Ministers non-committal on local procurement question
LATEST NEWS
SUBSCRIBE
Computerworld is New Zealand's only specialised information systems fortnightly. Subscribe now for $100 (23 issues) and save more than 37% off the cover price!
SIGN UP
ICT Minister Amy Adams and Internal Affairs Minister Chris Tremain queried on lack of preference for local suppliers
By Stephen Bell | Wellington | Wednesday, 15 August, 2012 | 6 Comments
ICT Minister Amy Adams and her staff have declined to defend her own remarks to an Institute of IT Professionals breakfast last month, indicating a lack of preference for local suppliers in awarding government contracts “other things being equal”.
Adams’s press secretary, Nathan Beaumont, advised that Computerworld’s questions should be forwarded to Internal Affairs Minister Chris Tremain, as he is ultimately responsible for government procurement policy.
Questions were put to Adams and then subsequently redirected to Tremain. “What reasons could there be, other factors being equal, that preference would not be extended to the local company?” Computerworld asked.
“Are [Adams] and Cabinet ruling out any kind of policy of preference for a local supplier in the face of parity in other factors — especially in view of the increasingly all-of-government perspective on ICT planning?”
Spokeswoman Mary-Jane Rendle’s reply on behalf of Tremain, is as follows: “We need all types of companies to be able to trade and thrive in NZ. Small-to-medium sized NZ-owned enterprises are critical, but so are large, multinationals who can offer economies of scale and global experience.
“Government is conscious of the needs and concerns of NZ-owned businesses, and therefore, in addition to the functions of New Zealand Trade and Enterprise, also offers initiatives like ‘Meet the Buyer’ and ‘Open Door to Innovation’.”
Comments
What Preference?
Lack of preference is still not no preference. A locally based company will have better support and acccess to those involved. If you were going to order a widget over the Internet, would you prefer to order one from a place 5 km away, or one on the other island? I'd prefer to order from the closer one, even if that's not a codified and explicit preference because being closer is easier if there's an issue of a return or other thing that requires I have further dealings.
As for not favoring the local guy, it was clear when the subsidies for Chorus and Vodafone were codified into UFB and RBI that the little guy will not get government money. The winning RBI bid offered to cover 85% of rural areas. The two proposals to cover 100% were rejected because the companies proposing them were too small. One of which is out of business now, partially because they made decisions to spend money to accommodate the RBI bid so that they could cover the 15% explicitly ignored under the Chorus/Vodafone RBI bid.
The government couldn't risk sending millions of dollars to people who didn't have sufficient existing relationships with them, as opposed to the smaller businesses actually capapble of delivering the desired 100% coverage.
Posted by Anonymous at 15:00:15 on August 16, 2012
As for not favoring the local guy, it was clear when the subsidies for Chorus and Vodafone were codified into UFB and RBI that the little guy will not get government money. The winning RBI bid offered to cover 85% of rural areas. The two proposals to cover 100% were rejected because the companies proposing them were too small. One of which is out of business now, partially because they made decisions to spend money to accommodate the RBI bid so that they could cover the 15% explicitly ignored under the Chorus/Vodafone RBI bid.
The government couldn't risk sending millions of dollars to people who didn't have sufficient existing relationships with them, as opposed to the smaller businesses actually capapble of delivering the desired 100% coverage.
Posted by Anonymous at 15:00:15 on August 16, 2012
Lack of preference is a GOOD thing - it should stimulate NZ innovation
So what Amy Adams said sounds quite sensible to me as
a) a taxpayer expecting/hoping that Government will spend our forced contribution wisely, and
b) as a business owner who sees the reality of competition as being that it is not just local - if I want to make it in NZ and grow to be on the world stage then I need to find a way to create value that my competitors don't.
Local preference procurement by Government to providers who can't compete on the price/service bundle is in reality just a subsidy for local providers from the Government. Sorry boys and girls, but Fortress New Zealand was mostly dismantled at least a generation ago and we live in a bigger rougher world. Its time to grow up a little.
What Amy Adams said about Government contracts was "all other things being equal, we want to give it to the Kiwi company. When all other things are equal often we will want to deal with the NZ company; but we do not [use] a rating system that gives preferential treatment to NZ companies - because as well as supporting the NZ sector, we have to be very careful about how we spend New Zealand's money." She clearly understood the question, but maybe is shying away from having to tell the unpleasant truth in case it damages popular opinion - politicians hate unpleasant truths!
Personally I don't have a problem with this reasoning - if I can't compete with non NZ companies in my business I take a long hard look at what I am doing and how I can change my market offering, improve my unique selling proposition, maybe even innovate. This is part of what is called mixed market capitalism and even if it isn't perfect, its a damn sight better than any of the alternatives our species seems to have tried in the last few thousand years. Of course I would like to be given a free ride, but I am not three years old anymore - this is not the way the world works.
Sorry Daniel Spector and your fellow travellers if you don't like to hear this, but it really is in your various companies long term interest NOT to be given a free ride on the taxpayer for the reasons I suggest. Personally I would rather see Government money spent on improving New Zealand's human capital through intervention with disadvantaged families, education than propping up businesses that don't think they can compete with offshore vendors.
Posted by Anonymous at 9:50:20 on August 16, 2012
a) a taxpayer expecting/hoping that Government will spend our forced contribution wisely, and
b) as a business owner who sees the reality of competition as being that it is not just local - if I want to make it in NZ and grow to be on the world stage then I need to find a way to create value that my competitors don't.
Local preference procurement by Government to providers who can't compete on the price/service bundle is in reality just a subsidy for local providers from the Government. Sorry boys and girls, but Fortress New Zealand was mostly dismantled at least a generation ago and we live in a bigger rougher world. Its time to grow up a little.
What Amy Adams said about Government contracts was "all other things being equal, we want to give it to the Kiwi company. When all other things are equal often we will want to deal with the NZ company; but we do not [use] a rating system that gives preferential treatment to NZ companies - because as well as supporting the NZ sector, we have to be very careful about how we spend New Zealand's money." She clearly understood the question, but maybe is shying away from having to tell the unpleasant truth in case it damages popular opinion - politicians hate unpleasant truths!
Personally I don't have a problem with this reasoning - if I can't compete with non NZ companies in my business I take a long hard look at what I am doing and how I can change my market offering, improve my unique selling proposition, maybe even innovate. This is part of what is called mixed market capitalism and even if it isn't perfect, its a damn sight better than any of the alternatives our species seems to have tried in the last few thousand years. Of course I would like to be given a free ride, but I am not three years old anymore - this is not the way the world works.
Sorry Daniel Spector and your fellow travellers if you don't like to hear this, but it really is in your various companies long term interest NOT to be given a free ride on the taxpayer for the reasons I suggest. Personally I would rather see Government money spent on improving New Zealand's human capital through intervention with disadvantaged families, education than propping up businesses that don't think they can compete with offshore vendors.
Posted by Anonymous at 9:50:20 on August 16, 2012
Lack of preference is a GOOD thing - it should stimulate NZ innovation
I think it a bit unfair and cowardly to anonymously attack Daniel Spector.
What NZRise is saying is that a lot of government procurement policy currently discriminates *against* NZ companies in a miraid of different ways. We are looking at how to stop that discrimination and make the process fairer. That's just common sense. If we want to have an export ready industry to ask that we ignore the government sector as a market is just nuts.
This is not about asking for special favours or protectionism, and every time I see that put up I know someone is building a straw man case. To be clear, we are not asking for protectionism or favouritism or the sort of trade agreement breaking activities every other country seems to indulge in...we are asking for some fairness and common sense.
Posted by DonChristie at 10:07:17 on August 16, 2012
What NZRise is saying is that a lot of government procurement policy currently discriminates *against* NZ companies in a miraid of different ways. We are looking at how to stop that discrimination and make the process fairer. That's just common sense. If we want to have an export ready industry to ask that we ignore the government sector as a market is just nuts.
This is not about asking for special favours or protectionism, and every time I see that put up I know someone is building a straw man case. To be clear, we are not asking for protectionism or favouritism or the sort of trade agreement breaking activities every other country seems to indulge in...we are asking for some fairness and common sense.
Posted by DonChristie at 10:07:17 on August 16, 2012
Lack of preference is a GOOD thing ... either way
@ Don Christie:
That is a very fair point you make. I am equally absolutely opposed to discrimination AGAINST NZ companies for exactly the same reasons. It becomes in effect an undisclosed industry levy or non-cash parafiscal tax.
If it genuinely is the case that Government procurement policy is discriminatory against New Zealand companies then it is completely inappropriate since it is . I think you are correct to call me on only putting one side of the position in my comment. I would like to say that I am championing procurement rules which are, as a matter of fact rather than opinion, not biased for or against any party.
While somewhat surprised by your assumptions, I can assure you that I am not building a straw man case for anything, just reflecting a personal view on equitable treatment in procurement. (I am not sure how you think that you "know" that - a straw man is under construction - if you could refrain from ad hominem argument it might be a better discussion.) To be crystal clear I am not attacking anyone, including Daniel Spector or indeed yourself. I am also not involved directly in this industry other than as an inconsequential customer.
Posted by Anonymous at 10:43:45 on August 16, 2012
That is a very fair point you make. I am equally absolutely opposed to discrimination AGAINST NZ companies for exactly the same reasons. It becomes in effect an undisclosed industry levy or non-cash parafiscal tax.
If it genuinely is the case that Government procurement policy is discriminatory against New Zealand companies then it is completely inappropriate since it is . I think you are correct to call me on only putting one side of the position in my comment. I would like to say that I am championing procurement rules which are, as a matter of fact rather than opinion, not biased for or against any party.
While somewhat surprised by your assumptions, I can assure you that I am not building a straw man case for anything, just reflecting a personal view on equitable treatment in procurement. (I am not sure how you think that you "know" that - a straw man is under construction - if you could refrain from ad hominem argument it might be a better discussion.) To be crystal clear I am not attacking anyone, including Daniel Spector or indeed yourself. I am also not involved directly in this industry other than as an inconsequential customer.
Posted by Anonymous at 10:43:45 on August 16, 2012
Poor Amy
She probably didn't understand the question.
Posted by Anonymous at 16:11:30 on August 15, 2012
Posted by Anonymous at 16:11:30 on August 15, 2012
Yeah right
Lets waste the time of NZ small business by letting them 'Meet the Buyer' with no hope of selling unless they are a large conglomerate on a panel contract. It would be fairer to set expectations early on, but that's not the nature of politics.
Posted by Anonymous at 10:14:02 on August 15, 2012
Posted by Anonymous at 10:14:02 on August 15, 2012
MOST POPULAR
Social Media @Computerworld NZ
Computerworld NZ has now reached LinkedIn! Join to expand your networks and meet others interested in information systems.
