A perceived preference for multinationals is costing Canberra firms lucrative government contracts, as a Senate inquiry raises concerns about the Australian Public Service's ability to acquire sovereign Australian technology.
The findings come as the government ramps up its efforts to stimulate local high-tech manufacturing with the Future Made in Australia bills introduced to parliament on Wednesday, July 3.
The report, tabled in June, followed a six month inquiry into public sector procurement in the Australian tech sector.
Chaired by senator Richard Colbeck, the committee found there were shortcomings in the public service's ability to acquire technology.
"The committee is concerned about the APS's lack of expertise and capability when it comes to the procurement of tech, and procurement capability generally," it said.
While these issues were not new, the report noted there were particular concerns when it came to the understanding of sovereignty in technology, a key plank of government policies such as the Buy Australia Plan and the Future Made in Australia policy.
"Additionally, over the course of the inquiry the committee received a range of views on the definition of sovereignty and sovereign capability," the report noted.
"Though widely used as buzzwords, it is apparent that these terms are not well understood or consistently applied."
The committee heard there was no one definition of sovereignty across the public sector and that companies could be considered Australian if they had an Australian ABN, even if they were foreign-owned or had the bulk of their operations overseas.
ACT senator David Pocock said this created an uneven playing field for local businesses.
"A number of Australian owned and operating tech SMEs submitted their frustration with these arrangements, arguing that it distorted the playing field in favour of foreign suppliers dominating government procurement opportunities in Australia," he said.
One of those businesses is Canberra tech firm Trellis Data, which told the committee in May that it had a tender cancelled after the Prime Minister announced an APS-wide pilot with Microsoft's AI tools.
"We certainly felt the impact of that immediately," Trellis Data chief executive Michael Gately told the committee in May.
"We had a tender with an Australian government department that was ready for signing by the delegate which got cancelled the day after that announcement was made."
Launching the government's Future Made in Australia policy in April, Prime Minister Anthony Albanese stated the policy would involve "building sovereign capability in areas of national interest".
The government has also made revisions to the Commonwealth Procurement Rules, to lower the threshold from $4 million for officials to consider the economic benefit of the procurement to the Australian economy to $1 million.
