Not on the Panel
Unpacking what works when building in ███ ██████, GovTech, and the █████████ market.
👋 Welcome
Welcome to Not on the Panel, your unofficial guide to building and scaling in government.
Each week, we track activity in Australia's $80B business-to-government market and report on contract spending and the actual mechanics of selling into the public sector.
Australia's $80B business-to-government market is one of the country's most stable and overlooked revenue streams. Sadly, many founders and investors are not even aware it exists. Not on the Panel tracks weekly contract reporting, highlights who is winning deals, and explains how we think startups and investors can break in.
📰 This Week in Gov
VMware wins its largest Australian Government contract.
The Australian Taxation Office(ATO) has awarded VMware a massive $108.63m contract covering infrastructure software and CA mainframe tools. The deal runs through 2028, making it VMware’s largest federal engagement on record.
The three-year agreement commencing 3 March 2025 was awarded under Limited Tender Exemption 10.3(e), which allows additional deliveries from the original supplier when compatibility with existing systems is essential.
Since 2009, VMware and its related entities have secured $310.15m in Commonwealth contracts. Of that, $108.63m comes from this new ATO contract and $98.23m from a Services Australia deal in July 2024. Together, these two contracts total $206.86m, meaning nearly two-thirds of VMware’s federal revenue has been awarded in just the past two years. Neither was won through a competitive tender; instead, both procurements were sourced under exemption 10.3(e).
The ATO has only engaged VMware directly once before — a $3.432m deal in 2016. While the sudden jump to a $108.63m deal signals a significant shift, it also aligns with the agency’s long history of limited competition in infrastructure deals.
Since 2007, the ATO has signed 27 contracts for mainframe-related services worth $338.27m across approximately 11 providers. Of that total, $307.93m was awarded via limited tender, with just $30.32m going through open tender.
💼 This Week in B2G
Week 15 (ending 11 April)
📄 $613.43M in total reported contract spend
🖥️ $128.76M in software + digital services
Breakdown by Service:
💾 Software: $123.24m
☁️ SaaS (Cloud): $458k
🛠️ Software maintenance & support: $1.76m
🧱 Platform SaaS: $0
⚙️ Software/hardware engineering: $3.28m
Breakdown by Procurement Method
📢 Open Tender — $11.44m
🗃️ Prequalified Tender — $0
📩 Limited Tender — $117.32m
An additional $22.92m was awarded to Amazon Web Services (AWS) for the provision of web services. However, the Department of Health recorded the contract in AusTender under Temporary Personnel Services, highlighting a systemic issue with the accuracy and consistency of AusTender reporting, where contract categories often fail to reflect the actual nature of goods or services procured.
📣 Are you a Startup Selling to the Government, or want to?
Each week, more than 1,500 federal contracts are published on AusTender. We track what we can, but we cannot review every supplier to identify which companies are startups.
If you’re:
Tendering for government work
Already delivering to a government customer
Recently awarded a contract
We want to hear from you.
You do not need a press release or a comms team; leave a comment below or get in touch.
We are always looking for stories that help explain what is actually happening in the B2G and GovTech markets.
🧱Build Better
You may have seen the short posts we’ve been sharing on LinkedIn—observations about why startups stay away from government and why so little changes. Here on Not on the Panel, we are taking those ideas further. Each week, we will unpack one of those assumptions in detail and try to explain the prevailing narrative, how the system actually works, and why the rules are rarely the main barrier.
Central to our investment thesis is the belief that if we want more founders building for government, we need to give them a clear starting point, something solid to build from, and patient, informed investors.
Many startup founders believe government compliance shuts them out of public sector work. It doesn’t. The real issue is the complexity, with layer upon layer of it. While the rules might make sense to bureaucrats and lawyers on paper, in practice, they often don’t make sense to the rest of us. In government, words can take on completely different meanings once you're inside the system.
Even if you follow the rules, you can still be locked out without ever knowing the door existed. Let me explain.
The government has few ways of buying things:
Open Tender — Publicly available opportunities (in theory)
Limited Tender — Agencies can approach one or more suppliers directly
Prequalified Tender — Restricted to suppliers who responded to an earlier process
Procurement from existing arrangements - Standing Offers or Panels
These sound clear enough. But once you start reading AusTender notices, tracking panel arrangements, and decoding Commonwealth Procurement Rules (CPRs) and CPR Exemptions, you realise how quickly the public-facing logic falls apart.
Let's start with Open Tender.
There are genuinely open Requests for Tender (RFTs) that do not require panel membership, but they are the exception, not the rule. Most open tenders are only visible to suppliers who are already on approved panels. Agencies use the DS4P platform (Digital Sourcing for Panels) to manage these processes. Unless you are already on the panel, you do not even see that the tender was available, let alone bid on it.
So, an RFT is open. A panel you're not on is also open. However, not all panel providers can see the open tenders. So it is open, even when it is closed, and closed, even when it is open. When it comes to government procurement, open always means open, unless it's closed. (I genuinely apologise for the confusion and frustration this may cause.)
Let me explain:
SON3751667 is the Management Advisory Services (MAS) Panel. Sadly, I know this code by heart, and no, I am not proud of it.
The MAS Panel, issued by the Department of Finance, has 451 approved providers. However, procurement officials only need to invite three to provide a quote for any given deal; this still counts as an open tender. Why just three? Under the CPRs, officials are required to weigh the cost of the procurement exercise itself alongside the cost of the services when determining Value for Money.
Every submission must be read, scored, documented, and justified. For high-visibility procurement, it's not unusual for each response to go through two rounds of evaluation and multiple layers of internal approval. Multiply that by 100 suppliers, and you're suddenly looking at weeks of work across various teams. Do that for 400? And you're running a project bigger than the contract you're trying to award. So, the process gets streamlined. Agency buyers go to trusted panel suppliers; they invite three, maybe four, suppliers, and usually, they ask the ones they already know to meet the requirements for competitive tension. Or worse, they invite random panel members to "make up the numbers" and tick the box.
Limited Tender is another story.
Most people think of a limited tender as a panel procurement. In reality, a limited tender is a tender that meets one of the eight exemptions under section 10.3 of the Commonwealth Procurement Rules (CPRs).
Let's look at CPR 10.3(d)(iii), which allows agencies to direct source if the delegate is satisfied that there is no reasonable alternative and only one supplier can deliver the work.
That sounds like a strict test, yes? In practice, we know of an offshore startup that won an Australian government contract under this exemption, but we also know an Australian company that could have delivered similar functionality.
They were never considered. There was no market scan, no comparative evidence, just a justification that passed muster with a delegate who probably had too much on their desk to argue. Remember, the government goes shopping when it's hungry, and that urgency shapes everything.
There is a tool that could have surfaced that alternative. It's called a Request for Information (RFI). It's not part of the official procurement pathway; rather, it's a market-sounding tool designed to find out who else might be able to do the work. But it is rarely used, and when it is, it's often rushed, poorly scoped, and never followed up. When time is tight, or minds are made up, the RFI is the first thing to go.
Our headline article on VMware outlined just how significant the limited tender opportunities can be. This is not unique to VMware. A 2015 audit by the Australian National Audit Office found that nearly half of all Commonwealth procurement by value in 2013–14 was awarded through limited tenders, often with minimal competition and inconsistent justification. While this strengthens the investment case because established vendors can grow recurring revenue without returning to the market, it also shows how difficult it is for startups to break in. If new entrants are locked out before they even see the opportunity, innovation stalls and procurement fails to deliver its full public value.
Then there is the Prequalified Tender.
This one sounds like another panel, but it's not. It refers to a pool of suppliers who responded to an earlier approach, usually an RFI or EOI. The keyword is earlier. If you missed the call, you missed the contract. You can't apply to be prequalified later. If you weren't already in the room, you're out of the running before the process even begins.
So yes, the system is confusing. But it's confusing in very predictable ways.
Government complexity exists for a reason. When you are the largest buyer in the economy — and in some markets, the only buyer — your decisions must be defensible, repeatable, and auditable. This is not a startup demo day. It is public money. Procurement rules exist to protect trust, prevent corruption, and ensure fairness in markets where the stakes are national and the budgets are massive.
Government procurement is not optimised for discovery. It is optimised for defensibility. It's a system designed to survive audits, not surface innovation. Every step is about reducing risk and demonstrating fairness. That means familiarity gets rewarded, and novelty often never gets seen. Under CPR 3.4, Value for Money is not about who has the best product. It's about who can provide the most benefit (financial and non-financial) with the least risk. It's about who satisfies policy, meets timelines, survives scrutiny, and leaves behind a defensible record.
Startups don't fail because they can't deliver. They fail because they don't know how to communicate in the language the government understands.
It's like that scene in The Simpsons, where Homer is being coached in witness protection.
"When I say 'Hello, Mr Thompson,' you say 'Hi.'"
They try it again and again. Homer smiles. Nods. Says nothing.
Too often, founders find themselves in this position. They have the technical skills and innovative products, but when asked to demonstrate things like risk management plans or quality assurance, they fumble. It is not that they lack these capabilities; they are not fluent in the language of procurement to show they meet the criteria. Like Homer, they misinterpret what's being asked.
Meanwhile, federal agencies continue awarding huge software and IT contracts to incumbents.
The solution is not to abolish compliance (it exists for a reason). The solution is to help startups learn to navigate it. Founders can be taught to map their strengths to the government's checkboxes and to document their practices in a way that satisfies internal reviewers. In short, they need to become bilingual and fluent in both innovation and procurement.
Once you demystify the terminology and understand the logic behind the rules, compliance stops being a blocker. It becomes just another part of doing business with the economy's biggest customer.
This is precisely where we come in.
We guide you through the maze of procurement processes, helping you navigate the complexities and turn compliance into a strategic advantage.
The first challenge is education. Most startups don't even consider B2G as a customer, not because they lack solutions, but because they don't know how the system works. Procurement feels slow, opaque, and closed off. Our mission is to demystify that process, explain the rules, show where the real entry points are, and help founders understand how to align with how the government actually buys.
None of this is simple. But it is necessary. If we want better public services, stronger sovereign capability, and a more ambitious tech ecosystem, we need more startups building for government. And they need a fair shot at getting in the door.
📄 Method and Scope
Each week, we track reported contract data from AusTender, the Commonwealth government’s procurement reporting system. Our focus is on contracts classified under software, SaaS, and digital services, as these categories are most relevant to technology founders building with or for government.
AusTender publishes thousands of contract notices each week across a wide range of categories. While we rely on this data as our primary source, we cannot guarantee the accuracy or timeliness of individual listings.
We do not attempt to cover every sector or supplier. However, if a startup is awarded a contract and we can verify it, we will include it, regardless of classification. These stories help surface where momentum exists and where future opportunity may lie.
✍️Meet the Editor
Hi, I'm Mat, Startup advisor, former bureaucrat, investor, and lifelong procurement tragic.
Across my career, I’ve worked on four of the most significant non-defence contracts in the Commonwealth. I’m still frustrated that early-stage companies are largely shut out of the government market.
This Substack is part of how I’m building in public. I work with founders and investors who see the $80 billion business-to-government opportunity in Australia.
We also support founders with the essential but often overlooked areas like governance, risk, and strategy.
If you’re a founder trying to break into government or an investor who sees the chance to back generational companies in this space, feel free to reach out. I’m always up for a coffee.