The National Treasury, the State Information Technology Agency (SITA) and Microsoft are renegotiating the existing contract between the parties, which will effect significant savings to the national fiscus on the government-wide software licences and services contract.

In addition, it is envisioned that the use of the amended contract will result in optimisation of Microsoft products and services within all spheres of government.

Since last year, the Finance Ministry, the National Treasury and the Office of the Chief Procurement Officer (OCPO) have concentrated efforts to affect greater efficiencies in government procurement.

The OCPO has been in negotiations with government’s Top 100 suppliers to effect savings and improve delivery.

This is in line with Finance Minister Pravin Gordhan’s undertaking to work with the private sector and all stakeholders in strengthening the South African economy by achieving efficiencies in government procurement and by aggregating diverse contracts which are spread across government into one sourcing structure.

This enables government to leverage economies of scales when negotiating with original software manufacturers (OSMs) and original-equipment manufacturers (OEMs).

Microsoft South Africa public sector head Niral Patel noted that supporting Treasury’s efforts in restoring the health of South Africa’s fiscus would contribute to a positive credit rating.

“We are working towards global wellbeing and to unlock the potential of people and countries. Therefore, we are delighted to contribute to enhanced services of government, adding value by reviewing current contracting practices with government.”

The new contract would leverage special pricing as per the volume of government spending on Microsoft licences and services; enable smaller government entities to leverage the full value of Microsoft products and services and benefit from the broader volume pricing; allow government departments to access some of Microsoft’s top technical skills at significantly reduced rates to ensure deployment and adoption of Microsoft products; and allow significant flexibility for organs of State to opt for on-premise, hybrid or cloud licensing solutions.

OCPO indicated that agreements with other OSMs and OEMs were in progress and announcements in this regard would be made in collaboration with SITA at an appropriate time.