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Government reforms IT procurement in $650m boon for local start-ups
<img src="http://www.copyright link/content/d...icleLead.620x350.gy1hyf.png/1503387046998.jpg" alt="Assistant Minister for Digital Transformation Angus Taylor says the government aims to inject an additional $650 million ..." width="620" height="350" class="lazy620x350">
Assistant Minister for Digital Transformation Angus Taylor says the government aims to inject an additional $650 million annually into small Australian tech companies. Jeremy Piper
by Michael Bailey
The federal government has reformed its information technology procurement rules to give local start-ups a chance to win work worth up to $650 million a year.
From Wednesday, a cap of $100 million on the maximum value of government IT contracts has been introduced, and their maximum duration will be three years.
This would allow small and medium-sized businesses the opportunity to bid for smaller components of larger projects, according to Assistant Minister for Digital Transformation Angus Taylor.
"Government is targeting an increase of 10 per cent of its annual $6.5 billion IT spend to smaller operators," he said.

The number of IT panels would be reduced to lighten the administrative burden for start-ups, and more data-driven reporting used to hold incumbent providers to account, Mr Taylor added.

The reforms come after high-profile failures from some multinational IT suppliers to government, including IBM's census meltdown and Hewlett-Packard's repeated Australian Tax Office outages.
The opposition last week succeeded in setting up a parliamentary committee inquiry into the string of technology debacles, which also include the NAPLAN online failure, child support upgrades running late and over budget, myGov running significantly over budget and abandoning the gov.au project to simplify access to government websites and information.
Mr Taylor said the reforms were recommendations from a taskforce it established last year into IT procurement.
"The taskforce found a culture of risk aversion in government procurement had undermined the freedom to innovate and experiment. If we are to reward the entrepreneurial spirit, a new procurement culture is necessary," he said.

Local start-ups welcomed the liberalised procurement rules.
"For too long the requirements around tendering have favoured those who have the ability to bid for big deals," said Michael Jankie, chief executive of PoweredLocal, which helps retailers build customer loyalty through free Wi-Fi.
"These changes will help smaller companies graduate to the world of government procurement, which will in turn give them greater capacity to develop their products for export markets."
Smaller cyber security companies had long been locked out of Australian government work, allowing nimble hackers to get away with crimes like the recent heist of Medicare details, said Itay Glick, chief executive of cyber security company Votiro.

"Israel has measures in place to make sure bids from smaller companies are considered for government contracts, which has a knock-on effect for its famous tech industry," he said.
"This initiative puts bidding for government contracts within reach of companies like Votiro and enhances the Australian government's agility in its search for IT solutions that provide better value for taxpayers."