"The tendering process is a disaster [and] government management of IT contracts is totally wrong."

PicNet has been a government-endorsed supplier for two years and in that time has answered two tenders, which, in Tapia's words, "have been a complete waste of time".

"A tender for a A$2 million project is the same size as that for A$15,000," he said. "Smaller players cannot compete in that environment, [because] companies can spend more time answering the tender than doing the work."

Global services firm Capgemini's vice president of technology services, Bradley Freeman disagrees with Tapia's claims because "there is room in the market for both" and customers should be using them for "totally different purposes".

"Our clients use us for transformation through technology [and] we work with the 16-person businesses because they have niche skills and are good value for money," Freeman said, adding the tier-1s give the mid-tier providers sub-contracting opportunities they would otherwise miss out on because of the sheer scale of the services contract.