Ombudsman launches inquiry into govt tendering process

Australia's small business ombudsman, Bruce Billson, has launched an inquiry to examine how reforms to commonwealth procurement rules have affected the small business sector.

Mr Billson said many small businesses had told him they felt excluded from the chance to tender for federal government procurement contracts.

“They have low awareness about procurement opportunities unless they are already part of the ‘in-crowd’ through existing relationships with procuring agencies, or previous experience in government procurement,” he said.

Another issue small businesses have raised with Mr Billson is that while winning a government contract could be life-changing, being on a government panel did 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,” he said.

“Small businesses also point to the high cost and investment of time required to tender, and lack of consideration of this opportunity cost by agencies. The provision of limited or no feedback when a tender is unsuccessful is also a source of bewilderment and vexation.” 

Another frustration was the need to have certain kinds of expensive insurances to participate in the tender – without there being a guarantee the business would win the contract and therefore need the insurances.

Submissions due 15 September

In 2021-22 the government and its entities awarded 92,303 contracts with a combined value of $80.8 billion, according to Mr Billson.

It is estimated that small and medium businesses were awarded 55% of those contracts by volume and 31% by value.

“Enabling SMEs to fully compete for government work helps deliver better value, supports innovation and drives stronger Australian-based capability – all worthwhile and important benefits for the taxpayer and our nation,” he said.

If you want to make a submission to the ombudsman's inquiry, the deadline is 15 September.

The final report will be handed to the government in December.

Published: 5/9/2023