Government procurement competition to heat up under UK-AUS trade deal

The Australia-UK Free Trade Agreement is set to add more heat to the consultancy war for government procurement contracts. 

The deal, the A-UKFTA, is poised to open up free access to UK firms to bid for government work worth an estimated $18 billion annually. 

Going the other way, The Australian Department of Foreign Affairs and Trade (DFAT) says the agreement will offer more opportunities for Australian businesses to secure UK Government contracts – worth an estimated half a trillion dollars annually. 

The UK’s Department for International Trade says the deal is expected to increase trade with Australia by 53% and boost the UK economy by £2.3 billion. 

“This means that UK services from architecture and law to financial services and shipping will be able to compete in the Australian market on a guaranteed equal footing. This could increase exports of UK services to Australia, worth £5 billion in 2020,” said the department in its ‘Ten key benefits of the UK-Australia Free Trade Agreement.’

Australia and the UK will remove unnecessary obstacles to exporting and importing between our two countries under the deal. 

“The A-UKFTA locks in greater access for Australian goods, services and construction suppliers of all sizes, including small and medium sized enterprises (SMEs) and Indigenous-owned businesses, to the government procurement market of the UK,” DFAT said. 

DFAT says the Government Procurement Chapter includes commitments that go beyond the benefits Australia already receives from the UK under the World Trade Organisation. 

DFAT says this will create “more opportunities for Australian suppliers to secure UK government contracts.”

Small and Medium Enterprises also get the nod through “provisions which will support SME engagement in bilateral trade through commitments by both countries to provide easy access to information that will assist SMEs interested in trading, investing, or doing business with the other country,” DFAT says.

With regard to supplying professional services, DFAT says Australian suppliers of all sizes (and Indigenous-owned businesses) will have “the guaranteed right to bid for a wide variety of UK government goods, services and construction contracts.” 

“British companies will now be able to bid for Australian government contracts worth around £10 billion per year on an equal footing with Australian companies.”

The UK Department for International Trade

The UK government says the deal will cut red tape faced by more than 13,000 UK SMEs which export goods to Australia. 

“Customs authorities will release all goods within 48 hours, if requirements have been met, with fast-track parcels and perishable goods like food being released within six hours,” The UK’s Department for International Trade said. 

Other benefits of A-UKFTA include the elimination of trade tariffs on goods, the establishment of “deep people-to-people links” for workers between the two counties and the “free flow of data” for British businesses to service Australian customers. 

Economist Dan Nahum, of the Australia Institute’s Centre for Future Work, argues governments can get more economic benefit during the coronavirus recovery from paying public servants to do work currently done by consultants. 

“If you spend money on decent middle-class wages in the public service, that’s going to keep your economic recovery going more than sending money overseas to partners in consultancies,” Nahum told the Manderin. 

“It’s a much more efficient way to get the public money into the economic recovery.”

UK Foreign Secretary Liz Truss and Defence Secretary Ben Wallace have travelled down under this week to build on the recently signed free trade deal and hold key defence talks with Australian counterparts, Foreign Minister Marise Payne and Defence Minister Peter Dutton.  

The UK delegate visit also includes a trip to Adelaide for an agreement to boost UK-Australia business links for key industries including space, cyber, science and technology with the State of South Australia.