Government claims better SME access to ICT deals

The federal government has thrown cold water on critics of its ICT tendering policies who claim the system heavily favours multinationals, releasing a report saying small-to-medium enterprises (SMEs) are winning a growing proportion of government ICT contracts.

The federal government has thrown cold water on critics of its ICT tendering policies who claim the system heavily favours multinationals, releasing a report saying small-to-medium enterprises (SMEs) are winning a growing proportion of government ICT contracts.

The report -- released yesterday by the Minister for Communications and Information Technology, Senator Helen Coonan -- analyses SME participation levels in the Australian government ICT procurement market for the years 2001-02 and 2002-03.

The report is part of a raft of initiatives by the government to trumpet its commitment to small to medium enterprises; recently it started the process of amending the standard government IT contract to reduce the unlimited liability requirements for all bar the largest, most risky and most complex of deals. Over recent years, the government has come under fire over small-to-medium enterprise access to contracts, with one notable instance being a firestorm of criticism of the Department of Defence in 2003 over allegations that tenders were being constructed to favour multinational ICT heavyweights.

However, according to the report, in 2001-02, 28 percent or AU$526 million of ICT procurement were gazetted to SMEs, while 30 percent or AU$556 million were gazetted to SMEs in 2002-03.

For the same period, Telstra's share of the Australian government ICT procurement market was 5 percent or AU$98 million and 9 percent or AU$173 million respectively.

The figure is higher than the total SME participation levels of 25 percent across all government contracts, according to Department of Finance and Administration data from 2001-02.

Eleven government agencies representing about 80 percent of annual government ICT procurement were surveyed. The report said that the total expenditure on ICT across the 11 agencies was AU$1.9 billion in both 2001-02 and 2002-03.

These results do not include SME participation in contracts in which the major contractor was not an SME. It also stated that SME participation is also likely to be higher in the smaller contracts not measured in the report.

"The government does not believe it is in the Australian ICT industry's long term interests to be given subsidies through preferential access to government procurement. Nevertheless, the government is facilitating SME access to its markets through a range of measures, including a guide to small companies on how to sell to government and electronic tender notification systems," Senator Coonan said.

"These latest results indicate SMEs are competing successfully for ICT business under this approach," she added.

Senator Coonan also announced the formation of the ICT Skills Foresighting Working Group which will work with the Department of Communications, Information Technology and the Arts (DCITA) on "examining trends and future developments of Australia's ICT sector and their implications for ICT skills development".

This will include a review of skills demand, the fit between industry skill needs and existing training and possible options for "better meeting the future skill needs of industry".

"Global competition and changes in demand mean workers in the ICT sector are required to constantly update their skills to keep up with the changing nature of this sector," Coonan said.

The project will provide an analysis of "emerging ICT requirements" and "will help to improve the identification of skills in demand and the options for training and other initiatives to enable more effective ICT skills development."

Prior to last year's election, both the Howard government and the opposition promised to "find ways to make professional indemnity more accessible to SMEs" if they were elected.

Labor and the coalition government pledged last year to "limit professional liability attached to government IT contracts according to the size of the enterprises bidding for the work".

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All