Controversy has erupted over the Federal Government's decision to award a mammoth IT outsourcing contract to Advantra, owned by IBM, Telstra and Lend Lease, for a tender that was initially focused upon small and medium business.
Jonathan Sheiman, general manager of Australian PC supplier Ipex, is concerned at the disparity between the initial suggestion of John Fahey, the Minister for Finance and Administration, that this initiative was to maximise the involvement of SMEs in government outsourcing and the fact that Advantra won the contract.
"Our feeling on the issue is that the outsourcing deal was initially intended for an SME yet in the end they gave it to Advantra which has the backing of a multinational company and is willing and able to lose money to get into government business. We are not in the business of losing money," stresses Sheiman.
Spending a considerable amount of time and money on the project, Sheiman was confident of Ipex's success under the Government's criteria of attracting SMEs into the Government space. However, when the security of this restriction was removed, Ipex had little chance of victory.
"It was an open, fair and equitable tender process and the Government really did try and put together something for the SMEs but in the end they can't stop people from discounting to such a degree and they made their choice based on price," claims Sheiman.
A spokesman from Fahey's office justified the decision as one made for taxpayers' benefit. "When you are looking at value for money there is no denying that larger companies have an advantage. And as much as we would have liked to give this group-five contract to a small or medium-sized business we can't just disregard value for money."
The spokesman also attempted to downplay the decision by assuring competitors that "Advantra is only 30 per cent owned by IBM. Telstra and Lend Lease own the remaining 70 per cent so in terms of ownership it is a mums and dads type deal. And indirectly Advantra is forming strategic alliances with SMEs."
Sheiman intends to approach future business with a mixture of cynicism and optimism. "We have discussed the issue with the Government and I am relatively sure we will be bidding again in the future. We know a lot more about the rules of the game and if we decide to play we will play the way everyone else does."
Fahey's spokesman also offers some consolation to the unsuccessful SMEs. "We don't blindly look at price when deciding an outsourcing contract, we look at the proposal as a whole. In some projects medium enterprises do well and in others not so well."
Advantra is responsible for the provision of IT services, infrastructure and maintenance for the "group of five" Government agencies.
These are: the Australian Competition and Consumer Commission; the Department of Communications, Information technology and the Arts; the Department of Industry, Science and Resources; the Department of the Prime Minister and Cabinet; and the Department of Transport and Regional Services.
The contract also includes the roll-out of 4000 PCs, most to be supplied by Bluegum Technology, a Wangaratta reseller and Advantra partner. Wizard Information Services, also a partner in the deal, will provide applications developments and maintenance services to the group of five.