Yesterday, the Australian Financial Review reported that according to AusTender watchdog’s content-tracking system, the overwhelming majority of contract work – $900 million of $1.1 billion spent between 2013 and 2018 – went to just a handful of firms.
“Eleven firms won 80 per cent of recruitment contracts entered into in the financial years 2013-2018, worth about $900 million of the $1.1 billion spent. Just four firms won 80 per cent, or $785 million, of the $824 million in outsourced labour contracts”, they said.
This is troubling. Recently, I have been investigating the inner workings of AusTender, the Australian Federal Government Tender system, to find out why it’s so hard for small businesses to apply for and win government tenders.
I thought that being a university-educated woman with a knack for translating complex jargon into plain English, it would be easy for me to identify what they need and how to apply.
So, a few months ago I signed myself up to AusTender to see whether the government is actively gatekeeping financial support in this country, and if they are, how they’re doing it.
The AusTender System
If you’re looking to work with the government in Australia, there is a process to follow. The Federal Government does not simply ‘hire’ consultants and agencies but provides ‘tenders’ through the AusTender system.
In case you’re not sure what a tender is, it’s basically a project that Australian businesses can “bid” for. These tenders outline the business opportunity available and give you a chance to apply. In essence, these projects are where much of our taxpayer money is being spent.
Australian businesses can use their ABN to register on AusTender, and subscribe to notifications about the available tenders.
As a copywriting and digital marketing consultant, I signed up to register my interest in all projects across all states.
Why the AusTender System is problematic
After signing up, I can see three main reasons why the system doesn’t work for small business:
- You need a degree to understand what they’re asking for
- The tenders are most often for “management” and “auditing” services
- The focus is giving large sums of money to a select few multi-disciplinary advisory firms. When instead, they could provide much smaller sums to a larger number of organisations.
When I receive one of these emails, I usually have the same blank look on my face. I try to decipher the jargon and understand what the government is asking for, but it’s a frustrating process.
The emails come with boring, bureaucratic information; the ATM (Approach to Market) ID, the Agency, the Category, and a “short” description.
Essentially, unless you are a large corporation who is well versed in the tender process, you have no chance of succeeding in your application.
A problematic tender example
Let’s look at a recent tender I received for controlling the Red Legged Earth Mite (RLEM) in grain crops.
Translating the not so ‘short description’
After a solid ten minutes of “translating” the government jargon, I was able to discover the following:
- The development of new chemical pesticides (to solve a problem caused by insecticides in the first place)
- The opportunity to introduce “mites and predators” (which, considering the “success” of the cane toad, seems a silly idea)
- The development of forecasting tools to either:
- Increase grower confidence. A.K.A convincing farmers that “she’ll be right” instead of finding genuine solutions – like diversifying crops.
- Discourage the use of further applications of cheap pesticides to try and prevent further outbreaks. Whilst this works in theory, creating new pesticides to solve issues of old pesticides won’t deter the use of pesticides. In fact, would it not be smarter to focus on ways to fix the issues without pesticides?
- Facilitate pro-active control practices. To be honest, this one just seems ridiculous. When you look up what pro-active control practices are, you’ll find they involve the use of pesticides…
The above suggestions (apart from being unsustainable) cannot be carried out by small businesses. Only large, multi-disciplinary organisations, often foreign owned, have the ability.
The rich get rich, and the poor get poorer.
So how do we make tenders accessible to small business?
One tender opportunity on Austender would likely only receive a few applications from corporations charging millions of dollars. However, if one large tender was split into 100 smaller ones, there would be a greater opportunity for the little guy.
If tender applications were easier to understand, it would even the playing field. Visual aids and simpler language could also connect minority groups to the tender process, including local indigenous and immigrant communities.
The problem outlined in the tender description is also the concern of over 50 properties, covering over 1000km in WA.
Offering large projects for tender encourages corporations (usually foreign owned) to pitch and offer their ‘management and advisory’ services. When this happens, taxpayer money is spent on devising strategy.
If tenders instead asked for action over strategy, and offered smaller amounts, the government could be encouraging small business innovation. Business owners earning under $200k a year know how to be frugal and clever with their money. These are the businesses we should be enabling with the funds to take action. Smaller businesses use technology to reduce cost, and apply cheaper, local solutions to solve problems, and will be able to generate a higher ROI if given the opportunity.
Austender should offer small amounts, track the return on investment in short-term intervals, and then determine whether to invest further.
But instead, the government supports large corporations (many of which provide political donations) and leaves small businesses out to dry.