The biggest talking point in the computer world in Australia right now is just who is going to land the $525m equivalent Australian Taxation Office information systems upgrade contract, which will be decided soon by the Commonwealth Department of Administrative Services. Last month both Computer Power Pty Ltd, Australia’s largest computer services company and the recent buyer the Control Data Institutes in Europe, and Fujitsu Ltd were short-listed for the 10-year tax office project. Computer Power is bidding an IBM-based system, while Fujitsu has gone in with its own hardware, contracting the software to Computer Sciences of Australia Pty Ltd. Despite considerable growth based on acquisitions over the past few years – such as that of Today generator developer BBJ Computers International Pty last year, Computer Power reported a half-year loss of $12.8m, attributed mainly to a non-cash write-down of $14.6m for information services provider Info-One International, a company it reversed into to gain a listing for its shares on the Sydney Stock Exchange. The day after, Computer Power Group chairman Roger Allen wrote a personal letter to several government ministers warning that Australia could kiss goodbye to a native information technology industry in services, software and systems integration if the contract went to Fujitsu. He claimed that Fujitsu might sell its own products to the Tax Office in preference to suitable Australian products, and that the client might be exposed to subtle and not-so-subtle pressure not to buy from Australian suppliers. The letter leaves the government in a potentially embarrassing situation where it faces either charges of protectionism if it bows to Computer Power, or criticism for selling out Australian interests if Fujitsu wins the bid. With a recession looming and interest rates of 18% to 20% making institutional venture capital investment in development-stage high technology companies unattractive, and forcing the demise of many software companies in Australia, the outcome of the Tax Office bid will be watched closely. Fujitsu got a big start in government business in Australia in 1978 when it successfully defeated most of the world’s other mainframers for the huge Australian Bureau of Statistics contract, and has since won other large projects such as the Commonwealth Employment Service nationwide network. Computer Power has also had substantial experience of major government projects, notably the Commonwealth Legal Information Retrieval Service database, ironically developed on Fujitsu hardware.
