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Govt launches inquiry into procurement changes

Govt launches inquiry into procurement changes

Says changes are designed to broaden the definition of ‘value-for-money’

An inquiry into the new Commonwealth procurement rules has been launched by the Joint Select Committee on Government Procurement.

As outlined on 30 November last year, the changes may give some local IT partners reason to pay more attention to where their products and services are sourced.

The changes come after independent South Australian Senator, Nick Xenophon, struck a deal late on 29 November 2016 with the Coalition government to give local businesses an advantage when competing for public projects.

Under the proposed new rules, bidders on government projects worth more than $4 million must show how they are contributing to local employment and growing local skills – an Australian first, according to Xenophon.

Additionally, companies competing for government work will need to demonstrate how much locally-produced material they expect to source, while making sure that the materials used comply with Australian standards. They will also have to provide the whole-of-life cost of a project.

Further, the new rules mean that the regulatory framework involving labour regulations, including ethical employment practices, occupational health and safety, and environmental impacts must be considered in any procurement.

The committee is expected to examine the changes to the Commonwealth Procurement rules, which come into effect on 1 March 2017.

Xenophon said the Commonwealth Government procurement is currently worth more than $59 billion annually and it is important that Australian businesses have an increased opportunity to benefit from procurement decisions.

“These changes are designed to broaden the definition of ‘value-for-money’ to ensure that social and economic benefits, including local jobs, are taken into consideration when procurement decisions are being made,” Xenophon said.

“It is crucial that these new clauses are implemented effectively. To that effect the committee wants to hear from a wide range of stakeholders including government departments, academics and experts in the field as well as community groups and relevant business operators.”

Submissions to the inquiry close on 31 March 2017.

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