006/05 21 February 2005

SME participation in Government ICT contracts higher than average

Small to Medium Enterprises (SMEs) are winning a growing proportion of Government ICT contracts according to a report released today by the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan.

The report on SME involvement in Australian Government ICT analyses SME participation levels in the Australian Government ICT procurement market for 2001-02 and 2002-03.

Eleven Government agencies representing about 80 per cent of annual Government ICT procurement were surveyed for the report.

In 2001-02, 28 per cent or $526 million of ICT procurement were gazetted to SMEs, while 30 per cent or $556 million were gazetted to SMEs in 2002-03. For the same period, Telstra's share of the Australian Government ICT procurement market was 5 per cent or $98 million and 9 per cent or $173 million respectively.

This figure is higher than the total SME participation levels of 25 per cent across all Government contracts, according to Department of Finance and Administration figures from 2001-02.

Total expenditure on ICT across the 11 agencies was $1.9 billion in both 2001-02 and 2002-03.

These results do not include SME participation in contracts in which the major contractor was not an SME (such as subcontracting work). SME participation is also likely to be higher in the smaller contracts not measured in this report.

"The core principle underpinning Australian Government procurement is value for money," Senator Coonan said.

"The Government does not believe it is in the Australian ICT industry's long term interests to be given subsidies through preferential access to Government procurement.

"Nevertheless, the Government is facilitating SME access to its markets through a range of measures, including a guide to small companies on how to sell to Government and electronic tender notification systems.

"These latest results indicate SMEs are competing successfully for ICT business under this approach."

The report-SME Involvement in Australian Government ICT Contracts 2001-02 and 2002-03, and the study-SME share in Australian Government ICT Purchasing, can be found at www.dcita.gov.au.