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SMEs have "fair opportunity" in small agency tenders, Fahey says

SMEs have "fair opportunity" in small agency tenders, Fahey says

-- The Federal Government has told the IT industry it is unable to bar major players from bidding for its Small Agency IT infrastructure outsourcing program, but it is determined to give small to medium enterprises (SMEs) a fair opportunity to compete.

And Finance Minister John Fahey has said although some SMEs might be concerned about the greater capacity of large companies to absorb losses and their buying power advantage, bidding for small-agency business is likely to be very competitive.

"It would be very wrong of me or anyone in Government to say if you can make savings . . . you can't achieve those savings because it is a multinational that's bidding for your business," he said.

"But the testing we've done suggests SMEs will be very competitive in this and take the lion's share of the business that flows from it."

Fahey said he will not resile from his commitment to ensure Australian SMEs are given the opportunity to actively participate in this program. But he said it isn't entitlement, and SMEs will have to satisfy the same threshold criteria in terms of technical quality, risk and cost savings as applied to all tenderersFahey made the remarks at the release of a Project Guide and Resource Kit developed by the Office of Outsourcing and Asset Sales (OASITO) to assist small agencies in conducting competitive tendering processes for their IT infrastructure requirements.

Under the initiative about a dozen agencies with up to 300 desktops will have the choice of grouping with other agencies -- and will be encouraged to do so -- or of individually undertaking competitive tendering processes to review the provision of their IT infrastructure services. A further 35 agencies with 100 desktops or less may either choose to use the Project Guide or follow standard Commonwealth Procurement Guidelines, and also choose whether to limit the competitive tendering process to IT infrastructure maintenance and support, although full outsourcing will be encouraged.

Unless other decisions of Government affecting individual agencies precludes it, small agencies will be required to complete the competitive tendering process and be operational with their outsourcing by July 1999, provided the business case is proven.

Fahey rejected industry assertions that the OASITO evaluation processes to date had failed to produce a fair comparison of tenders against internal agency operations, made after the Government decision to discontinue the tender process for the Department of Employment, Education, Training and Youth Affairs, and Employment National. The tender process -- estimated to have cost at least $5 million in total -- was abandoned after the Government received just one bid for the contract, from IBM-GSA. Industry said the timing of the tender was largely to blame.

"In the recent DEETYA tender, we demonstrated that the Government is committed to ensuring a project must deliver an acceptable technical solution, substantial savings and industry development before a contract will be awarded," Fahey said.

"Extensive cross-checking and independent assessments of agency cost baselines and service levels are designed to ensure the evaluation is scrupulously fair and even handed. Probity considerations are paramount at all stages of the process."


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