Is the Australian government agile and innovative? Not to those in the start-ups world

Risk-averse and technology-backwards bureaucrats are hampering the push for agile and innovative Australian government, high-tech start-up firms say.

Emerging firms say government contracts remain sown up by multinational "dinosaurs" like IBM, SAP and Accenture, despite high-profile stuff-ups, because they are masters of the federal government's painfully bureaucratic tender process.

Public servants who don't know what technological solutions are available are another inhibitor of Prime Minister Malcolm Turnbull's innovation drive, with too few bureaucrats willing to explore or experiment.

But there is hope, with one digital marketing firm saying the reboot of the Digital Transformation Office – now the Digital Transformation Agency – was taking government tech in the right direction.

Sydney start-up URGE offers a Yellow Pages-style directory of businesses that can communicate with their customers via text or live webchat.

Chief executive and co-founder Doron Ostrin says URGE, or technology like it, could make the difference to Centrelink's dismal customer service performance.

But he says the firm hits a brick wall when it tries to show the Commonwealth what it can do.

"We just get passed around, it's like nobody really has the final say," Mr Ostrin said.

"On the back of one of the last Centrelink articles, when they were saying that they wanted to find new ways of letting their customers talk to them, we did reach out to them, but we haven't heard anything back."

Mr Ostrin said bureaucrats believed the low-risk option was hiring established giants like IBM, Accenture or SAP, even if the multinationals had a track record of involvement in high-profile tech-wrecks like the recent census debacle.

"But in the tech-world, hiring the biggest builder doesn't get you the best house," Mr Ostrin said.

"You don't see enough experiments or trials happening because they [departments] are too nervous of going to the public with anything that isn't perfect."

Mike Pritchett, managing director of video production start-up Shootsta, is another tech executive frustrated by the Commonwealth tendering maze.

"Nine times out of 10, the government tenders are very convoluted and there have been some more recently where they have been getting a little better," Mr Pritchett said.

"But we've had one where there was a 30-page document and one page explaining what they wanted.

"The rest was just garbage, the standard, over-bloated contract."

Mr Pritchett said that out of Shootsta's 37 clients, including big names like Qantas, Toyota and Kiwi Bank, the Health Department was the only government agency to use the subscriptions video service.

A public servant from the department saw Shootsta exhibiting at technology conference AdTech in Sydney, leading to a deal between the department and the start-up.

"That's somebody doing things the right way, they've come to AdTech, they've seen what we can do for them and got us on board," Mr Pritchett said.

Andrew Vidler, managing director of government practice with marketing outfit Gruden, says there is hope for emerging star-ups to crack the government market,

"Things are changing, with the Digital Transformation Agency and their objectives, access is changing through their digital marketplace.

"But that's a closed panel now, so my advice would be to partner, either with an existing agency, an existing vendor or with other start-ups.

"There is a misunderstanding that small business is not welcome, but more than 60 per cent of contracts across government are already awarded to small or medium enterprises.

"I'm seeing pockets emerge across the spectrum of a more mature and less bureaucratic approach to tendering while some other agencies have still got some work to do."