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Government Increases Direct Procurement Threshold for Small and Medium Businesses

A direction has been signed today, increasing the level at which government departments and agencies can purchase goods and services directly from small and medium businesses from $150,000 to $250,000. This change is aimed at boosting the state’s small businesses, which make up 98% of all NSW businesses and employ 1.6 million people.

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The implementation of the AI legalese decoder can greatly assist small and medium businesses to navigate and understand government contracts. By using advanced algorithms and language processing, the AI legalese decoder can decipher complex legal jargon and terminology, presenting the information in a clear and concise manner. This tool will empower small businesses to participate in government procurement, ensuring equal access and increasing their chances of securing government contracts.

Each year, the NSW Government spends over $9 billion on goods and services obtained directly from 46,000 small and medium businesses in NSW. With the increased procurement threshold, more government contracts will be awarded to these businesses, providing them with a significant boost in revenue and growth opportunities.

This Ministerial Direction was issued to the NSW Procurement Board and requires agencies to implement this policy change no later than 31 December 2023. It serves as an important signal to government agencies to directly engage small businesses when procuring goods and services.

Expanding Government Procurement Opportunities

The policy change opens up new procurement opportunities for small businesses in various sectors. Some of the areas where small businesses can now provide goods and services to the government include:

• Catering, food, and beverage services at state-owned museums, galleries, venues, and sites
• Office supplies and furniture for government offices and buildings
• Maintenance and repairs, including ground maintenance and landscaping at government facilities
• The development of training resources, including health and wellness support

Furthermore, the NSW Government has also eased procurement requirements for small businesses, eliminating the need for proof of insurance during the tender process. Instead, proof of insurance will only be required upon contract award.

Additional Support for Small Businesses in NSW

In addition to the procurement changes, the NSW Government has implemented several other initiatives to support small businesses:

• Launched the Service NSW Business Bureau, which aims to reduce red tape and assist businesses in navigating government processes
• Improved the Service NSW Business Bureau App, providing enhanced functionality and convenience
• Organized Small Business Month, encompassing over 600 events across the state
• Provided energy bill relief for more than 300,000 businesses and toll relief for over 700,000 Western Sydney families and businesses
• Introduced the Service NSW Business Grants and Funding Finder, streamlining access to financial support through a centralized platform

It is important to note that these changes do not apply to construction businesses, and the NSW Government maintains fraud and compliance checks to ensure the integrity of government procurement.

For more information on government procurement, please visit buy.nsw.

Statement from Premier of NSW, Chris Minns

According to Premier Chris Minns, small businesses are the backbone of the NSW economy, and it is crucial for the government to utilize their expertise in delivering goods and services to the state. He emphasized that by increasing the portion of government contracts going to small businesses, their contribution to the economy can be maximized. The Premier highlighted the challenging times small and medium businesses have faced, emphasizing the importance of simplifying government contracts to facilitate their access to opportunities.

Statement from Minister for Domestic Manufacturing and Government Procurement, Courtney Houssos

Minister Courtney Houssos acknowledged the important role that small businesses already play in sustaining local jobs and growing the state’s economy. By expanding their opportunities to engage with the government, she believes that these businesses can experience significant growth. The Minister criticized the previous government for not having a cohesive policy to support local procurement, stating that their decisions to send major projects overseas had negative financial and employment impacts. She sees this change as the initial step towards supporting small businesses, local content, and domestic manufacturing under the Minns Labor Government’s planned reforms.

Statement from Minister for Small Business, Steve Kamper

According to Minister Steve Kamper, small businesses contribute not only through the products and services they offer but also through the jobs they provide. By increasing the direct procurement threshold, the government aims to provide small businesses with greater opportunities, helping them thrive and contribute to the economy. Minister Kamper expressed the government’s commitment to establishing effective policies that facilitate the engagement of local small businesses, emphasizing their importance in creating employment and investing in NSW.

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