A preferred supply arrangement between several large computer manufacturers and the Queensland Government has come under fire from the state’s resellers, who have pointed out what they see as inconsistencies in the tender process.
The preferred supplier arrangement, managed by the Queensland Department of Public Works (Queensland Purchasing) on behalf of Education Queensland, aimed to collectively negotiate with a number of suppliers for about $30 million of computer-related goods for use in Queensland schools.
Hailed as an enormous success by the Government and those panellists chosen as preferred suppliers, other resellers in Queensland claim the process has all but destroyed the businesses of many education resellers in Queensland.
The winning panellists for the tender - as reported by ARN in the March 12 edition - are Acer, Apple, ASI, Coretech, Dell, HP, Optima and Toshiba. While most of these vendors have promised work for local resellers in fulfilling their share in the deal, two in particular have riled the local industry.
The original tender documents, cited by ARN, clearly specify on several occasions that the suppliers would not be chosen on price alone. While that was not the only criteria, emphasis was placed on the provision of a “comprehensive dealer network” to protect the local industry.
The Government also asked that the suppliers show how their inclusion would result in the further development of the Queensland ICT industry and employment opportunities for Queenslanders.
The dealer lists supplied by the winning contractors show that Dell Computer, a long-time advocate of direct sales, have no independent dealers in Queensland. Several large local assemblers, with comprehensive dealer networks, are now asking why Dell has been included while they have been effectively pushed out of the education market.
Dell is not the only choice that has puzzled local resellers. Channel-focused PC vendor HP has listed only one reseller, Data#3, to provide services to Queensland schools. The decision has left HP’s other Queensland resellers reeling.
A spokesperson for Education Queensland said that Queensland Purchasing had conducted an exhaustive process on behalf of Education Queensland. All aspects of the process were comprehensively assessed by an independent auditor – the Industrial Supplies Office (Queensland).
“When you take an original agreement of 30 preferred suppliers and say you are going to cut them down to eight, there is always going to be some people who consider themselves as losers,” the spokesperson said.
Education manager for Elite Computers, Colin Alley, claimed to be the most livid of all of those businesses that had been edged out of the Queensland education market.
Elite has an extensive dealer network around the country that earn a large proportion of their revenues through the education market – at least 15 of them are based in Queensland. The company has drafted a formal letter of complaint to Queensland Purchasing, Education Queensland and the State Ombudsman. “We don’t see how it is possible that some of these vendors met the criteria,” he said.
Queensland manager for BCN Technology, Bob Harris, said his company missed out on the panel despite having an extensive 450-strong dealer network around the country which - unlike HP - the company actually planned to utilise.
BCN had even offered to build new production facilities in Queensland to aid the fulfilment of the contract if successful. These would provide new manufacturing and assembly skills and employment to Queensland. “Our Premier wants Queensland to be known as the Smart State,” Harris said. “He even wants us to print that on our number plates. But here they are giving all the business away. I don’t see how someone like Dell could do anything for our State.”
A spokesperson for TPG said that the company was not prepared to comment on the tender as it was “trying to do something positive about it.”
Alley said the Government’s actions would have a disastrous effect on local companies.
“Our own channel has inundated us with complaints, that they can no longer do business with schools because of this,” he said.
“There has been no consideration for the small dealers in this State who have always served the education market,” Harris said. “At least four of five resellers on our books will have to completely change their direction and their business model to survive - they were 100 per cent reliant on the education market for the last five or 10 years.”
For more on the Queensland tender, see this week's issue of ARN.