New Government Procurement Rules To Favour SMEs As New Targets Set By Federal Government.
New Government Procurement Rules To Favour SMEs – Australia’s federal government has set new targets designed to ensure smaller businesses get a better chance of delivering systems and services to government departments.
The changes double the contract threshold for government departments to go director to small business to $A500,000, while procurements requiring an economic benefits assessment will go from $4 million to $1 million.
The reduction in economic benefit assessment analysis from $4 million to A$1 million means smaller deals can elevate the benefits of supporting smaller, local suppliers.
The changes come into effect on July 1 and they include the implementation of a new Commonwealth Supplier Code of Conduct will also come into effect from July, imposing an expectation that suppliers act ethically. A deep dive into this code of ethics is interesting, given the open-ended nature of its requirements.
The changes will also impact on government panel buying which has allowed departments to set up a services panel then claim a fair tender process has been undertaken if they approach 1 supplier on the panel because the creation of the original was a tender process. Government buyers will now be required to approach at least 1 SME for every request for quote.
As part of the changes around exclusive panel buying, 5 per cent of agencies’ spending on services through the MAS and People Panels may be sourced directly to First Nations businesses not on those panels through a new flexibility allowance.
The government has set a target to source 25 per cent of procurements below $1 billion, and 40 per cent of procurements below $20 million, from small and medium business. The previous target of 20 per cent overall procurement was being met according to government but was skewed by large multinationals with ABNs categorising division as Australian SMEs.
“To say you’re an Australian business if you have an ABN, to me, seems quite ridiculous, – that means Microsoft, Boeing and Fujitsu,” said Independent Senator David Pocock during Senate Estimates last month.
You can learn more about new government procurement rules to favour SMEs here, read the supplier code of conduct here, or find more SEN news here.
“New Government Procurement Rules To Favour SMEs As New Targets Set By Federal Government.”
