The experience of the COVID-19 pandemic should push the government towards better leveraging its ICT procurement to promote “sovereign resilience”, says AUCloud managing director Phil Dawson. However, Dawson said that transparency and the cost to bid remain barriers for many local tech companies.
Dawson said he applauded the direction the Digital Transformation Agency is heading in with its planned Cloud Marketplace, but, drawing on his past as a co-founder and CEO of UKCloud, he believes that more transparency around procurement is possible.
The AUCloud MD told CommsDay: “In the UK — which has backtracked significantly through Brexit and COVID — the ability for us to create what became the fastest growing tech company and the leading provider to government was driven by the fact that government made the whole input side transparent to everybody: What services are you selling and at what prices. And that wasn’t just to government buyers, it was to your competitors as well.”
“They took away many of the frictions for a scaleup or an SME or even a startup to bid to government,” Dawson added. “You don’t have to keep repeating yourself by providing the same generic information to every single panel that you want to go on and all that kind of stuff.”
He also said that government shouldn’t overvalue scale when it comes to assessing risks, noting Virgin Australia’s recent bankruptcy. “There’s a sort of perceived safety in size from government buyers, that’s actually misplaced,” he said.
Dawson told CommsDay that he believes more Australian technology companies choose not to bid for government business than do.
The government’s view is that enough people respond to tenders, Dawson said, adding: “You’ve got to ask why those companies choose not to do that, because government’s a great source of revenue for them. So there’s something in the mix around — we don’t think it’s transparent, we think it’s too costly to do so, and ultimately the cost to fail, the cost of rebidding is just too much, and it takes too long to build up the reputation.Those things cause, explicitly or otherwise, CEOs not to bid.”
The AUCloud head said that “there is a sense in government that procurement is largely driven by probity and that probity is delivered by process”. “I would argue it’s not,” he said. “The UK got itself into position through that thinking in 2010 where 82% of its IT spend went to eight companies, and 92% of its federal government spend went to 20 companies. So that’s where the process gets – bids become bigger and bigger, fewer people can play. But the process is all achieved.
“Actually what gets you probity is transparency. If you can see what everybody is selling — go back to economics 101 and look at what a competitive marketplace looks like. It’s about transparent information. So I think on the input side, you need more transparency. And on the output side, you need more transparency: Who’s winning contracts with whom.”