An unlevel playing field

Technology One’s DiMarco says the company has achieved success overseas, through a lot of hard work and because of local government experience.

“Overseas governments aren’t going to look at a local company if their products aren’t considered to be up to scratch by their own government. I can’t imagine many companies succeeding in the US market without the local experience. If we didn’t have it we wouldn’t have gotten overseas work,” says DiMarco.

While local companies slug it out with the major vendors in the hopes of being awarded a government contract, some companies have gone through a different route and partnered up with major vendors to gain experience on government projects.

RuleBurst, an Australian owned software developer, was part of the IBM consortium which won a contract to implement a new management system worth $495 million over a four year period for the Department of Immigration and Multicultural Affairs.

Surend Dayal, CEO, RuleBurst said the Canberra-based business has had several government contracts and few state ones, since it opened for business in 1990.

“We worked on getting government business for ourselves for about ten years and recently we changed this by partnering with major vendors. Partly because it makes things easier and party because working with vendors gives us a scale to negotiate for federal contracts, which is a lot harder for smaller company to do by themselves,” he says.

“Even though we have good local technology, what helped us get noticed by our local government was obtaining work from the UK tax office, it should be the other way around,” he says.

Dayal believes there’s a perception that technology was invented and developed in the US. Government agencies are “adverse to risk because, no body got sacked for hiring IBM”, he says.

“Partnering with major vendors is worth it because the Free Trade policy is suppose to help us boom, but it’s really the other way around. While AusTrade is fantastic in helping local businesses overseas, there really needs to be same level of support in Australia,” Dayal says.

The battle local companies have with being awarded a federal and state contract is not insurmountable. However these local companies need to look hard at whether or not the risk is worth it because the Australian government’s ‘cultural cringe’ in relation to using local companies is becoming a thing of the past and is changing, albeit very slowly.

Industry advocates

Australian Computer Society CEO, Denis Farini, says the industry body has been advocating for a long time to give opportunities to SMEs in terms of developing the ICT industry. “The fact that you have a local government contract puts in a reasonable position for development overseas,” he says.

According to Farini, you can’t blame the government in certain circumstances for not offering a project to a local company, “but as long as they have a demonstrated track record, then the government should give advantage to local vendors”, he says.

A spokesperson from Nairn’s office responded by saying the government is committed to a policy that requires relevant agencies to source at least 10 percent of their purchases by value from SMEs.

“Data shows that the Government has consistently exceeded this target, with SMEs (including ICT SMEs) achieving more than 20 percent of the value of government contracts over the last five years”, says the spokesperson.

The Federal Government has developed a number of tools have been developed to assist business in tendering to government, including the ‘Selling to the Australian Government’ guidance booklet explaining how the government market works, and AusTender has identified all publicly available business opportunities.

The spokesperson says: “DCITA has also administered a policy for SME participation in government ICT procurements. This policy provides for levels of SME participation for contracts over $20 million. The policy provides for base SME levels of 10 per cent of hardware and 20 percent of software and services.”

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