Victoria to create digital marketplace for flexible, scalable gov procurement

The Victorian government will create a digital marketplace for “highly scalable and flexible” procurement, replacing the tender-led digital sourcing approach that has dominated until now.

Digital Victoria, the Department of Premier and Cabinet's new digital unit, revealed plans for the whole-of-government Digital Victoria Marketplace last week as it looks to make it easier for businesses to supply to government.

It is expected to approach the market within the next three months to establish the marketplace, according to an advanced tender notice.

Documents reveal the “service-based solution” will allow agencies to buy “products and services under already established state purchase contracts and panel arrangements”.

The marketplace “would mainly have highly scalable and flexible source [sic] to award capability to cater for dynamic and complex contractual landscape across the whole government,” the notice said.

It is not clear how the marketplace relates to existing plans to merge the eServices Register with the IT Infrastructure Register under a project called the reform agenda.

The project is expected to result in the creation of “one register” for IT procurement underpinned by a single modular head contract and procurement platform.

In November, the government’s long-awaited digital strategy indicated there was a need to simplify procurement processes to improve the ability for businesses of all sizes to provide services.

It specifically called out the “lack of structures for repeated, effective partnerships with other organisations to jointly achieve government objectives”.

“Digital platforms, which are the entry point into government procurement, can be difficult to engage with,” the strategy said.

“Complex requirements for doing business with government can also be a significant barrier to organisations taking up key opportunities.

“Some organisations can find it too complex to procure business from the Victorian government as it erodes the value of participating.”

Plans for the state-based marketplace comes five years after the federal government followed the UK by standing up a digital marketplace to make it easier for SMEs to win government work.

While the marketplace had facilitated more than $2 billion for SMEs in the five years to March 2021, it is largely used to source contractors, with the top ten 'sellers' in 2021-22 recruitment firms.