Education squeeze

Education squeeze

Victoria is not the only state in which the government is squeezing local IT suppliers out of the PC market. White-box assemblers around the country have expressed concern about how easily swayed most state education departments are by the promises of multinational vendors.

Resellers expressed anguish over a recent deal in Victoria, where Acer won a tender to supply 23,000 personal computers to the Department of Education, Employment and Training (DEET), in what many describe as controversial circumstances (ARN, February 27 and March 6 editions).

Robert Hume, director of Bit Play Computer Systems in Mooroolbark, Victoria, said the Victorian Government's large deals with the likes of IBM and Acer are putting local suppliers that serve the education market out of business. He estimates that he is selling 10 per cent of the volume he used to sell into the education market two years ago.

"It has been pretty disastrous," he said. "And I am only one small part of the equation. There are flow-on effects to my suppliers [local distributors such as Westan and Achieva], who don't get as much business from me as a result."

Assemblers in New South Wales, South Australia, Western Australia and Queensland claim they face the same struggle to gain government business.

While recent deals reported in ARN brought about allegations of a conflict of interest, resellers said the other losers in such tenders are the customers themselves.

David Wein, director of Coretech, the largest supplier of ICT to education in Queensland, is disappointed with the growing trend to move toward large, price-based contracts with multinational vendors.

"These deals are politically attractive but they don't save money," he said. "In fact, what they do is degrade the ability of schools to properly integrate technology into the curriculum by removing any value that the local suppliers were adding to the equation."

Wein rebutted Acer marketing manager Raymond Vardanega's comments in last week's ARN, which stated "the customer's decision [was] to purchase Acer".

"The real ‘customers' are the schools and the communities associated with them, and if it was up to them, the decision would be very different," Wein said.

James Wither, owner of South Australian assembler Prime Computers, cited examples of schools and health institutions being tied down when forced to use exclusive government-appointed suppliers. "Let's say a school has a server and has a short time-frame to get it," he said. "The endorsed supplier can get away with charging seven times what is reasonable to lease another one to them, but they can't get it for seven days. If it wasn't a contravention of the agreement between the government and the endorsed supplier, the school could have actually purchased the system from us rather than leased it. They would pay less for it, and they could get it that day."

Wither backed up Wein's comments, stating that schools take incredible risks to subvert the system because they are so keen to work with local suppliers. "Schools will often buy components rather than complete PCs from local resellers as it is a breach of supply agreement to buy a PC from anywhere else. On the sly, they also request that the components be assembled before delivery," he said.

As another example of a barrier to pitching and winning such deals, Wither says there is a $2500 fee to have the right to tender for government contracts in South Australia. "In the private business world, asking for a cash payment to join a list of tenderers would be considered a criminal offence," he said.

All the resellers that spoke to ARN said the current situation is costing them money, but, even more frustrating, they have had to cut staff to compensate.

"They keep telling us about the new jobs they'll create when they sign with a multinational," said one reseller, who asked not to be named. "What about the jobs that are lost in companies that were already doing this work?

"I feel like I should take them out the back and show them the empty workbenches. Tell them that this is what their policy achieves. A person used to work here."

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