What the changes to local content rules and procurement policies mean for you

By Darryl Daisley - July 30, 2018

The WA Government has implemented a number of changes to ensure benefits generated by government projects remain in WA — introducing a range of new procurement hurdles for businesses.

Four recent changes to jobs and procurement policy have made the requirement for local content more explicit and show the State Government’s intent to boost jobs and local economic activity.

So what are the major changes that WA businesses — and those looking to win government work in WA —must know?

1. There are tougher new local content rules

The WA Government has placed a renewed emphasis on local content rules, and is spending about $27 billion a year on local goods, services, housing and works.

The local content quota, in conjunction with the Buy Local Policy, signals a stronger push for using local providers over international providers, in an effort to stimulate the local economy.

The State Government’s Buy Local Policy supports WA businesses by enhancing supply opportunities when bidding for State Government contracts. The policy focuses on providing a reliable and consistent market for local businesses, particularly for small to medium sized organisations and regional businesses.

2. If you want to work with Government, get procurement planning in place

The WA Jobs Act was implemented in 2017 to ensure that local industry receives a full, fair and reasonable opportunity to participate in major public and private sector projects.

The instrument that plays a significant role in this is the Industry Participation Plan (IPP), which requires State Government project proponents to outline their commitments to employing or involving local businesses in all supply opportunities. The IPP should clearly present the proponent’s consideration to the project’s local economic impact.

The WA Government requires project proponents to report on contracting outcomes every six months as well as upon practical completion of the project.

These regulations apply to companies bidding for contracts worth between $20 and $350 million, with even more extensive planning needed for projects worth more than $350 million.

For many SMEs this may be the first time that they have had to address these issues in detail and provide a plan at the time of tendering.

3. It’s not enough to have local workers, you need to buy locally made goods

The Western Australian Industry Participation Strategy (WAIPS) is designed to align with the WA Jobs Act and represents a new era in State Government purchasing for both agencies and industry. WAIPS applies to all State Agencies and all forms of procurement.

In essence, the buying local focus is now supported through mandatory development of Industry Participation Plans and all other mandatory reporting requirements.

The reporting results will ultimately be fed through to WA Parliament for analysis.

4. When it comes to local purchasing, look for an Indigenous supplier

The Aboriginal Procurement Policy, which came in to effect from 1 July 2018, requires government agencies to award contracts to Aboriginal-owned businesses consistent with progressive targets.

The target of one percent in FY 2018/19 will grow to two percent in FY 2019/2020 and three percent in FY 2020.

If you’re a local businesses owner and looking to apply for a government tender, contact Darryl Daisley at Pitcher Partners on 08 9322 2022 to help you understand your reporting requirements.

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