The State Government has announced a suite of changes on how public money will be spent on the purchase of goods and services, hoping to increase support for local businesses through government procurement.
The major changes are anticipated to inject an additional $425m into the state’s economy that otherwise may have gone interstate or overseas.
State Treasurer Stephen Mullighan says these changes are designed to get more public spending into the pockets of local businesses and workers.
“Without spending an extra dollar, we can increase the benefit to the economy by more than $400m per year”, said Mr Mullighan.
The procurement reforms will see an initial target to increase the amount spent on South Australian businesses by 5%.
Effective immediately:
• South Australian workers must deliver a minimum of 90% of labour hours on major infrastructure projects worth more than $50m
• Any contracts worth more than $55,000 awarded to interstate or overseas suppliers must be approved by the Chief Executive
• 20% of all labour hours on major projects must be delivered by apprentices, trainees, Aboriginal workers, and long-term unemployed
• Government projects worth more than $55,000 must use local project managers, architects, designers, engineers, surveyors, planners, and other professional services providers
• A broad market assessment will be undertaken to identify South Australian businesses that can deliver projects, goods and services to the government
• An independent complaints process will be established for tenderers who feel they have unreasonably missed out on government work
• An annual project pipeline will be published detailing coming infrastructure projects over $10m to enable lead contractors to prepare thoroughly
• Public projects above $500m will be broken into smaller stages or components to allow multiple South Australian companies the opportunity to participate in projects unless the nature of the project makes this unfeasible
• A minimum of three quotes must be received for government contracts between $55,000 and $550,000 with at least one quote being from a South Australian business
• In addition to value-for-money considerations, public authorities will be required to consider the economic benefit of the procurement to the South Australian economy
• Public authorities are now required to report data on what percentage of contracts are being awarded to non-South Australian businesses.
The reforms follow a major procurement announcement last month that South Australian manufactured products must be used on public housing construction and maintenance programs, where available.
Charter 22 – For a more prosperous South Australia formed a suite of 26 policy recommendations for political parties to consider ahead of the 2022 state election.
Recommendations that ensure a more credible system of quote provision in contracts below $550,000 and the introduction of an exception notice written by Chief Executives of Government agencies for the selection of non-South Australian businesses were among recommendations in Charter22 that have been announced as part of these reforms.
We encourage further investigation into ways to make South Australian businesses more competitive in the procurement process while ensuring optimum value for the taxpayer dollar.
The announcement that 20% of all labour hours on major projects must be delivered by apprentices, trainees, Aboriginal workers, and long-term unemployed may prove difficult to fulfil.
The South Australian Business Chamber will seek feedback from members on this particular point and will engage in consultation with the government to ensure South Australian companies are able to meet the requirements of these policy changes with ease.
More information about State Government procurement can be found here >
