Denham Sadler
January 21, 2019

Labor to open ICT procurement

Policy

Labor to open ICT procurement

Kim Carr: Industry development and job creation goals attached to government contracts

The Opposition’s new “local projects, local jobs” procurement policy would help small Australian tech companies secure government contracts, shadow industry minister Kim Carr said.

A slew of Labor shadow ministers unveiled the new policy at a press conference in Queensland on Monday afternoon, signposted by a plan to halve the threshold that requires a bidder to develop a “plan for local jobs” in the regions the work is being undertaken.

All projects worth $10 million or more would require the bidder to produce a local jobs policy.

If Labor wins the upcoming election, successful bidders would also need to nominate an “on-the-ground contact” to engage with local SMEs to raise awareness of upcoming tenders and subcontracting opportunities for the project.

The bidder would also be required to undertake local labour market testing for new employees in the area.

“Locals are locked out of work as multinationals bring in their own suppliers. Labor believes that if local small and medium businesses can do the job competitively, then the job should be done locally,” Labor ministers said in a joint statement.

“If bidders on large government contracts can’t show how they’ll support competitive local business and local jobs, then they shouldn’t be getting contracts. It’s simple – no local jobs, no contracts.”

“While value-for-money for the taxpayer will continue to be paramount, a Shorten Labor government will put greater emphasis on buying local, employing locals and supporting economic activity in our regions. This is consistent with our international agreements.”

The new rules would benefit smaller Australian tech companies looking to secure government contracts, Senator Carr said.

“We want to buy Australian at home and abroad, and that applies to digital service providers as it does to any other sector. It applies to digital sourcing just as well as to steel or any other service that government requires,” Senator Carr told InnovationAus.com.

“We want companies to compete but to get a fair go when they do compete. We have to provide the support to businesses. AusIndustry’s job is to provide those services and not leave companies on their own to compete against these large international firms.”

The Australian tech sector has long been crying out for better access to lucrative government ICT contracts, with the $9 billion spent annually on tech products and services going mostly towards the big global players.

“The government spends a massive amount on ICT, and there are enormous difficulties for Australian firms who are trying to secure government contracts,” Senator Carr said.

“It’s fundamental that firms get access to skills and business capability, research and development, commercialisation and market access that governments should be providing to them to make them competitive,” he said.

“That applies to digital services as it does to any other sector of the economy.”

Senator Carr said the previous Labor government had made efforts to address these issues, but these policies had now fallen by the wayside under the Coalition.

“This government is not interested. Australian industry participation plans have fallen into disuse,” he said.

“Support for SMEs securing contracts from the government have fallen from about a third when we left office to a quarter of all firms. The number of firms actually securing contracts is declining.”

The federal government revealed its own policy specifically aiming to open up ICT procurement to local companies in late 2017, with a $100 million cap to be placed on government IT contracts and a maximum duration of three years.

It said this would allow smaller local companies to bid for components of a larger project, with an aim of 10 percent of IT spend going towards smaller operators.

But a controversial $1 billion whole-of-government deal with IBM announced last year seemed to contradict these goals, and was met with criticism from local tech players looking to access government procurement.

Labor also announced plans last year to require all companies bidding for contracts worth more than $200,000 to state their country of domicile for tax purposes.

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