Initiatives designed to teach small local IT
providers how to engage with the South Australian government have
been described as nothing more than pre-election
Adding to the disenchantment are strongly supported rumours
that no companies from the state feature in the next round of the
long-awaited AU$1 billion in IT outsourcing contracts.
In 1995 Texan IT services giant EDS won a much-vaunted nine-year whole-of-government contract to provide services to about 80 state agencies.
The outsourcing deal was originally valued at AU$565 million and included local industry development criteria which have largely been considered unsuccessful.
The decision to carve up the contract was announced in October 2003, raising hopes that South Australian companies would gain business from the fallout, and a new entity, FutureICT, was created to divvy up the work.
The selective outsourcing process has been described as -transparent as a brick wall", binding bidders to iron-clad non-disclosure agreements.
Local companies will be "devastated" by the outcomes of the
FutureICT program, say several industry association
representatives. The result is particularly galling while the
Labor government, on the cusp of an election campaign to be
announced next week, is spending a reported AU$200,000 on a Buy
Local advertising campaign.
"We have [Premier] Mike Rann saying we should be buying local
and supporting local companies but when it comes to his own
government, they find every excuse as to why not,"said David
Raffen, chair of the ICT Council for South Australia and managing
director of computer services company Microarts.
"I'm being told to buy South Australian eggs and oranges but
he won't buy South Australian computers."
Government CIO Grantly Mailes claims that free trade
agreements are preventing him from getting behind the
"We [have] a number of
multilateral agreements within the Australian government and
international free trade agreements. As a small economy, SA can't
afford be protectionist -- we rely on national and international
export and we would be the losers in the long run in a
Mailes claimed at a local industry meeting that only 13
percent of the State's IT spend is controlled by government,
while the conventional wisdom is that the figure is closer to 50
Brenda Aynsley, chair of the state branch of the Australian
Computer Society, is currently running a pre-election survey on
the parties' positions about IT and its role in the economy.
"I understand that the government CIO is risk averse, but we
will never have a homegrown Tier 1 company in South Australia
without the support of government business," she said.
The government has held a series of information seminars for
small businesses over the past few weeks, including an SME
e-procurement forum and Small Innovators forum.
"Initiatives are fine, but where are the results?" said
Raffen, whose company was part of an IBM-led consortium that
included several local companies in its bid for FutureICT
"Companies currently providing services will be absolutely
devastated by these outcomes and will have to totally reinvent
themselves if they are to succeed. The only carrot the government
is handing out is possible software development."
Vectra is one company that appeared well positioned to win
security services but finally lost out.
"Vectra provides services all over Australia and Asia but
they're not good enough for the South Australian government,"
Raffen said. "I think they [the selection panel] are not just
risk averse, they are positively biased against SA
Chris Smerdon, managing director of Vectra, preferred not to
comment, saying that he wants to look forward not back.
"I just want to know what's in scope, what's out of scope and
what is worth local companies pursuing," he said.
It is unlikely any awards will be publicly announced until
after the state election on March 18, but the rumour mill says
that the first winners of the FutureICT contracts are:
- Mainframe contract to remain with EDS until 2007
- PCs to Hewlett Packard (HP), Dell and IPEX
- Laptops to Dell and Acer
- File servers to HP
- Managed network services for both core services and
agencies to Dimension Data
- PABX maintenance support to NEC
- Messaging to Telstra
- Distributed computing support services to Volante
Winners of contracts for Internet services, hosting and
security are not yet known.