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US$30 billion US homeland security market opens up -- a little

Despite announcing yesterday that the US$30 billion US homeland security sector is open to Australian technology suppliers, the Australian Trade Commission (Austrade) has admitted that suppliers face regulatory restrictions and stiff competition with companies from up to 60 other countries on the US government tender list.

Despite announcing yesterday that the US$30 billion US homeland security sector is open to Australian technology suppliers, the Australian Trade Commission (Austrade) has admitted that suppliers face regulatory restrictions and stiff competition with companies from up to 60 other countries on the US government tender list.

Austrade said in a statement yesterday that, pending the approval of the controversial Australia-US Free Trade Agreement (AUSFTA) "Australian suppliers will have greater access to these US government procurement opportunities in the federal, state and local markets".

However, officials from the department told ZDNet Australia yesterday there was no guarantee that Australian suppliers would be considered for tenders and that they faced intense competition from a large pool of countries.

Katharine Heather, Austrade senior export advisor-ICT, said there would be no quota for consideration of Australian vendors should the AUSFTA be passed, saying only that "various relaxed regulations" will be implemented.

Austrade senior project officer, James Osinga, said Australian companies' biggest competitors for US government tenders would be from Canada "because of its proximity to the States" and Mexico "for it's lower cost of labour".

Yet Osinga maintains that Australian suppliers will still be "viable contenders".

"Australia has a lot of know-how and there already is quite a lot of demand for Australian products in the US," he said, adding that around 50-60 Australian businesses have subsidiaries in the country.

Heather said that companies such as Mincom, ISYS, Protocom, Future Fibre Technologies and Quantm have experienced success in the US.

"There are already a number of companies selling to US departments, and we're trying to increase that," she said.

However, according to Osinga, there are tough restrictions placed on Australian vendors as to which tenders they can compete for.

"There are some restrictions to Australian companies and various other countries on the list, for example, they can't tender for any defence department procurements if the products relate to hardware," he said.

According to Osinga, Australia will only be added to the tender list once the AUSFTA is signed. However, he said, only six of the other 60 countries on the US tender list have signed free trade agreements, with many of the other countries trading on bilateral agreements instead.

Austrade said it is organising seminars for "industry experts from the Greater Washington region and Australia to share their experiences" in dealing with the US, to educate Australian exporters on the "challenges involved in doing business with the US government".

Heather said the challenges include "complex distribution channels" a "high level of competition", a "long sale cycle" and "finding the right US partner".

"It's very important to have a demonstrable return on investment, and because of the long sale cycle we are trying to get companies to get in as early as possible," she said.

The seminars will run in Melbourne, Canberra, Sydney, Brisbane, Perth and Adelaide through November and December.

Heather said Austrade is also organising a showcase of Australian products in Washington next year to promote the presence of Australian suppliers. She said the group is currently recruiting companies for the exhibition to be held in April.