[LINK] Survey shows Gov incompetence resulted in inflated industry costs
Thu, 18 Jan 2001 09:46:26 +1100
According to Verona Burgess in today's Canberra Times (not available
electronically) Minister Fahey's office put pressure on the IEAust to
broaden the terminology from outsourcing to contracting. IEAust
changed their press statement (by adding the single word -
contracting) but refused to modify the survey report.
BTW, the URL in Lundy's press statement is incorrect, it should be
Also BTW, I remember receiving a form for this survey, but it said
that it was a joint initiative by the ACS and IEAust. The report does
not refer to the ACS. I don't suppose that this has got anything to do
with the ACS' cosy arrangement with Patron Senator Alston?
It almost looks as though the Partonising of Alston has emasculated
Senator Kate Lundy
17 January 2001 - Media Release
Survey shows Government incompetence resulted in inflated industry
"Minister Fahey's pitiful defence of his IT Outsourcing program has
been further undermined by an independent survey exposing how industry
inflated their prices to compensate for the increased risks of doing
business with an incompetent government," Senator Lundy, Shadow
Minister assisting on Information Technology, said today.
According to an Australian Institution of Engineers survey on
government contracting practices released today, 32% of IT industry
professionals rate government 'below average' as an informed buyer of
The survey also found that governments are not necessarily 'smart'
buyers of information and that there is a considerable cost associated
with their inadequacy. Governments who are 'uninformed' buyers of
information technology put at risk the capacity to:
* Prevent unscrupulous outsourcing contractors from taking
advantage of a buyer's lack of knowledge,
* Select and justify contracts that offer best value for
* Reduce the risk to outsourcing contractors by offering
relevant technical details in tender documents.
In a disturbing revelation, the survey also found that 42% of industry
would inflate their price to 'hedge' the risk if they thought they
were dealing with an uniformed buyer. This 'hedge' could be between 5%
and 50% of the contract value.
"This survey indicates that Government departments and agencies may
have being paying too much for their IT as a direct result of the
bungling by the Office of Asset Sales and Information Technology
"OASITO, under John Fahey's direction, negotiated the contracts
between the outsourcing vendors and government agencies. This makes a
mockery of Mr Fahey's attempt to protect the US firm Shaw Pittman, who
were paid $17 million for 'advice' to OASITO. "Just how much Shaw
Pittman's advice and OASITO's mismanagement of these contracts has
cost taxpayers will probably never know," Senator Lundy said.
Quantifying the cost and frequency of inadequate information
technology contracting practices by government, a survey by the
Institution of Engineers is available at:
12/01. Media contact: Simon Tatz on 02 6277 3334 or 0418 488295
I've said it a million times: Don't exaggerate!