Does the Commonwealth really award all its contracts to big business?

Author: 
John Sheridan - CIO & CISO

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Those of you who are familiar with my blog, or who have been to a presentation of mine, will know that I am a big fan of using data as an evidence base for policy development and to dispel myths.

One very stubborn myth is that SMEs do not get a ‘fair share’ of the Commonwealth procurement market.

Every year, Finance publishes a range of AusTender statistics which can be found here. With the recent publication of the 2014-15 statistics, I thought it would be timely to again look at SME and small business participation.

So here’s what the AusTender contract reporting data says for 2014-15:

SME Participation

  • By volume, 59% of the 69,236 contracts were awarded to SMEs; and
  • By value, 28% of the $59.4 billion in total contract value was awarded to SMEs.

Small Business Participation

  • By volume, 34% of the 69,236 contracts were awarded to small businesses; and
  • By value, 10% of the $59.4 billion in total contract value was awarded to small businesses.

So as you can see, consistent with previous years, the statistics show that SMEs and small businesses can compete successfully on their own merits in the open and competitive environment of the Commonwealth procurement market.

And a word of caution when comparing AusTender statistics:

  • All procurement contracts valued at or above $10,000 are reported on AusTender;
  • An SME is defined as a business which has less than 200 employees and operates independently of any parent organisation for taxation arrangements;
  • A small enterprise is defined as a business with fewer than 20 employees; and
  • SME statistics are based on direct contracts with the Commonwealth – they do not include sub-contracts.

If you have any comments on AusTender statistics, please let me know either below, or by email at haveyoursay.procurement@finance.gov.au.

Regards

John

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Last updated: 24 January 2018