News : Federal Government Contracts Set to be "Insourced"
Canberra, NSW, Australia, Feb 6, 2015 -- More federal government contracts are set to be "insourced" back from the private sector, according to industry players.
The claims comes as the Abbott Government gives tacit approval to the public service snatching back contracts from the business process outsourcing industry which expected to be the big winner from the government's privatisation agenda.
Private contenders for a job running a call centre for the Department of Industry and Science have been told that at least half of the work will now go to the public service's Shared Services Centre.
Fairfax Media revealed that the Shared Service Centre had snatched another call centre contract from UK-based service provider Serco in a move that left the outsourcing industry "gobsmacked".
The Shared Services Centre declined to comment, but public service sources say the private sector claims are over-simplifying the circumstances of the Industry and Science tender and there was no guarantee that the contract would ever be granted.
But any hopes that the minister might step in on the industry's side appeared to be in vain this week with Fairfax Media told Finance Minister Mathias Cormann is relaxed about the Shared Service Centre's move, and that contracts should go to the organisations best able to deliver.
The decision, announced just days before Christmas, to strip Science and Industry of its responsibility for vocational training and transfer it to Education and Training appears to have sealed the fate of the call centre project, according to sources close to one of the bidders.
The "machinery of government" change, which will see 470 public servants pack their bags and move departments, brought the contract into the orbit of Shared Services, which is run out of the Education and Employment Departments.
The contract was to supply and manage a call centre to inquiries from the public "via telephone, email, web chat, emerging technologies and related fulfilment".
Some of the work is already being done by Serco at its call centre in Bendigo, regional Victoria.
The insourcing of the two call centre contracts will take the Shared Services Centre into new territory; the provision of customer-facing services when it takes over the call centre in January 2016, shocking observers who expected it to confine itself to back office functions.
Industry executives cried foul at the news of the Serco contract, suggesting that "insourcing" was contrary to government policy.
But the Abbott government's "contestability agenda" is clear in its instructions to the bureaucracy's leaders that shared services should be in the mix in decisions about the future of Commonwealth functions.
Mr Cormann's office refused to comment publicly on the insourcing row, but Fairfax Media has been told the minister is happy to allow contracts to go to the organisation that can do the job most efficiently, regardless of whether they are Australian Public Service or private sector.
Posted by Veronica Silva Cusi, news correspondent
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Published: Tuesday, February 10, 2015