E-Business
Issue No. 28 - April/May 2006
Buy local for eggs, but what about IT?
by Ms Leila Henderson
For more than two years, dozens of local companies have been devoting time, energy and money to trying to win a chunk of $1 billion worth of State Government ICT tenders.
These were the same companies that were buoyed by the announcement in October 2003 that the nine-year whole-of-government outsourcing deal with EDS would be carved up into more than a dozen individual contracts.
The real and opportunity costs for each company pursuing these tenders amounts to hundreds of thousands of dollars — a painful burden for the State’s typically small to medium size ICT businesses.
Sadly, almost all of that investment has gone to waste. Applicants for the FutureICT tenders were and are bound by non-disclosure agreements, but at the time of going to print, there have been several undisputed press articles announcing that not a single South Australian company* will supply any of the services previously provided by the Texas IT giant.
Meanwhile, local companies like Integrity Data Systems and Foursticks have been pushed to the wall. (Integrity was purchased by TR Corporation; Foursticks by NetPriva.)
If the figures I’ve been quoted are correct, long delays in the decision making process may have cost the government itself millions of dollars that could be better spent supporting the local ICT industry, in my humble opinion.
The ISP contract is a case in point. Based on the data rates available when the Government signed its existing contract, the State is now paying around six times more than it needs to for internet services, because data rates have tumbled in the past year.
Broadband is now available at around 1 cent a MB, compared to around 6-10 cents a MB over 18 months ago, when the internet services tender was published. With the Government using about 3 terabytes (3000 GB) a month, well, you do the math. Ok, I’ll do it for you — the State appears to be paying $150,000 a month more than necessary. <...
