Commonwealth Procurement Rules overhauled: Major changes for small business and climate

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The Australian Government  has committed to procure $14 billion with small and medium businesses under its Buy Australia Plan and pledges to double contract spend. 

Revisions to the Commonwealth Procurement Rules (CPRs) allow up to 20 per cent of the government’s $70 billion annual contract spend to now be offered to small and medium businesses (SMEs) – boosting the allocation from 10 per cent.

Minister for Finance, Senator the Hon Katy Gallagher and Minister for Small Business, the Hon Julie Collins, announced the revised CPRs citing “they would open the door to more opportunities” for SMEs across industry sectors. 

Climate change requirement

In addition, the revised CPRs now require the procuring official to consider a procurement’s broader impact on climate change when undertaking a value for money assessment.

“This change goes hand in hand with our commitment to reduce Australia’s emissions by 43 per cent by 2030 and provides an opportunity to showcase Australia’s abundance of talent, resources and innovation,” a government press release said when announcing the changes effective from 1 July. 

The Australian Government has spent around $190 billion on government contracts over the last three financial years. 

In a bid to drive competition, the CPRs will now encourage entities to approach multiple suppliers, when procuring from a panel arrangement. 

The Albanese Labor Government introduced a 10-point Buy Australia Plan, which includes a policy to “level the playing field by bringing in a Fair Go Procurement Framework requiring those that gain government contracts to pay their fair share of tax.

More procurement shifts to come

Minister for Finance Senator Katy Gallagher said more procurement announcements may follow in due course. 

“This is the first step in delivering on our Buy Australian Plan and we’ll have more to say about implementing this key element of Labor’s plans to build a future made in Australia.”

“Small businesses shouldn’t be locked out from opportunities to gain government contracts just because they might not have the leverage of bigger businesses,” Minister for Small Business, Julie Collins said.

The other aspects of Labor’s ten-point Buy Australia Plan include:

  • opening the door to more government work for more small and medium businesses by decoding and simplifying procurement processes
  • establishing a Future Made in Australia Office, backed up by laws that will lock in key elements of Commonwealth Procurement Rules (CPRs)
  • Maximising opportunities for Aussie businesses in major infrastructure projects
  • establishment of an Secure Australian Jobs Code to prioritise secure work in government contracts ensuring government has purchasing power is aligning with businesses that engage in fair, equitable, ethical and sustainable practices
  • more opportunities for First Nations businesses, supporting long-term work
  • supporting industry sectors through the government’s purchasing power
  • use government spending power to take action on climate change and support energy projects 
  • strengthen Defence industries and capability
  • making National Partnerships work to maximise the use of local workers and businesses.

“Achieving value for money is the core rule” of the CPRs the Government says. Procuring officers will must consider environmental benefits of each submission.

This includes: 

  •  environmental sustainability of the proposed goods and services (such as energy efficiency, environmental and climate change impact and the use of recycled products)
  • recognising the Australian Government’s commitment to sustainable procurement practices
  • entities are required to consider the Australian Government’s Sustainable Procurement Guide where there is opportunity for sustainability or use of recycled content. 

Read the updated Commonwealth Procurement Rules. 

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PASA (Procurement and Supply Australasia) is the leading provider of information, education and networking opportunities to procurement professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, training, awards and PASA CONNECT membership network. PASA is a trading name of BTTB Marketing Pty Ltd. BTTB Marketing has operated under the BTTB, CIPSA Conferences and PASA names for over twenty years. https://procurementandsupply.com/

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