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NSW inquiry hears of a greater need for SME participation in government procurement


A recent NSW parliamentary inquiry into the procurement practices of government agencies has examined the challenges small businesses face in securing contracts, while highlighting the measures that are needed to encourage them.

Providing his evidence to the inquiry, NSW small business commissioner Chris Lamont hammered home the importance of the NSW government supporting and promoting measures that are designed to encourage small business participation.

He said this would maintain a vibrant small business sector, ensure a diverse and competitive market, and give NSW taxpayers the best value for money.

The Commission has reported feedback on the complexity of government procurement processes and bespoke contracts, which it says are confusing small businesses and public servants who are responsible for administering procurement processes.

Earlier this year, the Commission also provided a submission to the Parliamentary Inquiry, highlighting reports from the industry that infrastructure and transport works packages were being consolidated, thus limiting the opportunities for small businesses to participate. 

It said another issue that is routinely raised is the need for independent debriefings for small businesses, in order to help them understand why they were unsuccessful for a tender and to help them improve their chances next time.

Commenting on the measures required from the NSW government, Mr Lamont said, “Reducing procurement and contractual complexities, along with measures to promote opportunities for local content and small businesses, will provide tangible and lasting benefits for NSW.”

Back in February, Mr Lamont said complex, costly and time-consuming prequalification scheme registration processes were hindering small business’s ability to tender.

He proposed standardised procurement requirements, thresholds, policies and clear definitions of ‘small business’ and ‘regional business’ to increase understanding and compliance, as well as prevent exploitation.

He also highlighted a need to ensure NSW government agencies pay small businesses within five business days for purchases of up to $5 million, saying “Lack of information and difficulty navigating procurement systems often hinders SMEs from capitalising on opportunities, emphasising the need for agencies to promote existing support services.”

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