated under a panel, particularly in the case of shared arrangements.  

Guidance on the establishment and use of panels is provided on the Finance website here. In a panel arrangement, a deed of standing offer or a contract exists between an entity and each supplier on the panel detailing how the entity will procure the goods or service from the supplier, including any process for competition between panel members, where appropriate.

Last updated: 24 August 2016