NSW government reduces procurement red tape for SMEs

The procurement board has identified seven strategies that it plans to action in its strategic directions statement for the 2014-15 business year.

The NSW government procurement board has updated its strategic directions statement for the 2014-15 business year, with the aim of helping small to medium enterprises (SMEs) maximise their opportunities.

This year's statement has identified seven strategies that can be delivered as part of the procurement reform. It indicated that the board plans over the next 12 to 18 months to encourage agencies to test the market to promote innovation within the supplier base, which in turn will increase competitive tensions in the market to make it a sustainable one in the long term.

From the second quarter of 2014, the procurement board will begin reviewing agencies' experiences with SME opportunity statements and participation plans, in order to engage SMEs in contracting chains and advise the government about enhancing the current SME policy.

There are also plans to trial online forums on ProcurePoint to encourage greater SME participation in pre-qualification schemes.

Meanwhile, it is expected that the Industry Advisory Group will develop SME engagement strategies for new businesses, micro businesses, small businesses, and regional or remote businesses for agencies to adopt as part of their procurement planning process.

At a forum for IT SMEs this week, NSW Minister for Finance and Services Dominic Perrottet said the updated statement would assist SMEs to engage with government and promote innovation.

"SMEs are major contributors to our economy and are one of the largest groups of employers across the country," he said.

"In NSW alone, about 1.5 million people are employed in more than 680,000 small businesses and SMEs now account for 70 percent of government expenditure on ICT.

"It's time for government to get out of the way and remove unnecessary red tape, to allow small and medium businesses to innovate, grow, and succeed."

Additionally, the NSW government said it is committed to simplifying the way suppliers can upload information to its online portals, as well as trialling alternative contracting approaches, including four procurement activities where suppliers will be encouraged to base their tender responses on their standard terms and conditions.

In steps to further reduce the red tape associated with procurement process, the board outlined that it will explore opportunities for "mutual recognition" of pre-qualification schemes across states and territories, with the goal of enabling suppliers to pre-qualify to supply to NSW agencies "once for all".

The procurement strategic statement pointed out that the government procurement practices need to shift from being "one-size fits all" open tender and fixed-term panel contracts to expanding agencies' use of new approaches, and to learn progressively about the "benefits and possible pitfalls from these new ways of procuring goods and services".

The board plans to trial an online performance based rating scheme for pre-qualification schemes as part of the NSWBuy platform.

Perrottet said the NSW government is making it easier for SMEs to smooth the path between an innovative idea and a market-ready product or service.

"We are accelerating rapidly our procurement reform program, with 45 new actions under the procurement board's statement that will make it easier for enterprises of all sizes to do business with the NSW government," he said.

"Under the plan, we will make it easier for SMEs to demonstrate potential value for money under short-term, high-risk contracts worth up to AU$250,000.

"We also require NSW government agencies seek at least one quote from a SME on contracts worth up to AU$1 million to enable them to get a foot in the door."

The NSW procurement board developed its initial strategic directions statement in December 2012, which outlined the major actions that will be implemented over the next 12 to 18 months. It forms part of the government's overarching IT reform policies that are aimed at improving customer service, data management, procurement, and industry engagement.