4 Key Changes to NSW Procurement Coming Soon

Background

Back in October 2023, the NSW government announced an enquiry into state procurement practises off the concerning finding that thousands of NSW jobs would have been created had state manufacturing contracts been awarded to local suppliers rather than out-of-state and international vendors. The aim of this enquiry was to assess how procurement practises could be more transparent, take better consideration of local social, economic and labour market outcomes, increase skills and training. The state's intention is to promote local jobs and strengthen NSW manufacturing. 

As of September 3, 2024 the Minns government announced sweeping reform to support local industry and govern procurement spend. 

Key Changes

1. Prohibitions on Local Content Lifted: NSW government agencies can now seek and consider the impact of local employment and growth opportunities during the procurement process.
2. Out-of-State Suppliers Must be Justified: In what is being called the "If not, Why not" rule, NSW government agencies must justify why they awarded contracts valued more than $7.5 million to out-of-state suppliers.
3. Reframing Value: When considering who to award the contract to, the NSW government is encouraging a broader definition of 'value for money' to also consider employment opportunities and economic outcomes, rather than the cheapest option. 
4. Establishing the Jobs First Commission: An agency will be assembled to ensure implementation and enforcement of local content measures, including job creation, ethical supply chains, and small business.

A Big Year for Local Manufacturing Investment

The state hasn't waited for the framework to be announced to commit to local manufacturing. In the last year, multiple new initiatives have been announced, including:

•  The Advanced Manufacturing Research Facility (AMRF) in Bradfield City Centre looks to foster innovation through industry, research, and education
•  the commitment of $275 million in grants to fund the Net Zero manufacturing initiative
• the launch of the Manufacturing for Schools program which will build NSW public schools in factories to lessen disruption to education, cut costs, speed-up construction and improve sustainable outcome

Looking Forward

The NSW Government spent $42 billion on goods and services in the last year. By focussing on local economic outcomes during procurement processes, government expenditure won't just directly be supporting local businesses, it will also be giving weight to businesses that can demonstrate value to local jobs, skills enablement and improving rural outcomes.