Reforms to IT procurement inject $650mill into small businesses

Release Date: 
23 August 2017
Media release

The Commonwealth is announcing significant reforms to the way businesses can sell IT services to Government.

From today, Government IT contracts will be capped at a maximum value of $100 million or three years’ duration. This is to allow small and medium sized businesses the opportunity to bid for smaller components of larger projects.

Addressing an industry briefing in Canberra, Assistant Minister for Digital Transformation Angus Taylor said the Government was aiming to inject an additional $650 million annually into small Australian tech companies.

“Government is targeting an increase of 10% of its annual $6.5 billion IT spend to smaller operators,” Assistant Minister Taylor said.

“These are exciting changes that will throw open the door for SMEs and allow government agencies to bring in new and innovative services,” Assistant Minister Taylor said.

“A cap is now in place to limit the term and value of government IT contracts. We are reducing the number of IT panels to make it easier for small players to supply services. We are actively encouraging small innovators to sell us their ideas.”

Assistant Minister Taylor said the reforms were recommendations from the ICT Procurement Taskforce report.

“The Taskforce found a culture of risk aversion in government procurement had undermined the freedom to innovate and experiment. If we are to reward the entrepreneurial spirit, a new procurement culture is necessary.”

The 10 recommendations from the Taskforce cover issues as diverse as developing ICT-specific procurement principles, building strategic partnerships, data-driven reporting, enhancing the Australian Public Service’s procurement skills, and new procurement methods.

“I thank participants engaged in the public submission process and in roundtables, and congratulate team members who have compiled the final report, now published on the ICT Procurement Taskforce website.”

Work will continue over the next 12 months to deliver more pathways to improve coordination and reduce duplication of ICT procurement across government.

The DTA’s increased oversight of the government’s IT investment portfolio and its work to build digital capability will address the calls for a more strategic IT procurement approach and a stronger technical workforce.

The ICT procurement taskforce was established within the Department of the Prime Minister and Cabinet in October 2016 and became the responsibility of the Digital Transformation Agency in February 2017.