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Small and medium enterprises
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What opportunities do you see there are for increasing small to medium enterprise participation in government procurement?
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Comment 1 6 Feb 2012, 11:37 AM
NSW government contract documentation needs to be simplified for smaller scale projects that small to medium enterprises would considering competing for. As these tend to be lower risk/lower value projects, there also needs to be some reconsideration of insurance requirements. E-advertising of tender / contract opportunities is expedient and maximises coverage, but the fact is in regional/rural areas it has not been embraced, and is sometimes not easily accessible due to connectivity issues. A recent e-tendering experience demonstrated that smaller suppliers in my area are still heavily dependent on print advertising to alert them to tender opportunities. E-tendering also has the unfortunate side effect of attracting responses from metro based suppliers who "blanket" respond to all government tenders / contracts without necessarily realising the location of the project . These responses will eventually be winnowed out, but create a workload for staff who must conduct/document the tender evaluation process - this workload wasn't there when direct, local advertising options were used.
Comment 2 6 Feb 2012, 5:41 PM
In an effort to aid the discussion surrounding this question, here's some statistics about NSW Government contract expenditure...
During 2011 the NSW Government awarded 70% of contracts to SMEs (entities with 200 or fewer employees). The remaining 30% of these contracts were awarded to non-SMEs (ie: large entities with 200+ employees).
Non-SME's receive a larger proportion of the NSW Government contract 'pie' in terms of $. The proportions are roughly reversed - that is, non-SME entities get 66% of the aggregate contract value, and SME entities receive the balance at 34%.
Larger entities are awarded higher value contracts (on average $5.2m), smaller more…
Comment 3 8 Feb 2012, 4:25 PM
I am surprised that it's expected an SME would have time to read the 32 page document prior to submitting a response- could a simplified fact sheet be created aimed at sme's.
Additionally it must be said that if the definition of an sme in this context is under 200 staff we are really not focussing the issues of small business in this discussion, and as such what happens to the little guys in this process?
Comment 3.1 10 Feb 2012, 1:28 PM
The 200 employee figure aligns with the Australian Bureau of Statistics approach to categorising SMEs (see http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/1321.0 ) . In European and USA jurisdictions the threshold figure to be considered a SME can be set at 250 or 500 employees. There is no shortage of methods for defining an SME...other approaches include annual turnover or balance sheet thresholds.
To aid discussion of the NSW context, a further breakdown of the statistics above follows. These figures focus on entities with fewer than 200 employees that have been awarded contracts by the NSW Government:
0 to19 employees - awarded 35% of contracts, making up 10% of total value (averaging $708k per contract).
20 to 100 employees - awarded 28% of contracts, making up 20% of total value (averaging $1.636m per contract).
101 to 200 employees - awarded 7% of the contracts, making up 4% of the total value (averaging $1.42m per contract).
Source data as per earlier advice.
