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Albanese foreshadows more ICT SME contracts under Future Made in Australia Office

by Judy Hurditch •
Free resource

Australian IT companies that fit the small and medium enterprises (SME) definition will secure more government contracts should Labor win the next Federal election, according to Labor leader Anthony Albanese.

Albanese unveiled A Future Made in Australia at the NSW Labor State Conference on October 8 2021.

The party’s ten-point blueprint will ‘ensure that the Australian Government is backing Australian workers and Australian businesses’ he stated.

Albanese said that ‘in Government Labor will develop ‘Future Made in Australia Industry Plans’ in areas including ‘…digital, innovation and start-ups….’ and maximise small business participation in Commonwealth procurement’.

Labor’s wants to see taxpayer dollars funding local jobs and addressing the workforce gaps that were created by the COVID-19 pandemic.

Albanese said Labor will establish a Future Made in Australia Office within the Department of Finance. This appears to emulate US President Joe Biden’s Made in America office.

The Finance Minister and Minister for Industry will lead a Cabinet sub-committee on procurement as part of Labor’s planned approach.

The Fair Go Procurement Framework, part of the 10 point plan, will require ‘those that gain government contracts to pay their fair share of tax’. 

Albanese has also said that Labor plans to give Australian small and medium tier and regional businesses more opportunities to bid on government procurements. Tenders will be broken into multiple packages, allowing several suppliers to help fulfil single projects. 

Supporting the Australian economy through sovereign procurement has achieved heightened focus across the country.  Intermedium’s summary of current procurement policies in the major jurisdictions is provided below. 

 

Jurisdiction

SME Contracts

(normally <200 employees)

Details

Indigenous Contracts

(normally 50% owned)

 Details

Federal

10% all of Total Contract Value TCV)

 

35% of contracts valued up to $20m

SMEs can be directly engaged (ie without an ‘open approach to market’) for contracts up to $200k. 

 

Value for money (VFM) must be demonstrated.

3% Total Contract Number(TCN)

1.25% TCV

Direct purchasing for all remote procurements if VFM is demonstrated.

 

For all other procurements, direct purchasing between $80k-$200k TCV to rise 0.25% per year up to 3% in 2027

NSW

30% TCV excluding Labour hire

Sovereign procurement taskforce recommendations accepted Feb 2021.

3% TCN

First consideration on procurement schemes up to $250k;

 

Additional weighting on non-price evaluation criteria;

 

Suppliers to include indigenous participation plan when bidding for contracts over $10m.

Victoria

 

Reducing barriers: e.g. breaking up projects, early engagements, fair pay clauses

1% TCV

Engage directly for activity below $3m.

 

Encourage bigger contracts to be broken up, allowing for a portion to be delivered by an indigenous company.

Queensland

25% TCV

10% weighting for SMEs in tenders; engage directly up to $500k; at least 1 SME shortlisted

TCV to rise to 30% by June 2022

3% TCV

Consider as part of the non-cost value for money criteria;

 

Use ‘selective offer processes’ if the requirement can be provided by an Indigenous company.

WA

 

20% weighting for “local” WA business, for contracts over $750k (likely to benefit SMEs)

3% TCN

Direct procurement permitted from a Common Use Agreement, provided value for money is demonstrated.

In 2019-20, SMEs (across all categories of supply) were awarded 25 percent of Commonwealth total contract value (TCV), according to Department of Finance statistics.

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