Govt procurement must change for growth

Software Queensland chairman John Vickers has called for a re-evaluation of how the Queensland Government's IT systems are procured, saying that the current system doesn't foster growth for the industry in the state.

At a recent speech to the ICT working group, Vickers said that the industry wasn't achieving the growth it could. He noted that the Queensland ICT industry was shaped like an hourglass — many large players, many small players, but only a meagre number of medium-sized players with 100 to 200 employees, a market capitalisation of $200 million and revenues between $100 million and $200 million per annum. It was these medium-sized organisations that sat in the growth sweet spot, he said, and there were just too few of them.

Part of the problem with this was the way that software was purchased by the government, according to Vickers.

A procurement system that checks if an organisation complies with government requirements, if it is capable, and then how much it's asking for the product might work for physical goods such as printing paper or cars, but it doesn't work well for software and services, which are a more intangible commodity, he said.

"It needs to be more sophisticated," he told ZDNet Australia, adding that buying a value based on ability, relationship and trust rather than buying a price, because price could be a slippery commodity.

For example, the budget of the troubled Queensland Health payroll project began at $60 million, but has blown out to many times that amount.

Vickers raised a number of questions about the tendering system:

• How many times have tenderers bid low to secure a contract and subsequently changed the price later in the game, putting it in the range of another vendor's bid?
• How often are requests for quotation withdrawn after tenderers spent large amounts of money on them?
• Why has early engagement become so document-based and formal, when really early engagement should be a discussion with the industry?
• Why it is compulsory to take part in a request for information to be able to later bid for the work involved?
• Why is intellectual property included in requests for information often regurgitated in the request for quotation for all to see?

"A company's [intellectual property] and ideas cannot only inform the agency, but the competitor as well, so information is held back and the overall outcome is poor and expensive," he said.

He also suggested that the state's mantra of sharing ICT between agencies should be replaced with sharing software before buying locally and internationally or building one.

If efforts were made to address these concerns in a new amd improved procurement process for information technology, then the industry would be behind the government 100 per cent, according to Vickers.

"It is about 'we' not 'them and us'," he said. "We need to behave differently to once again become the Smart State and grow our ICT industry."