There are opportunities for competitive local businesses of all sizes, in all sectors of the economy. Unfortunately, many small, medium and regional businesses are not yet taking advantage of these opportunities. We want that to change. 

Government refers to “procurement” in its policies and guidelines. Procurement is a broad label covering:

Everything to do with sourcing goods and services. From identifying present and future needs, market analysis and strategic planning, to value for money assessment, purchasing, contract management and end of contract evaluation or disposal of assets at the end of their useful life.

Local Content Matters

The way governments use their purchasing power can deliver significant economic and social outcomes such as strengthening local industry capability, enhancing competitiveness, encouraging innovation and dissemination of new technologies, attracting further investment, creating local jobs, training local apprentices and trainees.

That’s why The Victorian Chamber supports and advocates for minimum local content and local workforce requirements, such as those in the Local Jobs First Policy, to increase economic activity, and boost local jobs. It’s vital that small, medium and regional businesses are more aware and engaged to help industry plan early and make decisions about future investment and employment opportunities

Selling directly to government

Government departments and agencies approach purchasing the goods and services they need in different ways depending on the size (how much money is allocated), the complexity (the level of intricacy and scope of issues involved) and the location of the purchase (metropolitan, regional or whole-of-state).  

The most common methods are:

• Open competitive processes: The buyer releases a Request for Tender (RFT) or expression of interest (EOI) and any supplier can submit a tender or proposal for consideration. 

• Closed competitive processes: selected suppliers are invited to submit tenders or proposals. These are often selected from a register of pre-qualified suppliers (a list of suppliers who meet certain criteria) or a panel of two or more suppliers who have the required capabilities or suitable products.

• Panels operate over a period of time and can be open or closed:
  Open panels accept new suppliers at a set time or other times during the contract period
  Closed panels are restricted to the suppliers engaged at the start of the contract
  
  Qualified suppliers who meet eligibility criteria can apply to join registers at any time. 
  
  
• Direct sourcing: a supplier is directly approached by the buyer to undertake the work, using pre-qualification and panel arrangements as mentioned above. 
  If you prequalify for a panel or register you can streamline your bids and how you communicate your capability to government buyers

Different types of goods and services also have different rules that apply to these methods such as dictating particular requirements be included in the scope of work or tender documents. For example the Guide to procuring Uniforms and Personal Protective Equipment (PPE) states that where uniforms and PPE government departments want to buy are, or can be, manufactured locally, they need to approach the market asking for locally manufactured goods and can only enter a contract with suppliers that are on the Ethical Supplier Register.

Our next article will cover some of the key decision makers and explain the different rules and guidelines in more detail.

Becoming part of a supply chain

Businesses that don't count government among their direct customers can still benefit from government procurement by becoming a supplier to a larger, tier 1 contractor delivering government projects or services.

Local Jobs First policies that mandate a level of local content or a minimum proportion apprentices and trainees that must be employed on the project, were introduced specifically to improve supply chain opportunities for local small and medium enterprises (SMEs).

There is a huge pipeline of major Jobs First Projects offering many different opportunities to local businesses so there has never been a better time to explore how your business can get involved.

Find out more

Contact the Victorian Chamber team at policy@victorianchamber.com.au for more information. You can also help shape our future advocacy by sharing your experiences of government procurement, local content policies and supplying public projects.