Canadian technology companies are up in arms against the federal government after it awarded a CAD$500 million (US$390 million) contract to US IT behemoth IBM without any competitive bids.
“This is yet another example of how the government’s procurement process favors large, multinational companies and doesn’t give highly qualified companies even a fair shot to bid for these projects,” reported CBC News, citing Benjamin Bergen, Executive Director of the Council of Canadian Innovators.
The contract is reportedly related to providing hardware and software services to a few federal departments.
Domestic companies are accusing the government of unethically favoring large American companies and ignoring local providers, particularly small and medium enterprises.
However, some analysts counter, saying that only IBM can handle such jobs, as Canadian companies don’t own the license to supply the same proprietary hardware and software.
The deal includes CAD$289 million in optional additional spending, putting the potential total cost of the contract at almost CAD$790 million. It may be the largest non-competitive contract in federal procurement history, according to Canadian media.
IBM seems to be their main target, as even a study commissioned by the Chief Information officer last summer concluded that IBM Canada is Ottawa’s top vendor, with contracts valued at CAD$3.1 billion in the 2016-2017 fiscal year.