SMBs awarded AU$37.5m in government contracts in 12 months

The federal government said it has awarded small to medium-sized businesses 75 percent of AU$50 million in technology contracts via its Digital Marketplace.
Written by Asha Barbaschow, Contributor

The Australian government announced in August this year it was going to be shaking up the way it procures technology services, offering startups and small to medium-sized businesses (SMBs) a larger portion of Canberra's technology spend.

On Tuesday, Assistant Minister for Cities and Digital Transformation Angus Taylor revealed that since August 2016, SMBs have been awarded 75 percent of AU$50 million in technology contracts published on the federal government's Digital Marketplace.

The Digital Marketplace is a direct way for startups and smaller tech firms to pitch their ideas and is aimed at getting SMEs involved in the government's IT spend. According to Taylor, 487 businesses with less than 200 employees are currently registered as sellers on the marketplace.

Taylor has previously touted the marketplace as an ecosystem where government buyers and sellers can "connect" with smaller suppliers.

"More than 100 small and medium-sized businesses have shared in 75 percent of the marketplace's contracts. By comparison, SMEs picked up 30 percent on Austender in 2015-16," the assistant minister said on Tuesday.

"This is a real achievement and shows we're breaking down some of the barriers for small businesses who want to win digital work with government."

In a statement, Taylor said he has written to all parliamentarians in the past week about the opportunities for local technology businesses, and said he is also targeting an additional 10 percent market share of the federal government's annual IT spend toward SMBs.

The government forked out AU$6.5 billion on IT last financial year.

Taylor, who earlier this year called the Australian government a "big bureaucratic beast", believes that in order for the government to make good on its promise to undergo a digital transformation, it needs to change the way it procures products and services.

To increase access to government contracts for startups and SMBs, the assistant minister said previously he wanted to get rid of "innovation-stifling" service provider panels.

"Panels are a really good example of well-intentioned policy leading to less-than-ideal outcomes," he said in March.

Panels are often used by the government for projects that lie within the AU$80,000 to AU$5 million bracket, as they have previously not been large enough to require a customised solution, or large enough that provider selection warrants intervention from government.

Taylor said this spend bracket is also the sweet spot for SMBs, as generally the projects can be turned around quickly, and allow for a single technology solution to a problem that is reasonably digestible.

"We know that by increasing our spend on SMEs, we can create a whole industry in this country. An allocation of 10 percentage points more of our IT spend -- of AU$9 billion -- to SMEs will be one of the biggest investments in innovation in this country's history," Taylor said.

"We've got to get our act together. We've got to create smaller, more modular projects, and we've got to reduce the barriers to entry through the current panel process."

Also this week, the federal government announced it had established a Small Business Digital Taskforce, to be headed by Australian entrepreneur Mark Bouris.

With its new taskforce, the government hopes to ensure more SMBs can "thrive in an increasingly digital economy" by talking to small business owners about the benefits of adopting digital technologies, and conducting a series of meetings, workshops, and hackathons with them over the coming months.

Joining Bouris on the taskforce will be EGM of Global Institutional Banking at the ‎National Australia Bank Spiro Pappas; Pip Marlow, CEO for Strategic Innovation at Suncorp Bank and former managing director at Microsoft Australia; chairwoman of Northern Territory-based energy startup Energy Renaissance Su McCluskey; former CEO of Tyro Payments Gerd Schenkel; Federal Member for Banks and House of Representatives Standing Committee on Economics chairman David Coleman; and Assistant Minister for Industry, Innovation and Science Craig Laundy.

The taskforce will report its findings to the government by February 28, 2018.


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