‘Value for money is get out of jail free card for shafting local manufacturers’, says Australian...

Paul Snell is managing editor at Supply Management
posted by Paul Snell
16 July 2014

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16 July 2014 | Paul Snell

An Australian senator has attacked the government for failing to award a contract for boots for the Australian Defence Forces to a domestic firm.

Independent senator for South Australia Nick Xenophon, along with Democratic Labour Party senator for Victoria John Madigan, are calling for the tender to be re-opened and for a complete overhaul of procurement rules to boost local manufacturers.

According to Xenophon, the Defence Materiel Organisation (DMO) last week informed Neville Hayward, CEO of Rossi Boots, his company had missed out on the contract under ‘value for money' criteria.

“This 'value for money' excuse is the ‘get out of jail free’ card for bureaucrats in shafting local manufacturers and Aussie jobs,” said Xenophon. “Incredibly, the DMO under current government rules is precluded from considering the massive multiplier effect to the local economy of having these boots made in Australia.”

Madigan added: “This is a body blow for this great Australian company, its workers and the local community. This tender process is totally flawed and doesn’t compare apples with apples. What better 'value for money' can you get when Australians have gainful employment and a sense of self worth?”

In response to questions on the issue in the senate, defence minister David Johnston said there had been 10 bidders for three different types of boots, which was a “routine procurement” where there was no mandated requirement for Australian-made content. Rossi was not successful - “in other words they were considered too expensive,” he added.

The Department of Defence told SM the contract for the fawn-coloured safety boot had been awarded to Amare Safety, an Australian firm who sources the boot manufactured in Indonesia. No contract for the black safety boot was awarded, because none of the bids represetned value for money. Negotiations for the fireman's boot remain ongoing.

The findings of a senate inquiry established to examine government procurement are expected to be published this week.

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