A public sector procurement overhaul by the New South Wales government intended to make it easier for small-to-medium enterprises to bid for state tenders has come into effect with the state government pushing hard to widen its purchasing options.

Under the new arrangement, which started on 1st July 2014, government agencies are now required to seek at least one quote from a small-to-medium enterprise for contracts worth up to $1 million.

The changes affect the government’s supplier prequalification scheme, which are intended to give smaller businesses cheaper and easier access to bid for more than one billion dollars of government work annually.

The scope of work available to SMEs now stretches across the entire state government, and includes building and construction, ICT and other professional services.

The procurement reforms are the latest in a long and steady stream of changes since the election of the Coalition government in March 2011 that aim to undo highly centralised and often cumbersome and expensive bidding requirements that favoured larger companies and had raised the ire of smaller suppliers who felt locked out.

At the same time agencies have been under pressure to reduce the administrative overheads of making relatively simple purchases to make doing government business cheaper for both buyer and supplier.

Minister for Finance and Services, Dominic Perrottet said the recent procurement reforms provided more opportunities for small-to-medium businesses in rural and regional areas.

A key irritant in spending that has been aimed at regional areas has been that despite the allocation of funding, businesses which employed people in those areas were often locked out of contracts put up for grabs.

Mr Perrottet stressed that the state government was intent on pushing through reforms that will make it easier for businesses in regional NSW to secure government work.

Another benefit that Mr Perrottet detailed was the new policy’s effect on locally-based small businesses, saying that government agencies located in non-metropolitan areas can now purchase goods and services up to $5,000 (including GST) directly from local suppliers.

A big advantage in that reform for small businesses is that state agencies can now bypass existing whole-of-government contracts.

“Not only does this help make it simpler and quicker for agencies to procure goods and services, but it also means that they are able to support local businesses in the communities they reside,” Mr Perrottet said.

He added that small businesses are the “backbone of a sound and steady economy”, and that it is “essential that governments do all they can to assist and support local enterprise”.

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