Carnell said government procurement should support small manufacturing firms ©  Thurtell/Getty Images
Carnell said government procurement should support small manufacturing firms © Thurtell/Getty Images

Small business tsar calls for SME procurement panel

15 June 2020

Australia’s small business and family enterprise ombudsman Kate Carnell has called on the federal government to establish a dedicated SME procurement panel to help them win contracts.

Under Carnell’s Covid-19 Recovery Plan government contracts worth up to $10m would be offered through the panel to SMEs before being extended to the wider market.

Membership of the panel would be restricted to firms with a turnover of less than $10m, with a streamlined appointment process.

“The government has a golden opportunity to improve its procurement process to support the creation of jobs in the small business sector,” Carnell said.

“The total number of Commonwealth government contracts awarded to SMEs in 2018-19 was 26%. However 94% of government contracts are valued under $1m with 59% below $80,000.” She said that it was clear that small businesses could have a larger share of that pie but that current government procurement processes gave preference to large businesses.

Carnell said a procurement system that discourages small business participation would fail to secure best value for taxpayers and would also deny SMEs the opportunity to innovate, employ and grow.

She said industry minister Karen Andrews’ commitment to speak with prime minister Scott Morrison about the importance of using government procurement to build Australian tech supply chains was encouraging.

“Minister Andrews is absolutely correct. In fact, we believe this should be extended beyond the tech sector to small businesses more broadly, including manufacturing,” Carnell said.

“Small businesses still face significant barriers when participating in government procurement. It can be a costly exercise and small businesses don’t have the resources to complete overly complex tender documentation.”

Carnell said the challenges of getting onto a panel under the existing system were onerous and small businesses were often overlooked when it came to value for money.

“Just because they might not be able to offer the lowest price, doesn’t mean they are not competitive overall,” she said.

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