Commonwealth changes tender rules to help small businesses

Changes have been made by the Australian Government to procurement rules to assist small and medium enterprises (SMEs) competing for Government contracts. 

The changes, including reduced insurance costs, are designed to remove perceived barriers that may have discouraged some SMEs from participating in certain tenders, particularly where they think the cost of entry is too high.

NSW Small Business Commissioner Chris Lamont said the insurance measure should be considered by all levels of government as the cost of insurance was often a limiting factor for small businesses looking to tender for government work.

Under the changes, insurance will not be required in most circumstances until a contract is awarded.

Other changes include: 

• requiring officials to consider disaggregating major projects into smaller contract opportunities, where unbundling would allow greater competition
• providing faster cash flows through supply chains, by extending the “pay on time” policy to all suppliers 
• allowing the Department of Defence to build local sovereign capabilities by directly purchasing from SMEs, or using tenders that are limited to SMEs, for procurements worth up to $500,000.

Small businesses looking to tender for government work are encouraged to complete the NSW Small Business Commissioner’s Tender Support Program, which provides free online training to help businesses participate in tender processes.

More information on the new procurement rules can be found here.