The NSW government has announced new procurement reforms that will see the establishment of a debarment regime, in a bid to ban suppliers who abuse trust or engage in serious misconduct.
Protecting the state’s $42 billion annual procurement spend, the new legislation will target suppliers who partake in a variety of acts, such as fraudulent or corrupt conduct or failing to comply with taxation laws.
Depending on the seriousness of the conduct and any mitigating circumstances, companies, directors and senior managers also run the risk of suspension or other penalties.
Additionally, the regime means debarment actions will also apply to any subsequent ‘phoenix’ operations, such as when a company is liquidated and another is started to continue business activities without debt.
The debarment scheme is the first of its kind for NSW, but similar regimes currently exist in Western Australia and other international jurisdictions.
Commenting on the new reforms, Courtney Houssos, Minister for Domestic Manufacturing and Government Procurement, said it’s essential that public money is spent responsibly and with integrity.
“This announcement begins crucial reforms to ban dodgy operators and maintain public trust in the way the NSW government is spending taxpayers’ funds,” she said.
“Thousands of hard-working, honest suppliers engage with the NSW government every year. This regime will make sure we are not engaging with bad apples.”
The Independent Commission Against Corruption (ICAC) raised a debarment regime in its 2024 Operation Hector Report.
Last Tuesday, it was also announced that Minister Houssos has issued a new direction to the NSW Procurement Board called ‘If not, why not’.
This new mandate means that NSW government agencies must engage with local NSW suppliers before going to tender for projects that are worth more than $7.5 million.
If a contract is awarded to a supplier outside of NSW, agencies will need to undergo a ‘please explain’ process before the contract is awarded, explaining why they did not choose a local supplier.
Houssos has also instructed the NSW Procurement Board to ditch the previous Liberal-National government’s prohibitions on local content rules, meaning NSW government agencies can now consider local content and local development opportunities when suppliers bid for government contracts.
