NSW Aims To Reserve Procurement Budgets For SMEs

February 28, 2021
Procurement

We’re always pleased to see governments around the world improving their procurement processes, by broadening opportunities for all types of business to sell to them.

This week, the Australian state of New South Wales announced a number of new initiatives as part of its ICT/Digital Sovereign Procurement Taskforce, that began midway through last year. The objective of the task force is to assist SMEs to do business with the State Government, particularly in underrepresented categories like indigenous suppliers and start-ups.

While the final report will be released later this year, a number of initiatives have already been launched to level the playing field, including the introduction of SME spend targets, equating to 30% of total IT procurement in direct addressable spend. In addition, 25% of indirect IT procurement addressable spend valued above AU$3 million must also be awarded to SMEs.

We’re interested to know if the NSW Government plan to release data on contracts (including sub-contracts) openly, so that they and the public can monitor if these targets are being met. We’d also like to see the Government  monitor competition and the value it achieves, to be able to assess if different tender strategies secure better outcomes.

At Federal Government level, a similar SME support programme, the Digital Marketplace was introduced in 2016 and has awarded 69% of government contracts to SME’s since the programme launched.

These SME targetted initiatives will have a deep impact on the Australian economy, considering there are approximately 2.06 million small businesses in Australia employing less than 19 people, accounting for 97% of all Australian businesses by employee size. There are also approximately 51,000 medium-sized businesses, employing 20 to 199 employees, which is 2.4% of all Australian businesses.

Awarding government contracts to SME’s promotes local and regional economies, supports job growth, and provides a good return on investment for public funds. We will share more information on the full report and associated initiatives when it launches later in the year

In the meantime, if you’d like to discuss with us our government procurement data, please get in touch.

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