Buy Australia Plan has made no difference for tech SMEs: Survey

James Riley
Editorial Director

The Albanese government’s signature Buy Australian Plan and the newly-created Future Made in Australia Office (FMiAO) have made no material difference to the experience of local tech SMEs selling into federal departments and agencies.

More than 75 per cent of local tech SMEs selling to government say the procurement process remains ‘complex, difficult and slow’ despite the focus on improving outcomes for Australian suppliers, according to Government SME Procurement Survey 2024.

Asked whether the Buy Australian Plan or Future Made in Australia Office had made it easier for Australian companies to sell to government, 81 per cent of respondents said ‘No’. Just 5 per cent of companies agreed.

The Government SME Procurement Survey is the fourth conducted by InnovationAus. The survey was open to responses between February 19 and March 8 and attracted 81 respondents. The 35 pages of survey results can be downloaded here.

This year’s survey results have been eagerly anticipated, given the focus that the Albanese government has put on procurement reform. The Buy Australia Plan and FMiAO had been in operational for more than 18 months.

Responding to the statement “The procurement focus of the current Albanese government has made it easier for Australian SME tech companies to sell the federal customers,” 86 per cent of the companies participating in the survey disagreed (with 40 per cent ‘strongly disagree).

Many respondents were unaware of the Buy Australian Plan or the FMiAO. Some 87 per cent of companies said they had no communications from or with government in relation to these policies. publisher Corrie McLeod said the Government SME Procurement Survey was not put forward as a definitive dataset. But the sample size is large enough to provide a sentiment snapshot of the experience of local companies selling to government.

“The survey purposefully allowed respondents to leave anonymised comments about their experiences selling to government,” Ms McLeod said.

“While the empirical data reflects how difficult procurement practices can be to change, the comments provided by these tech SMEs provide real insights into this difficult issue.

“InnovationAus conducts these surveys of local tech SMEs as a positive contribution to the broad discussions on procurement rules, and to help inform policies that use procurement policy as a lever to drive better industry development outcomes.”

Asked ‘How would you rate your experience in selling products and services to government,’ 54 per cent of respondents called it either ‘negative’ or ‘very negative’.  Just 10 per cent of respondents said the experience was positive, with 27 per cent saying it was neutral.

One company commented: “This depends on the agency. Some are easy and some are overly complex and too hard to do the procurement exercise with (Defence is a classic example of making it hard for SMEs to even respond to tenders).”

The survey underlined the importance of having government as a customer in helping to drive credibility for sales in other sectors.

Asked “Does having government as a customer provide credibility to your sales in other sectors?” 36 per cent of companies said ‘Always’, 26 per cent of customers said ‘Usually’, while a further 17 per cent said it was important sometimes.

The full results of the Government SME Procurement Survey 2024 can be downloaded here.

There are a couple of stand-out results that will be of concern to government around internal capability within the public service. Asked to respond to the open question “The capabilities within government to adopt and integrate my product/service are”, more than half (53 per cent) said “limited”.

A typical comment left by a respondent read:

“Procurement officers have no idea (or interest) in what they are buying. They interdict the path to the source of the need, getting in the middle to ensure the supplier and customer cannot speak to each other.

“The low standard of the procurement class is a shock and requires super urgent attention. APS capability has been reduced to buying things (chequebook bureaucracy) and it is very poor even at this task.

“Calls for a procurement professional stream are simply words. Nothing changes over time.”

Do you know more? Contact James Riley via Email.

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