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Small businesses deserve a fair shot at winning government procurement contracts says Senator Pocock

Pocock Small Businesses

Independent Senator David Pocock says growing Australian companies are being shunned in favour of multinational firms when it comes to winning government procurement contracts.

He suggests sovereign Australian companies are missing out on their share of the government’s $70 billion procurement spend, saying the commonwealth government should be better at spending money, getting value for money and looking at things like retained economic benefit.

Speaking to The Mandarin, Pocock said, “So investing in Australian companies – sovereign Australian companies – that are building up their capability in a whole range of industries from defence to quantum computing. We need to ensure we are investing in them and not just going with multinationals.”

Pocock told the publication that small business owners tell him they want to be suppliers to the government rather than recipients of government grants, while claiming local companies are more likely to win overseas contracts than with the Australian government due to the established track records of big brand consulting firms.

“It lends itself to a system where people are just going for what they think is the safe bet, which is the big multinational because everyone knows their name,” he said.

“In reality, what ends up happening is that multinationals are often skimming the cream off the top and subcontracting that to smaller Australian companies to help deliver that capability, that service. That is a ridiculous use of taxpayer money.

“We should have a system where smaller companies can compete, and they can win contracts.”

Last year, in an article written for InnovationAus.com, Pocock highlighted the need for integrity in procurement while drawing attention to the issues in Australia’s public procurement system.

He said companies are falling at the first hurdle due to their staff not having the requisite security clearances, yet they are unable to apply for security clearances without first securing a government contract.

“Government buyers report being given a list of companies ordered from A to Z and asked to choose three names to tender for a contract.

“Companies appearing earlier on the list reliably win more contracts than those appearing later on the list. ‘AAA Advisory’ would have a significant competitive advantage over ‘Zenith Consultancy,’ simply by virtue of being found on page one,” Pocock wrote.

He also highlighted a pattern of behaviour where large companies are setting up SME arms and 51-per cent-Indigenous-owned subsidiaries to make themselves eligible for procurement opportunities targeted at SMEs and Indigenous-owned companies.

“PwC Indigenous Consulting, for instance, has won $51.81 million in AusTender-listed government contracts since the Indigenous Procurement Policy was introduced in 2015.

“We have government-wide procurement targets for Australian SMEs in our Commonwealth Procurement Rules. But we don’t have a process in place to guarantee that the public servants making the procurement decisions actually know whether or not they are dealing with an Australian SME when inviting a company to bid on – or when awarding – a government contract.”

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