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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2016-09-21 Daily Xml
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Procurement Reform Strategy

The Hon. J.M. RANKINE (Wright) (14:18): Thank you sir. My question is to the Minister for Small Business. Can the minister explain how the procurement reform strategy is supporting small business in South Australia?

The Hon. M.L.J. HAMILTON-SMITH (Waite—Minister for Investment and Trade, Minister for Small Business, Minister for Defence Industries, Minister for Veterans' Affairs) (14:18): I thank the member for Wright for this important question, because the government has listened to the needs of small business by implementing a major procurement reform strategy aimed at—

Mr Pisoni interjecting:

The SPEAKER: The member for Unley is called to order.

The Hon. M.L.J. HAMILTON-SMITH: If they have something to contribute on small business, we would like to hear it, Mr Speaker, but there is silence. The government is undertaking a major procurement reform strategy aimed at supporting small local businesses by modelling best procurement practice and by being a better customer. The reform strategy will:

reduce red tape and adopt a less complex, more agile procurement framework;

increase the simple procurement threshold to $550,000 and simplify the market approach process;

increase the standardisation of procurement practices and documents across government;

use simple, plain English invitation and contract documents that are easy for both public authorities and suppliers to use and understand; and

ensure public authorities consult with the Office of the Industry Advocate to facilitate the government's industry participation policy requirements.

For small business suppliers bidding for government works, these reforms deliver the following benefits:

the government will be held to account;

faster procurement decision-making and reduced costs will apply;

greater opportunities will exist to win work;

improved buyer behaviour and a better understanding of the needs of suppliers will apply;

a reinforced commitment to working with local suppliers will be in place; and

we will be using smarter procurement to achieve greater efficiencies.

The reform strategies will help make the government a better customer by adopting the Premier's Better Customer Charter for Business throughout the procurement process. The charter reaffirms the government's commitment to supporting suppliers who do business with government, and outlines what current and potential suppliers can expect when they bid for goods and services procurement opportunities.

There have also been significant changes to the liability requirements of government contracts which present a significant barrier for small business. The new requirements mean that the contract does not require the supplier to provide indemnities, allows the selection of a default liability gap between one and five times the value of the contract, and does not require the state to be named on insurance policies or to be provided with a copy of an insurance certificate. For low to medium-risk procurements, the new standard goods and services contract also reflects the level of public liability insurance to be set at a minimum level that can be purchased, which is $1 million.

The procurement process has been significantly simplified by procurements up to and including $550,000, with public authorities now able to seek a minimum of one quote up to $33,000, a minimum of three written quotes to be sought from $33,000 to $220,000, and a minimum of five written quotes to be sought from $220,000 to $550,000. There is also a reduction in the value of which forward procurement plans for procurement will be published to $220,000, down from $550,000.

The government is building commercial capability and acumen by providing training to public authorities in order to better understand the needs of suppliers and the business environment. Some public authority procurement governance committees will also include at least one external commercial advisory representative with relative experience. Finally, agencies will be accountable for more productive and efficient procurement through agreed benchmarks to be monitored through regular reporting agencies. In all of this, the government is doing what it should do, which is to encourage small business to thrive, grow and employ.

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