Government digital procurement is still not fair — especially for smaller players

In theory, procurement processes have been evolving. Recent updates to the Commonwealth Procurement Rules set a target of awarding 20% of government contracts by value to small and medium enterprises (SMEs). But in practice, many agencies continue to rely on familiar, large suppliers — locking smaller, more agile firms out of the competition.

This isn’t just a Canberra gripe. It’s a national issue affecting innovation, local economies, and the government’s ability to deliver human-centred digital services.

As The Canberra Times and The Mandarin have reported, multiple government departments are falling short of meeting SME engagement targets, or worse, bypassing competitive procurement altogether. According to Senator David Pocock, this trend undermines local capability:

“We’ve got brilliant small businesses that win government innovation grants… and then are locked out of procurement for the very thing they’ve been funded to develop. It makes no sense.” — David Pocock, Independent ACT Senator

These issues aren’t new. The Australian National Audit Office (ANAO) has previously raised red flags about ICT procurement practices, including limited competition and off-panel purchasing within the Digital Transformation Agency (DTA). Even with updated procurement rules, enforcement and oversight remain weak.

Independent digital consultancies — particularly those based in Canberra and other regional centres — offer something different from the Big Four and multinational contractors:

• Human-centred strategy and design, often co-created with communities

• Faster, leaner delivery cycles tailored to project goals

• Creative content and UX grounded in local needs

• Deep commitment to public value and long-term trust

They’re also more likely to stick around. Many small firms have worked long-term with departments, building institutional knowledge and trust over years. And yet, they often struggle to even get on shortlists.

“The best innovation often comes from smaller players who bring fresh thinking and a deep commitment to solving real problems. Government needs to harness that.” — Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Procurement Inquiry Report, 2024

Senator Pocock has become a key advocate for procurement reform. He’s hosted roundtables with small business owners and worked with Finance Minister Katy Gallagher to advance more inclusive policies. Highlights include:

• A clearer definition of "Australian business" to prevent loopholes

• A Senate inquiry into sovereign tech capability

• Calls for transparent reporting by department

“Public money should deliver public good — and that includes building Australian capability and keeping value in the local economy.” — David Pocock

Learn more

• Pocock on procurement reform

• InnovationAus on building local industry

At Hide and Seek Digital, we’re one of many small, independent firms ready to deliver smart, human-centred digital work to government clients.

We specialise in:

• Digital strategy that starts with user needs

• Brand and communications

• Creative UX and content

• Agile delivery with less red tape

As a Canberra-based team, we understand government environments — and bring fresh thinking, flexibility and local insight.

If you're a departmental lead or procurement manager looking for a capable, human-centred partner, we'd love to talk.

Want to talk to us about smarter digital partnerships? Contact us here.