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Love me tender

Love me tender

With Government expenditure representing the lion's share of the IT economy, and locally produced goods at the top of their shopping list, marrying the two could prove profitable for whoever can crack the tender process.

Everyone knows the old adage that “nobody was ever fired for buying IBM”, but if you look at the numbers, we are much better in Australia at buying our own IT products, than we are at buying IT imports. Of the $77,500 million we spent on IT in 2001, just over $50,000 million was spent locally.

The largest proportion of IT spend by far is attributed to the Government sector. According to the Australian Bureau of Statistics, the government IT spend pie is large, growing and neatly divided across hardware, software and services. Contractors and consultants offering services and support scored $1678 million, hardware took $1209 million and software scored $1191 in the financial year ending June 2003.

With Federal tenders representing everything from the Tax Office to the Fisheries Department, state tenders covering hospitals and schools, and council tenders covering their own offices government contracts come in all shapes and sizes. But there are some tricks to the trade.

Tony Tesoriero, national sales manager for systems integrator, Paragon Systems, said the key to winning government business lies in ensuring you meet all mandatory requirements of the tender. However, he said it is also necessary to establish 100 per cent confidence in both the initial product and the ongoing servicing.

“The first tender is always the hardest to win, but once you show you can do it repeat business is where you make your bread and butter,” Tesoriero said. “Endorsements and accreditation assist in establishing a track record. Support from your vendor partners is also fundamental, so you can assure the department that you will get supply and not leave them in the lurch.”

In a similar vein, Cornel Ung, founder and managing director of PC manufacturer Optima, said there are three fundamental rules when it comes to winning government business.

“First you have to read the tender very closely to make sure you fully understand and deliver on the requirements,” Ung explained. “Then make sure you offer to deliver what the customer wants on their terms, and if you want to work for them again make realistic appraisals, because they don't like surprises.”

Ung said developing relationships and finding support from vendor partners is also important, and can help with the costs of the tender process.

However, both warned against placing too much emphasis on relationship building or parochial sensibilities.

“There are always rumours that the tier-one vendors spend a lot on wining-and-dining at a very high level, but when it comes to the tender process I just don't think it achieves anything,” Tesoriero said. “It is good to have a positive relationship with people you are working with once you've won a tender, but it doesn't help you fulfill the actual tender criteria.”

Such criteria can vary dramatically between different levels of government. Federal tenders, on the one hand, are known for espousing the theoretical tenants of free trade, and referring to a level playing field between Australian and foreign suppliers. State tenders, on the other hand often call for contracts to feature local industry content, provide local employment and offer some kind of technology transfer to the area.

Although the extent to which this is a deciding factor in the overall process is questioned by Tesoriero.

“I don’t think the appendix referring to local content is opened until the winner is actually decided, unless it comes down to a very close contest,” Tesoriero said.

All state and Federal, and some local government, requests for tender are available online, and range from multimillion dollar ongoing contracts, to one-off small-scale installations. While government is traditionally technologically conservative, the tenders are increasingly open to a more diverse product base, and in some cases actively seeking open source and whitebox alternatives to the big name suppliers.

So whatever the size of your plate, the chances are there's a piece of the government pie that’s just right for your business.


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