Govt tendering too expensive for small fry

It's an outrage that IT organisations sometimes have to face spending more than NZ$100,000 on a tender process to gain work in New Zealand.

It's an outrage that IT organisations sometimes have to face spending more than NZ$100,000 on a tender process to gain work in New Zealand.

Computerworld NZ has highlighted the case of Wellington City Council upgrading its website to allow some online payment services.

There were claims that it has cost one organisation NZ$50,000 to go through the request for information and request for proposal process to bid for the work. Other companies have said that they have spent more, as much as NZ$100,000 in one case. The NZRise lobby group of IT firms says that such costs discriminate against small, local firms.

Now, such costs do seem excessive, but the story provides no breakdown of how such costs mount up.

We also see nothing about what the actual contracts might be worth, whether it is a few hundred thousand or many tens of millions of dollars.

If the tendering process amounts to a couple of percentage points of the total contract, then it might seem fair.

After all, there have been quite a few government IT project failures and you can understand central and local government wanting to be absolutely certain that their supplier is going to be up to the job and will successfully deliver a project that will be on time, within budget and will do what the client seeks.

Even considering this, however, there's no excuse for cases where, after organisations have spent tens of thousands of dollars preparing their bid, the government doesn't go ahead with the work.

So there certainly seems a trade-off between the need of ensuring the job will be done well and placing an undue burden on potential suppliers, particularly small, local ones.

But when we see such huge costs bandied about, it looks like the balance is loaded too much against the potential suppliers, particularly the small ones.

Both central and local government need to see what they can do to make the tender process simpler and cheaper.

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