The WA Government has launched a review of its procurement framework to examine how billions of dollars in annual public contracts could create more opportunities for local businesses and workers.
The statutory review of the Procurement Act 2020 will consider how the legislation operates and performs, including whether WA’s purchasing power could do more to strengthen domestic capability and advance the Made in WA plan.
Government procurement contributes to the delivery of critical energy, water and transport infrastructure across Western Australia, while directing billions of dollars in annual contract expenditure through the State’s economy.
The review will examine how to maximise the economic benefits of that expenditure, including by creating further opportunities for WA businesses and supporting the development of industries such as advanced manufacturing.
The government said the procurement system must continue to deliver value for taxpayers.
“Government purchasing is one of the most powerful tools we have to support local jobs and grow local industry,” said WA Premier Roger Cook.
“These contracts are not just dollar figures. They are opportunities to back businesses that employ Western Australians and invest in our communities.
“This review will help ensure we get the most from every taxpayer dollar while creating more opportunities through our Made in WA plan.”
The consultation also includes a separate review of Rule C4 of the Western Australian Procurement Rules.
This specific rule establishes the minimum competitive processes agencies must follow when purchasing goods, services and works.
Under the current rules, agencies can use direct sourcing for procurements valued at up to $50,000.
Limited sourcing applies to procurements valued above $50,000 and below $250,000, while procurements valued at $250,000 or more must be openly advertised unless an exception or exemption applies.
The threshold review has already produced preliminary recommendations to lift the direct sourcing threshold from $50,000 to $100,000 and the open advertisement threshold from $250,000 to $500,000.
The recommendations follow consideration of procurement data, cost pressures, comparisons with other jurisdictions, stakeholder consultation and recent reports into procurement misconduct.
Stakeholders who disagree with the recommendations are being asked whether they would prefer to retain the existing thresholds or adopt alternatives of $65,000 for direct sourcing and $350,000 for open advertisement.
If adopted, the changes would affect how often agencies must undertake formal approaches to market, as well as how suppliers compete for lower- and mid-value government contracts.
The Department of Treasury and Finance has released a discussion paper setting out the relevant background, preliminary findings and consultation questions.
The consultation is divided into two parts, allowing stakeholders to respond to either or both.
Part A focuses on Rule C4 and the competitive thresholds applying to goods, services and works purchased by agencies. In contrast, Part B focuses on how the Procurement Act 2020 operates and its effectiveness.
Finance Minister David Michael said government procurement can play a major role in creating jobs and opportunities for Western Australians.
“Every dollar the State spends is a chance to support local businesses, build local capability and help make more things here in Western Australia,” he said.
“This review will help ensure our procurement system delivers value for taxpayers while supporting the Cook Labor Government’s Made in WA agenda.”
Businesses, industry groups, unions, agencies and community members have been invited to contribute.
