19 March 2021 

The region’s peak business advocacy organisation, Business Illawarra, is encouraging local businesses to participate in a consultation process designed to simplify the process of selling goods and services to the NSW Government.

“Government contracts are a vital source of revenue for small and medium business across the Illawarra, particularly as we emerge from the economic turbulence of COVID-19. But consistent feedback from our members is that the process of supplying to government can be complex, challenging to navigate and often quite opaque,” said the Executive Director of Business Illawarra, Mr Adam Zarth.

“Small and medium enterprise, which is any business with fewer than 199 staff, makes up the vast majority of Illawarra businesses – 98 percent in Wollongong alone – and forms the backbone of our regional economy.”

“But doing business with government can be fraught with challenges, not least of which is a perceived lack of clarity on tender requirements and transparency of decision-making.”

“In addition, these businesses have limited resources and commonly complain about complex administrative and legal requirements that hamper them when competing with larger, better resourced, rivals. The data indicates small businesses spend up to one third of their time dealing with administrative tasks such as government tenders. This results in significant productivity loss for the business and the broader economy.”

“Small and medium enterprises are often specialised suppliers and can represent a very competitive value for money proposition on specific projects. It is important that the processes and policies for Government procurement do not act as a barrier to entry to these businesses. The economic benefits of securing the right supplier for a particular project cannot be underestimated”.

““The Government’s consultation process is a good opportunity for local businesses to provide input on the reform of Government procurement to ensure it remains fit for purpose and enables small, medium and regional businesses to secure Government work. I encourage all eligible businesses to contribute to the consultation process before the deadline of 31 March 2021,” said Mr Zarth.

Submissions can be made via the NSW Government’s consultation page available via this link.


Comments from Business Illawarra members

Mr Michael McKeogh, General Manager of Fibre Optics Design & Construct Smart Solutions, says: “The complex contractual requirements are too complex for smaller operators. Contracts are in legal speak and up to 300 pages long and the requirements relating to retentions are unrealistic. Smaller operators must bear huge financial risk as payment is delayed until the principal contractor has received sign off for their entire project, not the sub-contractors works – this can sometimes be years after the sub-contractor completes their work. This is particularly difficult when the practice of ongoing variations (additional work) doesn't allow the original contract to be signed off as complete.”

Mr Daniel Rowan, Managing Director of Internetrix, and representative of Illawarra small business on the NSW Government’s new Small Business Reference Group says: “It is often difficult for suppliers to understand exactly what goods or services a Government buyer is seeking simply based on tender documentation. NSW Government procurement would benefit from greater transparency and this would ideally extend to the criteria agencies use to inform decisions on a preferred bid. Trade shows, which are a common feature of Federal Government procurement processes, may be a useful mechanism to improve the interface between buyer and supplier. The insurance requirements are also disproportionate for smaller businesses and there is need to consider reforms to introduce downward pressure on premiums.”