The South Australian government has responded to the final report of the SA Productivity Commission’s stage one inquiry into government procurement, promising to back local businesses in government tenders.
Treasurer Rob Lucas said the government has begun implementing recommendations by reviewing aggregated contracts to identify where procurements can be broken into smaller contracts.
“These reforms will not only reduce red tape and promote greater understanding of procurement processes, but further support entrepreneurial start-ups and scale-ups by encouraging them to test their ideas and concepts or conduct trials with the government as their first customer,” he said.
Many of the recommendations in the report — which was delivered to Premier Steven Marshall in May — are expected to be implemented by the end of the year.
The government accepted 28 of the recommendations in full, and partially supported the remaining two.
In its first inquiry since being established in October, the commission has been assessing the efficiency and effectiveness of the state’s goods and services procurement. Stage one examined the existing procurement framework and considered insights from other jurisdictions to identify reform options that improve procurement practices to positively impact on local industry.
The inquiry was prompted by concerns from small and medium enterprises about the cost and time involved in tendering for government contracts. Stage one found the government’s capacity to drive the procurement system with “authority, accountability and human resources” to be “very limited”.
“Overall, the commission considers the system is prescriptive, unnecessarily risk-averse, and lacks transparency and guidance in key areas,” the final report said.
According to Lucas, the government will:
- establish a system that allows tenderers to pre-load their business details, simplifying the process of bidding for government tenders,
- ensure at least one local business has the opportunity to submit a tender for procurements between $220,000 and $550,000,
- expand the Office of the Industry Advocate’s Meet the Buyer program to allow better communication between local businesses and government procurement staff, including a meet the buyer forum for start-ups,
- develop a proposal to encourage start-ups and scalable businesses to present innovative solutions where the government can be a customer for new ideas,
- streamline processes to eliminate delays for tenderers,
- improve procurement data to better demonstrate outcomes from expenditure of public monies on goods and services,
- improve guidance for procurement staff on how to incorporate both price and non-price factors — such as local employment, environmental sustainability, social objectives — in determining the overall value to government from the acquisition of goods and services.
As part of the implementation plan, ministers will be able to sign contracts within Cabinet approved funding, removing the requirement for Cabinet to approve contracts, irrespective of value. A revised policy for procurement reporting will be developed, with new reporting requirements proposed to take effect from 1 July 2020.
The State Procurement Board will also develop improved guidance for agencies on industry engagement, in conjunction with agencies and the Independent Commissioner Against Corruption, Bruce Lander.
Stage two of the inquiry will look at capital works and prescribed agencies, such as SA Water and the South Australian Housing Trust. Its final report is due late October.