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Datacom appears poised to become the new software licence supplier to the Auckland Council Group, which includes Auckland Transport and Watercare.
The deal seems likely to almost double Datacom's current business at the group.
As reported by Reseller News in April, Auckland Council embarked on a group-wide software license procurement for the first time to use the scale of the group to cut a better deal.
Datacom did not confirm or deny its status on the deal at the time of publishing this article.
Auckland Council had bought its software licenses from Insight Enterprises in recent years while Auckland Transport appeared to have bought from Spark and Watercare from NTT.
Minutes of a council committee meeting on 7 June revealed the tender covered software from Microsoft as well as from Adobe, VMware, Autodesk, Veritas and Citrix among others.
“The agreement with Insight is due to expire on 30 September 2022,” the minutes said. “There is now a potential opportunity to realise significant financial savings.”
Auckland Council has spent $6.3 million with Insight so far this financial year with one month’s spending left to report, according to its procurement disclosures.
Council staff issued a closed request for proposals (RFP) to the six resellers available through the government’s Microsoft cloud, software and services agreement (MCSSA) panel on 30 March. Responses were required by 11 May.
In addition to the three incumbents, that panel also included Cyclone Computer, Fujitsu NZ and Datacom.
Three proposals were received, all meeting the requirements of the RFP. The proposals were evaluated against non-price attributes first, weighted at 55 per cent, with pricing assessed separately, weighted at 45 per cent.
The recommended contract term was two years with a provision for one extension of three years, subject to satisfactory performance by the supplier.
The procurement approach considered sustainable procurement objectives and recognised the contract also presented an opportunity to work together with the reseller to deliver positive outcomes for Māori through employment and workforce development, the minutes explained.
While the recommended supplier is not named, the minutes name a range of organisations the company had engaged with to achieve these goals.
A review of these organisations websites, news and social media reports showed Datacom was far more consistently mentioned as a supporter or sponsor than any of the other panelists.
Datacom has been making serious inroads into the council as a supplier of ICT services over the past few years. It earned more than $7 million from the council so far this financial year, up from $5.4 million in 2021, $4 million in 2020 and $1.4 million in 2019.
However, it appears to have minimal engagement with the two other members of the group, Watercare or Auckland Transport.
“Auckland Council’s procurement and ICT staff will notify all successful and unsuccessful suppliers of the outcome of this procurement, subject to the approval of the supplier recommendations outlined in the confidential report,” the public minutes said.
“A transition plan will be enacted where required, working with both current and future suppliers to ensure there is no disruption to existing services.
“A debrief meeting will be held with all unsuccessful suppliers to provide them with feedback on how to improve their bids in future, and to keep them engaged for future opportunities for delivery of services to the council.”
The new contract was expected to commence from 10 June.
In their responses, suppliers were required to identify their commitment to Te Tiriti o Waitangi, activities they had implemented to support their commitment and how successes were monitored.
The responses revealed a range of focus and commitment to social objectives and to Māori.
“From the evaluation of the proposal and through following clarifications, the recommended supplier has evidenced a strong commitment to Māori objectives,” the minutes reported.
Auckland Council was contacted for comment last week but has not responded to questions.
Dean Graham, Insight Enterprises sales director for A/NZ, said the company had been notified it had not been successful in its bid.
"We saw the process run as rigorous; unfortunately, this time around our services and approach were not what was sought by the combined entities," he said. "We have greatly valued working with Auckland Council over these years and will do all we can to ensure there is a smooth transition for the council."
