Local software company succeeds despite government rejection

The capture of an $800,000 contract by a software company immediately after it was rejected for a Federal Government R&D Start grant appears to expose flaws in the grant process.

A multimillion dollar AusIndustry R&D Start grant application by Plugged In Software foundered on the question of the commercial viability of its Tucana software technology.

Yet within weeks of the rejection, the Brisbane company negotiated a major contract for the Tucana technology software with Legal Research Centre, a leading US legal services outsourcing firm.

Other sections of AusIndustry have given Plugged In praise and financial assistance for its software export performance over a two-year period. The company last year boosted exports by 400 per cent and won an AusIndustry Export Market Development Grant.

The R&D Start grant was withheld because of the grant committee's perception of shortcomings in Tucana's technical innovation and commercialisation potential, said Plugged In CEO David Wood.

A US citizen and former national president of the Australian Java Users Group who holds multiple advanced degrees, Wood said he'd been taken aback by the grant committee's stance on technical innovation.

"It surprised us considering we have filed two patents for this technology this year and are working well in advance of the field."

In terms of commercial potential, not only has Plugged In signed an $800,000 contract for the technology since the grant was turned down, but is in negotiations with three technology companies for OEM licences.

AusIndustry Queensland manager Paul Flynn said he was not in a position to discuss the reasons for the failure of the Plugged In application. AusIndustry parcelled out 210 Start grants worth $177 million in 2000-2001.

Plugged In's experience points to unresolved tensions in the Start program between encouraging ground-breaking technology and the pressure for commercial results. Adding to the potential for inconsistency is the involvement of risk-averse civil servants and the difficulty of assessing truly leading edge work.

Failure to obtain the grant left six-year-old Plugged In facing imminent staff cuts to its 20-person staff.

Wood and his partner Bernadette Hyland rescued the company by leaving their children, aged four and one, with friends in Australia for two weeks while they mounted the 11th-hour mission to the US.

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