Government contracts ‘in crowd’ keeps small business in dark

Government figures from 2021–22 revealed SMEs won $24.9 billion – less than a third – of the $80.8 billion in contracts awarded.

This was despite winning more than half – 55 per cent – of contracts by volume.

However, ASBFEO said many small businesses believed barriers to contracts remained.

“Stakeholders raised concerns about the awareness of the changes within government departments, and levels of education and training provided to procuring officers,” the paper said.

“While the changes were expected to increase SME procurement, our consultations suggest a focus remains on large businesses and familiar counterparties. Instead, SMEs are encouraged to participate in supply chains with large businesses.”

Mr Billson said the use of panels to award contracts was a particular source of frustration.

“Panels are a short list of providers that department can draw from to have work carried out up to a particular value,” he said. “Yet being on a panel does not guarantee work. Many small businesses have told us how they have been on panels for years and never been approached for a request to quote.”

“Small businesses also point to the high cost and investment of time required to tender, and lack of consideration of the opportunity cost by agencies.

“The provision of limited or no feedback when a tender is unsuccessful is also a source of bewilderment and vexation.”

There was also a requirement for “expensive insurances” just for the chance to tender, he said, with no guarantee of eventual work.

The deadline for submissions to the ASBFEO inquiry has been extended to 15 September and Mr Billson’s report will be handed to government in December.