All nine recommendations from a NSW procurement inquiry will be supported by the Minns government, including more consideration of retained economic benefit and an easier path for small suppliers to the state’s $42 billion annual spend.
In the third shakeup of NSW procurement this month, agencies also face additional compliance measures and new standards for managing contracts, providing feedback to suppliers, and disclosing smaller deals.
The government will also review the current standard contracts being used and examine the “inequitable” requirements being imposed on small and medium suppliers.
The changes announced Friday are the latest in a series of promised reforms by the Minns government to bring more transparency and accountability to state buys while channelling more of them to local suppliers.
“By reforming the way the government spends its precious procurement dollars we can unlock new opportunities for local suppliers and small businesses,” Minister for Domestic Manufacturing and Government Procurement Courtney Houssos said.
A NSW Legislative Council Committee has raised doubts about whether the state’s annual $42 billion spend is delivering the benefits it should as a key economic and social tool.
The Committee released an interim report in June that warned of loose definitions of value for money, outsized barriers for smaller suppliers and that the government body with oversight of procurement is not functioning effectively.
On Friday, the Minns government acknowledged the findings and said it will support all nine recommendations.
The response includes government commitments to “strengthen” the current definition to make spending more responsible and to work with agencies on consistent implementation. The update will include an explicit nod to job creation and the growth of domestic and regional industries.
The government has also promised new measures to “uplift agency compliance” with the NSW Procurement board and a new “robust” compliance and enforcement mechanism for the Board.
The Board is responsible for the state’s procurement framework but is “not functioning effectively as an oversight body”, the committee found. It said the Board has struggled to verify agencies self-attestation and lacks data to monitor more widely.
The Minns government has already committed to a review of the accreditation system that gives agencies authority to manage their own procurements after fears consultants were exploiting a lack of capability.
In the latest response, the government has also committed to simplifying contracts following a review of the standard agreements being used across government and the terms they impose on suppliers.
The interim report had warned certain requirements like insurance and accreditations are disproportionately felt by SME suppliers. Both the requirements and the standard contracts being used will be reviewed.
A call to lower the disclosure threshold for contracts from $150,000 to $100,000 was supported in principle and the government flagged potential privacy issues and law reform for implementation.
The government is also committing to modernise contract management standards and set minimums for contract monitoring, retention and storage.
NSW agencies use various contract management systems, and many deals aren’t retained in centralised repositories.
The government has also committed to ensuring feedback is provided to all parties involved in a competitive tender bid, a step up from the current policy to only provide it when reasonably requested.
Earlier this month the Minns government announced it will establish the first-ever NSW government debarment scheme to ban suppliers that engage in serious misconduct or abuse of trust.
A day later it also announced a new ‘if not why not’ rule that will force government buyers to explain why in cases they bypass local suppliers for significant contracts.
“The inquiry’s findings demonstrate that the reforms we have already put in place have us on the right path, Ms Houssos said.
“There’s clearly more work to be done to make sure more of the NSW Government’s $42 billion spend can go to support local jobs and local industries.”
Do you know more? Contact James Riley via Email.