Public procurement framework to support MSMEs in Australia

Australia supports MSMEs in public procurement through several provisions embedded in its national policy framework. These provisions – put in place by the Department of Finance – aimed to facilitate SMEs to access public contracts, ensuring a level playing field for all economic operators, and accessing a better range of solutions and a diversity of goods and services:

  • The Commonwealth Procurement Rules (CPRs) advocates fair procurement practices enabling SMEs the opportunities to compete for jobs. The CPRs also include the Australian Government’s commitment to sourcing at least 10% of procurement by value from SMEs and allow direct procurement from SMEs with at least 50% indigenous ownership, so long as value for money is achieved.
  • The Australian Government’s payment policies provide that payments cards (e.g. credit cards) are the preferred method to pay suppliers for amounts valued below AUD 10 000, and require a maximum payment term of 30 days for contracts valued up to AUD 1 million.

The Commonwealth Contracting Suite (CCS) provides standardised procurement documentation for procurements under AUD 200 000. The CCS can also be used for low-risk contracts valued up to AUD 1 million. 

Several guidance materials have been prepared by the Department of Finance to support implementation of the policies to promote SMEs in public procurement. They are actively communicated to different stakeholders including procuring entities and suppliers through diverse means – including the Department’s website, newsletter and public blog. Furthermore, training for public procurement officials focuses on engagement with suppliers, including applying the appropriate procurement practice that does not unfairly discriminate against SMEs. In addition,  the Australian Government also participates in relevant trade shows and hosts supplier events, as appropriate, to develop the capabilities of suppliers.

Furthermore, the Australian Industry Participation (AIP) National Framework, applicable to large Commonwealth tenders (of AUD 20 million or more), requires successful tenderers or panelists to prepare and implement AIP Plans. An AIP Plan promotes the benefits of looking at Australian SMEs as potential suppliers rather than solely relying on established supply chains when buying goods and services for the project.