Getting the most out of the new procurement practices

By Jason Eades

October 1, 2015

Tom Burton: I think agencies are required to put there forward their big spends, put the big contracts up earlier, or give notice ahead of the time. So we see some quite good intelligence reside in the system bit it is actually building those relationships (that matter). On the procurement side, are there practices you see within the current, if like in the federal sphere, that could be problematic here as agencies themselves gear up?

Jason Eades: I think it’s often understanding that what they take to market and the size and scale of it sometimes is so big that it’s outside of the reach of most businesses, it doesn’t matter if they’re Aboriginal or not. And there’s been a real effort to try and break some of that down or at least encourage those big bidders to think about what they’re doing in this space. I think Aboriginal businesses are no different. They all want to get in into the supply chain but most of the opportunities are actually not going to be at the tier one level, they’re going to be further down in the chain.

So impressing upon those big businesses that are winning that work, the importance of this policy to the government and making sure that all the accountability measures actually appear in those contracts because that will change behaviour. Again to use another example from Western Australia, the reason why you saw so many Aboriginal businesses form over there, it was a key requirement of all the big resource contracts going to market was that you had to address 10% Aboriginal employment and/or procurement — Aboriginal businesses in your procurement chain. If you couldn’t, that was heavily weighted on those contracts, 10%. If you’re not addressing that, you’re behind all the rest of those that are. So it’s in their interest but it only works when they’re enforced.

Tom: Follow up question. You’ve mentioned the value of diversity in the supply chain, what is that value?

Jason: I think most businesses have been on this journey of diversity within. So finding and making sure that they’re diverse and inclusive in terms of their work force, and that flows right through to supply chains. If you’re not getting the same through there then you’re not getting the best value in that. What research shows is that work places that are more diverse and more inclusive, one are commercially more successful and so the returns to shareholders are a lot higher, but also are more likely to be driving innovation because there’s different thinking and that just mixes up the whole environment really.

As I said earlier, the US has recognised this for a long time. Australia is playing a bit of a catch up if you like, we have some real opportunities to really embrace this and do something quite different and see where it takes Australia. But I think it’s also a way in which we can address Aboriginal employment outcomes, and it’s not a government responsibility in its totality.

It’s not something that the Aboriginal community can solve on its own, but collectively, we have corporates and with other businesses, we actually can help close the gap on employment at least and the flow-on effects from that unto other headline indicators like life expectancy will be huge.

Tom: Thank you Jason for sharing those thoughts. It’s very exciting initiative I think. Everyone is really watching this new program to see how it goes and we’ will be coming back and perhaps talk to you at a latter stage.

Jason: You’re most welcome. It’s early days so let’s hope it drives some change.

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