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NSW Government fires wide of tech procurement target

NSW Government fires wide of tech procurement target

A commitment by the New South Wales Government to spend 30% of its technology procurement budget with small and medium-sized businesses has missed the mark despite some encouraging signs. 

InnovationAus revealed, The Department of Customer Service discretely published 2021-22 financial year figures late last month. 

The results showed 28% of addressable ICT spending was allocated to SMEs in the first reporting period. 

The target was a key recommendation of the ICT and Digital Sovereign Procurement Taskforce and applies to addressable spend. This totalled $750 million approximately of the $2.5 billion ICT procurement budget from 1 April 2022. 

InnovationAus reported from a breakdown of the ICT spend which suggests both Customer Service, which owns the policy, and Transport for NSW reported the smallest percentage of SME spend at 23 percent.

The Department of Regional NSW, 52%, and Treasury, 48%, reported the highest percentage of ICT spend with SMEs, but their contribution to spending was only 1% each. 

NSW Health allocated 32% of its addressable ICT spend to SMEs. Its contribution to spending was 20 per cent second-highest behind Transport for NSW.

InnovationAus reported Customer Service said around 5% of procurements were excluded due to poor data extracted from a central spend aggregation system.

Under the spend targets, for spend up to $250,000 agencies may buy ICT direct from an SME. 

For budgets more than $3 million, ICT contracts with NSW Government, an addressable spend target of 25% applies with SMEs via subcontracting or supply chain spend.

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