NSW procurement policy update to benefit SMEs and local businesses

2020 has been a year of uncertainty, adaptation and hardship for many businesses, especially SMEs. The most recent changes to State procurement policy in NSW should bring a welcome increase in opportunities for small to medium-sized businesses, especially in regional areas.

The updates to the policy mean that Departments and Agencies in NSW are encouraged to direct procurement to the value of $250,000 to SMEs (in cities) or regional businesses (outside cities) as these organisations look to rebuild following a challenging 12 months.

Deputy Premier and Minister for Regional NSW John Barilaro explained the thinking behind these updates.

“What we are saying to NSW Government departments is instead of looking to Sydney, where possible give first consideration to the excellent local tradies, businesses and shops in a local regional community when it comes to procuring goods and services. We want SMEs and regional businesses to be front-of-mind when departments are considering which supplier to engage.”

SME and regional suppliers are also being included in larger or public tender requests. Government contracts valued at over $3 million must now report on sustainability criteria and the SMEs or regional organisations that have been included in the tender process.

For all procurement valued above $3 million, agencies must include non-price evaluation criteria of at least 15 per cent, which considers how potential suppliers will support the government’s economic, ethical, environmental and social priorities.

These changes aim to bring a much needed boost to SMEs and regional businesses, but without the right processes in place could they have a negative impact on State Government?

Many departments will have pre-approved supplier panels and the process of discovering new SMEs and local suppliers to quote can be time-consuming, as well as having a level of associated risk.

VendorPanel is a source-to-contract procurement platform that allows clients to manage both strategic and operational procurement to the same best-practice standard. This includes sourcing through public tenders, from preferred supplier arrangements, or in the open market where many of the SMES and local businesses targeted by the policy update can be found.

Specifically, VendorPanel Marketplace is a fast-growing database of tens of thousands of ABN-verified suppliers, which uses geolocation and other technologies to help users engage with SMEs and regional businesses. Clients have access to a wide range of suppliers covering a wide range of products and services.

Users, including local Councils, have reported that up to 84% of direct-to-market spend goes to local and regional suppliers when using Marketplace. It’s one reason why over 50% of NSW Councils are now VendorPanel clients. Check out an interactive map that shows them here.

To learn how procurement software like VendorPanel can help you manage sourcing from local contractors, SMEs and even social enterprises, book a time to talk with me here.