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Budget flags pro-SME changes to Commonwealth Procurement Rules

by Jeremy Blowes •
Free resource

The government has asked the Australian Public Service (APS) to make changes to the Commonwealth Procurement Rules “as soon as possible, and no later than 1 July 2022” that will make it easier for small-to-medium-enterprises (SMEs) to participate in the government market. 

The request was flagged in Finance Minister Simon Birmingham’s preface to the Agency Resourcing budget paper (BP4). The revised rules would encourage officials to: 

  • Break projects down into smaller work packages to enable more vendors (of every size) to be involved. 

  • Limit or reduce any pre-contract insurance and liability requirements to eliminate the bias favouring large or well-established suppliers. 

  • Not place an unnecessary or unreasonable risk burden on suppliers (for the same reason). 

The updated rules would also extend the government’s “pay on time” policy to all contracts regardless of size, making dealing with government a safer proposition for smaller businesses concerned with their cash flow. 

Finally, the Department of Defence will be authorised to tender with SMEs for contracts under $500,000 from 1 July 2022, albeit only in limited circumstances due to potential national security concerns. A review of Defence’s technology capabilities was announced last year aiming to make the sector’s innovation section “more commercially-driven and outcomes-focused”. 

  • Federal
  • Labour Hire
  • Industry & Investment
  • PM / Premier & Cabinet