Resellers hesitant about Labor promises

Resellers hesitant about Labor promises

Labor's pledge to give SMEs a bigger role in federal government outsourcing if it is returned to power has been met with a mixture of scepticism, opposition and support from local resellers.

According to Opposition IT spokesperson Kate Lundy, if Labor is returned to power it will make major changes to the scheme which currently gives a prime contractor responsibility for many tiers of hardware and software systems.

SMEs have long complained that the system - which sees Government departments cluster IT systems and outsource them to a single prime contractor - seriously disadvantages them because they lack the resources to compete with large multinationals.

"It's my view that we must modify significantly the approach taken by this current Government to outsourcing and identify opportunities for industry growth as a key part of our considerations on outsourcing," Senator Lundy said.

"Indigenous IT business have been completely marginalised through the Government's clustered approach to IT outsourcing and we believe that unless Australian companies have the opportunity to tender in their own right for such work, their future is limited.

"We want to be able to structure the contracts in such a way that provides a plethora of opportunities for Australian companies to compete."

But Canberra resellers are not convinced. "I'd say political promises don't mean much until they come into fruition," John Doyle, senior customer engineer for Memorex Telex, told ARN.

Meanwhile, Ian Lister, ADE Technology's branch manager, said the strategy is unrealistic because smaller businesses do not have the economies of scale required to manage a large government outsourcing contract.

"To service them properly you really need to be big," Lister said. "We've grown a lot over the last few years which has helped us. A few years ago we couldn't service as well as we can now.

"We're also now owned by a US company that we can leverage for skills and resources which helps."

But Lundy did find support with one leading reseller.

"The current outsourcing policy doesn't give opportunities to anyone who's not already part of a cluster, " the reseller, who asked to remain anonymous, said. "Previously, the contracts were awarded to the best quote with the best service so anyone could be a winner.

"SMEs can be just as successful depending on the size of the federal government department they are involved in," she said.

Opposition leader Kim Beazley has also hit out at the Government's outsourcing strategy.

"The announcement that the Australian Taxation Office's IT systems are to be put out to a tender lasting just 10 weeks is a case of the Howard Government going too fast.

"John Fahey seems embarked on a headlong rush to mortgage as much as the Commonwealth IT sector as he can before an election is called, and he is doing so with little regard to the consequences of doing it so hastily. I think it is time to call a halt to such massive outsourcing programs until we know just what the real long-term impacts of the Australian industry and employment are going to be.

He called for a moratorium on future outsourcing of Commonwealth IT requirements until such an assessment could be made.

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