Support SMEs and regional businesses
- You should make it easy for SMEs to participate in government contracts by simplifying the tender process and reducing red tape.
- You must first consider buying from an SME for many good and services contracts valued up to $3 million.
- You can often buy direct from small and medium businesses for goods and services contracts up to $250,000.
- You must evaluate suppliers’ commitment to working with SMEs as part of tender criteria for goods and services procurements over $3 million.
As a government, we want to increase competition, encourage innovation and create a sustainable NSW economy. We understand this is only possible when small- to medium-sized enterprises and regional businesses participate fully in our state economy.
Consider an SME first
You must first consider buying from an SME or regional business whenever:
- you’re permitted to buy goods or service directly from a supplier based on one quote
- the contract value is under $3 million.
This includes when you’re using a whole-of-government contract or scheme.
SMEs are Australian or New Zealand-based enterprises employing up to 200 people (full-time equivalent). Regional businesses are those outside the metropolitan areas of Sydney, Newcastle and Wollongong.
These requirements don’t apply to construction contracts.
Read the SME and Regional Procurement Policy.
View whole-of-government contracts and schemes.
Buy direct from small and regional businesses
Up to $150,000, you can buy goods and services directly from a regional business. That limit goes up to $250,000 for SMEs.
This includes goods and services covered by a whole-of-government arrangement.
You can also buy goods or services under $10,000 directly from any supplier.
Read more about buying low-value contracts.
Make it easy to do business
SMEs and regional businesses to participate often don’t have the same capacity for administrative work as larger organisations. You can make it easier for them by:
- providing notice of upcoming procurements
- providing pre and post tender briefings
- limiting the length of tender responses
- minimising requirements, such as insurance and technical requirements, wherever possible.
Ask large suppliers to include SMEs
You must try to make sure SMEs take part in goods and services procurements over $3 million. Larger businesses are often selected to deliver higher-value contracts, so we want suppliers who win these contracts to tell us how they’ll use SMEs to help deliver the goods or services.
You must include non-price evaluation criteria of at least 10%, which takes into account how suppliers will support government objectives (economic, ethical, environmental and social). You must also allocate a minimum of 10% to evaluating how the supplier will support SMEs.
You must also require an SME and Local Participation Plan from potential suppliers which outlines how they will include SME and local content as part of the contract.
These requirements don’t apply to construction contracts.
Give SMEs access to opportunities in construction
You can give startups a kickstart through the procurement innovation stream for construction contracts.
You may be able to engage SMEs to do proof-of-concept trials. After a successful trial ends, you can use any procurement method – including direct negotiation – to award a contract, subject to procurement rules.
Read about how this works in Procurement Board Direction PBD 2019-03.