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20 February 2014 | Will Green
New procurement rules in South Australia aim to boost local jobs and economic growth.
Tom Kenyon, small business minister in the Government of South Australia, announced new measures giving greater weight to employment in the evaluation process for government tenders.
Kenyon said: “An employment contribution test will apply based on a simple set of questions to determine if the goods or services are available locally, and if so, the number of local jobs that will be generated by the contracts.
“This means local businesses employing local people will be in a stronger position to win more of nearly AUS $4 billion (£2.2 billion) spent annually on state government contracts.”
He added: “This is a major shake-up of procurement policy.”
The changes will apply to all state government contracts above AUS $22,000 (£11,850), while for higher value contracts in key sectors the weighting applied to issues around local employment will double to 10 per cent.
Kenyon said the changes followed a review by Deloitte Access Economics that recommended procurement policy should promote employment, investment and the use of local suppliers.
The review also highlighted heavy and civil engineering construction; professional, scientific and technical services; non residential building and electrical equipment manufacturing as areas where procurement could deliver more value.
“Until recently most procurement evaluation guidelines have not even considered employment and investment outcomes,” said Kenyon. “This must and will change.”
The latest reforms build on changes already announced, which include establishing a single pre-qualification process across all government agencies, scrapping pre-qualification fees in the construction sector and reducing insurance compliance costs for small businesses.