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  • CATA Successfully Opens Federal Contracts to SME’s

4th May 2009

CATA Successfully Opens Federal Contracts to SME’s

CATAOttawa – Reversing a stealthily creeping trend, the Canadian Advanced Technology Alliance (CATA) has successfully led a charge against the government’s tendency to “bundle” all work into big contracts. Big contracts are simply too complex for small firms to bid on, said a CATA spokesperson.

“Our members tell us that they are giving up on bidding for government contracts,” said John Reid, President of CATAAlliance. “We are arguing that “bundling” the work in one big contract makes sense for the provision of large networks, but the bundling of all services would cut SMEs out. We have been lobbying MPs to “unbundle” or separate out the professional services. They have understood.”

Other advocacy groups have argued the government will pay more with such an unbundled approach. CATA has countered that cost-saving innovation is often found in the smaller and entrepreneurial companies.

CATA has further pointed out that the debate has been far too polarized, and instead adopted a balanced approach that creates a win for small companies, a win for large companies and a win for Canada as the Innovation Nation.

“Canada’s Innovation Nation will be built on creating vibrant SME’s working closely with large enterprises to add value to the economy. Working together we can move the Nation from 14th to 1st place in innovation performance. Furthermore, government has a public policy obligation to nurture Canadian-grown business,” said Mr. Reid.

He added, “We have pushed for the government to use its procurement policies to promote Canadian firms, giving them experience so they can tap into global supply chains of larger companies. CATA is also leading efforts to help set the investment conditions for large enterprises in areas such as SR&ED tax credits to encourage their expanded Canadian mandates.

One of the findings of a recent CATA Survey was that companies find that the federal procurement is long, complicated and eats up too much money and time, particularly for a small company. The Canadian Federation of Independent Businesses (CFIB) echoed these findings in a recent Survey of its members.

CATA has long argued that the government should work harder to buy Canadian, so that it can support innovation through procurement practices that spark small firms and give SME’s an even playing field.

Last year, Public Works bought $4.8 billion in goods and services from SMEs and they nabbed 49 per cent of the dollar value of the contracts that went to Canadian firms.

CATA’s announcement came on the heels of a decision by the Board of Directors at Ottawa-based Liquid Computing not to get drawn into a bidding process with Public Works because such an action “sucks up” enormous time and energy that “never goes anywhere,” said Pat DiPietro, managing partner at VG Partners’ technology fund, which is the major investor in Liquid. Liquid Computing makes the world’s fastest computers and has a unique offering — despite which, the federal procurement agency wanted to go to tender for bids.

CATA’s CIO, Charles Duffett told MPs that Liquid’s computer, “arguably the fastest in the world,” has no real competition, but rules wouldn’t allow Public Works to buy it as a “trial” without a full-blown procurement. Duffett argued the government should be an incubator, buying and trying new products. Having government as a client is a critical endorsement for a company breaking into foreign markets.

“By promoting the de-bundling of bids, we are making the growth environment right for SME’s,” argued Mr. Duffett. “Having government as a client is a critical endorsement for a company breaking into foreign markets”.

The Canadian Advanced Technology Alliance recently presented the Liquid story to MPs on the government operations committee, which is studying the effect of federal procurement policies on small business.

CATA’s Duffett told MPs that Liquid’s computer, “arguably the fastest in the world,” has no real competition, but rules wouldn’t allow Public Works to buy it as a “trial” without a full-blown procurement.

Duffett argued the government should be an incubator, buying and trying new products. Having government as a client is a critical endorsement for a company breaking into foreign markets.

Like other groups, CATA rejected some MPs’ proposals for “set-asides,” which would guarantee small businesses a slice of large federal contracts.

“What I would like is a policy that encourages Canadian technology and that includes promoting synergies between small and large companies. We must stop the polarization of the debate. I see Canadian technology as a huge wealth creator. If you can get that machine running and keep it running, it creates a lot wealth in Canada,” Duffett said.

This entry was posted on Monday, May 4th, 2009 at 11:04 am and is filed under Business News, National News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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