It is little wonder then that IT outsourcers, service providers and systems integrators are excited by recent changes to procurement procedures which enable companies with all manner of expertise receive pre-certification as government providers.
Not only has the approach, entitled Spirit, received the support of state-based and national players such as IT outsourcers ASG and Kaz Computer Services, global companies such as Unisys joint venture Unisys West have also thrown their support behind the program.
-Having worked on both sides of the fence I see a lot of merit in Spirit," said Don Beer, customer relationship executive with Unisys West. -For once there is a consistent policy and contractual framework around government contracts."
While he reserves criticism of some of the reporting requirements, Beer predicts the program will provide tangible benefits to government and industry alike.
-It should make it a lot easier to work for government and significantly reduce the cost of the tender process," Beer said. -That's not to say companies won't have to be proactive when it comes to marketing to government, just that the contractual process will be more streamlined."
Having participated extensively in the industry consultation process, Geoff Lewis, CEO of Western Australian outsourcer ASG, said the small-scale approach has also allowed the government to mitigate the risk associated with large-scale contracts.
-The overall costs have been significantly reduced because they are not being charged for insurance to cover the projects," Lewis said. -The trend away from large contracts is not just in the public sector, we are seeing it in the private sector as well."
Lewis also pointed out that the consultative approach taken by government in designing the framework had led to a high degree of trust developing between industry and the newly formed Department of Industry and Technology.
-There have certainly been a lot of discussions when it comes to the make-up and the structure of the program," Lewis said.
Kaz Computer Services is predicting the Spirit approach will lead to an expansion of the company's operations in the state. Lagis Zavros, state manager for Kaz in WA, said the Spirit system is structured in such a way as to provide a balance between competition and access.
-There is a pre-qualification agreement, so as a provider you need to do a lot of the work up-front," Zavros said. -But then there is no need to repeat that work every time you approach a government department."
Spirit project director Diane Jamieson said that while multinationals can still expect to get substantial work in the state, the approach was designed to increase competition by enabling smaller companies to participate in the tender process.
-If you bundle things up into large tenders, smaller companies can only be involved as subcontractors and end up being in control of the larger company," Jamieson said. -This is an attempt to make it easier for SMEs to get government work, but it is not about trying to remove any other part of the market, there is still a clear role for the multinationals."
The swing in the outsourcing pendulum
Remember back in 1998, when a AU$40 million hole was left in Treasury when the Commonwealth Government decided to pay US consultants to advise them to create IT procurement tenders large enough to preclude the participation of Australian companies?
Following a damning Auditor General's report the government announced a -small scale review", which ended in the break-up of the controversial departmental Clusters, and handed a degree of self determination back to individual agencies.
However, two years after the controversy hit its peak the Federal Minister for Information Technology, Senator Richard Alston, still prefers to stare sheepishly into his lap than answer questions on the role of government IT procurement in fostering a vibrant IT industry. Rather than address the question at the recent World Congress on IT in Adelaide, Senator Alston remained silent as panellists from Ireland, Israel, Malaysia and South Africa provided their take on the issue.
At one stage the Federal Government's relentless commitment to Whole of Government outsourcing even led to an attempt to outsource research facilities at the CSIRO, and the IT infrastructure of the Defence Forces.
It was this same dogmatic but naive commitment to free market economies that saw Liberal Governments at a State and Federal level design procurement policies which blatantly favoured large international players, over smaller, but equally competent Australian companies.
ASG's Lewis summed up the frustration felt by many Australian companies by pointing out such policies would be unthinkable in most countries.
-We were dealing with the future of Australian IT," Lewis said. -I don't think you would find the US outsourcing government business to French companies, so I don't see why we have been doing it here."
According to Lewis, there has been a general trend away from large-scale IT outsourcing since the release of the Humphry Report, which branded the Federal Government's Whole of Government outsourcing policies as costly and unfairly biased against Australian companies.
The Western Australian approach experiments with a promising mix of competition and accessibility appears representative of that swing. For now, at least it has industry support.
-I think it is an approach which fits the Australian model nicely," said Kaz's Zavros. -Rather than apply a one-size-fits-all policy, it allows for more flexibility for the government departments and for the industry. It looks like industry is finally being listened to."
Is this a beat up ? Mr BEER lauding the merits of SPIRIT ??