Australia woos SME suppliers with bite-sized IT contracts

In a bid to attract SME suppliers, the Australian Government will break up large tech projects and contracts into smaller pieces, Angus Taylor, the Assistant Minister for Cities and Digital Transformation, has said.

“We’re working to break up projects to better understand our technology investment and work with Ministers and agencies to improve their proposals, breaking them up into much smaller, more digestible pieces,” he said at a tech conference this week.

“This is an agenda that the Prime Minister and myself have personally taken on as a top priority,” he added. Government technology business has been dominated by large IT firms as complex procurement and large contracts create high barriers for startups.

“The big tenders that Government has traditionally done are not digestible for Australia’s SMEs. Let’s face it,” he said. The “sweet spot” for SMEs are contracts between A$80,000 and A$5 million, he added. The Government wants to “break down the tendency to make ‘safe’ choices,” he explained.

“These so-called safe choices simply prohibit innovation.” It will build “independent integration capabilities” so that the smaller projects can be pulled together into the whole system.

Australia will also review the use of panels in government procurement. This approach appoints a number of suppliers in one go, with limited opportunities to add newcomers later.

This process is yet another big barrier to smaller companies getting access to government contracts, according to the Minister. The Australian Government spends a total of $9 billion a year on public sector ICT.

If 10% of this were to be spent on SMEs, it “would be one of the biggest investments in innovation in this country’s history,” he noted.

Last year, the Government launched a platform called the Digital Marketplace to simplify government tech procurement for startups and SMEs. The platform has “many millions of dollars” of contracts and 93% of the business has gone to small and medium businesses, the Minister said.

“It demonstrates how technology can level a playing field and the Government can stimulate innovative companies without resorting to handouts,” he said.

Image by Steven Zwerink - CC BY-SA 2.0