How QLD Government Agencies can meet new SME procurement targets

The Queensland Government has been pushing hard for agencies to source from small and medium enterprises (SMEs), setting new targets for procurement teams to achieve.

Since July last year, there has been a collective requirement for 25 percent of the state’s procurement spend to be used sourcing from regional SMEs.

And from this month, the Queensland Government must specifically spend a quarter of its $1.2 billion annual IT purchasing budget with SMEs.

These new procurement targets, which form part of the wider Buy Queensland campaign, are in direct response to the COVID pandemic.

The public sector shift towards SME sourcing

Queensland is not alone in its efforts. Both the Federal and NSW governments are running similar initiatives.

However, Queensland is aiming to go a step further than the Federal Government’s minimum target, with plans to source 30 percent of all government purchases from local SMEs by July 2022.

Understandably, this all puts a lot of pressure on Queensland government agencies and their procurement teams. Regional SMEs need to be identified who not only meet the size but also compliance requirements.

There is also the question of contract delivery. As smaller businesses do not often have the same resources as larger organisations, it can be hard to find a supplier who can deliver on the needs of a contract. Proper evaluation of their capacities and KPI tracking (in short, Vendor Relationship Management) (link?) becomes vital.

All of this marks a major change in how government agencies need to address procurement moving into 2022.

Why are governments suddenly pushing to buy from SMEs?

State governments spend billions of dollars on goods and services. This means the difference they can make through social, local and ethical procurement is significantly bigger than most private-sector businesses.

By focusing on investing in regional SMEs, the Queensland Government is looking to invest in local communities, and provide much needed relief for SMEs hit hard by the pandemic. The change in procurement policy also helps stimulate certain sectors, such as the Queensland ICT industry.

There are also significant benefits for engaging SMEs, whether you’re in the public or private sector. These include, but are not limited to:

• Increased customer service and visibility: A contract in the tens of thousands is significant for an SME, so they will often go above and beyond to meet your needs.

• Decision-maker access: In smaller businesses, the hierarchy is more flat, giving you more access to the people in charge who can drive immediate action.

• Flexible supply chain: Being able to adjust to meet customer needs is expected in SMEs, even if it doesn’t fit a traditional process.

But while the benefits are clear, how to effectively source from smaller businesses is often not.

How departments can procure from reliable, regional SMEs

Thankfully, there are procurement solutions available - such as VendorPanel - that are designed to help government agencies source from local SMEs.

As an example, in one part of the platform - VendorPanel Marketplace - suppliers provide information on their organisation size. Through geo-location, procurement teams can also ensure local and regional suppliers are used to meet policy targets.

VendorPanel also helps with reporting and measurement, a major pain point for government agencies. Normally, it can be difficult and time consuming to report on the success of an initiative. But with VendorPanel:

• The process can be automated, making the whole process much simpler.

• Everything can be tracked and reported on through a single platform.

• All correspondence goes through the system instead of email, making sure everything is visible and audit-ready.

VendorPanel is the procurement platform of choice for councils, state governments and commercial businesses. To learn why, and to find out how we can help you meet your procurement goals, contact us today.