5.1 Competition is a key element of the Australian Government’s procurement framework.
5.2 Participation in procurement imposes costs on relevant entities and potential suppliers. Those costs should be considered when designing a process that is commensurate with the scale, scope and risk of the proposed procurement.
5.3 Subject to these CPRs, potential suppliers to government must be treated equitably based on their commercial, legal, technical and financial abilities.
Consideration of Australian businesses
5.4 For procurements with an expected value at or above $10,000 and below the relevant procurement threshold, excluding procurements from a standing offer, non-corporate Commonwealth entities must invite only Australian businesses to make submissions.
- Where relevant, the requirements under the Indigenous Procurement Policy must first be satisfied, before an Australian business is approached.
- If there are no submissions, or no submissions represent value for money, the procuring entity may undertake a procurement using a relevant procurement method.
- An official responsible for a procurement may determine that approaching an Australian business, or Australian businesses is not appropriate for the procurement and that paragraph 5.4 does not apply. The basis for this decision must be documented.
5.5 For procurements with an expected value below $125,000 from the Management Advisory Services Panel, the People Panel, or any standing offer managed by the Digital Transformation Agency9 (DTA), non-corporate Commonwealth entities must invite only Small and Medium Enterprises (SMEs) on the relevant standing offer to make submissions.
- With respect to standing offers managed by the DTA, where relevant, the requirements under the Indigenous Procurement Policy must first be satisfied, before an SME is approached.
- If there are no submissions, no submissions represent value for money, or the relevant standing offer does not include an SME, the procuring entity may invite other suppliers on the relevant standing offer to make submissions.
- An official responsible for a procurement may determine that approaching an SME, or SMEs, is not appropriate for the procurement and that paragraph 5.5 does not apply. The basis for this decision must be documented.
Small and Medium Enterprises
5.6 To ensure that SMEs can engage in fair competition for Australian Government business, officials should apply procurement practices that do not unfairly discriminate against SMEs and provide appropriate opportunities for SMEs to compete. Officials should consider, in the context of value for money:
- the benefits of doing business with competitive SMEs when specifying requirements and evaluating value for money;
- barriers to entry, such as costly preparation of submissions, that may prevent SMEs from competing;
- SMEs’ capabilities and their commitment to local or regional markets; and
- the potential benefits of having a larger, more competitive supplier base, including the disaggregation of large projects into smaller packages, where appropriate, that maximise competition.
5.6 The Australian Government is committed to non-corporate Commonwealth entities procuring at least 25 per cent of contracts by value from SMEs, for contracts with a value of up to $1 billion.
5.7 In addition, the Government has a target of non-corporate Commonwealth entities procuring 40 per cent of contracts, by value from SMEs, for contracts with a value of up to $20 million.
5.8 The Australian Government recognises the importance of paying suppliers on time, particularly SMEs. Non-corporate Commonwealth entities must make all payments to suppliers within the maximum payment terms, following the acknowledgement of the satisfactory delivery of goods or services and the receipt of a correctly rendered invoice.10
9 For DTA standing offers refer to https://www.dta.gov.au/our-initiatives/buyict
10 The Commonwealth’s payment terms are set out in the government’s Supplier Pay On-Time or Pay Interest Policy, available at www.finance.gov.au/resource-management-guide-417.
