Government doesn’t buy enough IT from small firms

10 Sep 2003

The Irish Software Association (ISA) has said that it is easier for small to medium-sized Irish software companies to sell products and services to the Belgian, UK and US governments than it is to sell to the Irish Government. Over the coming months, ISA chief executive Cathal Friel said the IBEC-affiliated lobby group will be calling on Mary Harney TD to ensure that at least 7-10pc of every future government IT project will go to a local firm.

At a briefing today in Dublin, the ISA, which is celebrating its 25th year in existence, attacked the lack of local spending on IT by the Irish Government. “The Government seems happy to award contracts to big five consulting players such as Accenture, EDS and IBM but local small software companies don’t often get a look-in. It is actually easier for Irish software firms to sell software to the Belgian, UK and US governments than it is to sell to our own,” Friel said.

Friel referred to the mandatory policy of the US Government that 23pc of all contracts are spent with SMEs.

“We will be making a lot of noise about this contentious issue over the next few months and will be calling on Mary Harney as Tanaiste and Minister for Enterprise and Employment to examine the situation closely.

“We are going to call on the Tanaiste to rule that 7-10pc of Irish government contracts are guaranteed to be spent with SMEs,” Friel said.

Earlier this week, a more energised ISA responded to rumours that Finance Minister Charlie McCreevy is considering scrapping the business expansion scheme (BES), which more than half of small software firms in Ireland depend upon for ongoing financing.

Friel said that early-stage software companies were more dependent than ever on BES funding because other sources of funding, such as venture capital, had dried up. He said that the next generation of Irish software companies “could be strangled at birth” unless McCreevy acts by extending BES.

The ISA also called on the minister to increase the BES limits to €2m from its current €750k cap and make the Seed Capital Scheme (SCS) more accessible to industry by extending that scheme in the forthcoming Budget.

By John Kennedy