A new NSW Government pilot program is designed to make its easier for small businesses to win work from their local council – boosting local economies and communities.
The Local Procurement pilot program, part of the NSW Government’s Making Business Easier offering, aims to increase direct contact between small businesses and councils by cutting red tape and simplifying the tender process.
Minister for Small Business Damien Tudehope said the six month pilot would enable small businesses to operate on a more level playing field when securing contracts with their local council.
“NSW Councils spend significant funds on goods and services each year but many small businesses couldn’t compete with larger competitors for contracts,” Minister Tudehope said.
“A toolkit has been developed to help small businesses win council contracts, while providing tips to local councils on how they can become more small business friendly. This is a great opportunity for local businesses to tender for local government work and boost local economies.”
In June, the NSW Government changed the Local Government Act 1993 to increase the threshold for tenders from $150,000 to $250,000, which will provide more opportunities for councils to engage businesses directly without a tender process.
Minister for Local Government Shelley Hancock said the Local Procurement pilot was a great example of how state and local governments were working together to help small businesses reach their full potential.
“Several councils including Georges River Council, Eurobodalla Shire Council, Campbelltown City Council and Central Coast Council have already expressed interest in the program.
“I encourage all NSW local councils to get involved in this fantastic program and see more of their contracts secured by their local small businesses,” Minister Hancock said.
The initiative has been welcomed by the small-business sector, though with some provisos. Yanir Yakutiel, CEO and founder of Lumi, said, “It’s a good move in the right direction and it’s a very positive new program for SMEs. However, I think there are still three key issues that SMEs will still face when they are bidding for contracts through this new program: the first one being compliance costs and the issues of making it economical for them to compete; the second is the tender process itself, which will be very extensive as it was initially created to try and create an even playing field, and the actual result has been the opposite (it has given bigger players a better advantage); and thirdly, when it comes to engaging contracts, where the government can really help is to improve the terms of trade to pay quickly and not require long payment periods, as that’s very difficult for small businesses to finance.
Daniel Lai, CEO of information security and collaboration firm archTIS, added, ”Small businesses are the backbone of Australia’s economy, creating approximately seven million jobs and contributing to 57 per cent of Australia’s total GDP. It’s great to see the NSW Government take some concrete steps towards helping encourage and support small businesses to work more closely with councils and provide more jobs with the introduction of this new pilot program.
“The reality is, however, Australia’s small- business sector has faced many challenges over the years in gaining traction particularly given hostile policy and regulatory settings that have had negative consequences on their ability to grow in a competitive market.”
Lai is adamant that this conversation needs to be expanded nationally, with the federal government needing to understand the ecosystems and lifecycle of SMEs and what critical support they need to fuel the transition from good ideas to healthy sustainable businesses.
“We need recognition at a federal level that our current process for procurement is limited; it tends to favour global primes rather than encouraging more favourable opportunities for SMEs,” Lai said. “We need open dialogues between small business and the Australian government at both a state and federal level that can help support and grow start-ups across the country and turn them into real export earning and job-creating businesses.”
