Government procurement should not be about ‘price’. Instead it should be about ‘value’. Both Federal and State Government should consider the total economic benefit of all significant procurements to the local economy. Officials need to assess and appreciate the value to the economy of local employment, local investment and local supply chain activity that flows from the procurement of products and services by Governments. Officials also need to consider quality when considering the value.
What needs to be done:
The Federal Government must ensure government procurement officers conduct procurement in accordance with the full intent of the new Commonwealth procurement rules negotiated by NXT in December 2016 and which came into effect on 01 March 2017. Those rules require officials to:
- ensure applicable Australian Standards are mandated in all procurements
- ensure that the procurement is carried out considering relevant regulations and/or regulatory frameworks, including but not limited to tenderers’ practices regarding a) labour regulations, including ethical employment practices; b) occupational, health and safety; and c) environmental impacts.
- consider the economic benefit for all procurements above $4 million dollars
Compliance with the new rules must be made mandatory for any Federal funding granted to the States.