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Tuesday, 17 February 1987
Page: 43

(Question No. 4486)

Mr Hodges asked the Minister for Local Government and Administrative Services, upon notice, on 16 September 1986:

(1) Does the Government require (a) government departments and (b) statutory authorities to purchase goods and services from small businesses as defined by the recent EPAC report `Some features of small business and its policy environment'.

(2) What directions has the Government issued for this purpose.

Mr Uren —The answer to the honourable member's question is as follows:

(1) No.

The Bureau of Industry Economics in its recent small business paper `Government Procurement and Small Firms' noted `that information collected in surveys indicates that small firms do not face any significant constraints in supplying to government. Although small firms are less likely to be involved in government work than large firms, in most cases this is simply because they do not deal in, or have the capacity, to produce those goods and services normally required. For those small firms which do apply for Government work, the success rate is quite high.'

I understand that the Small Business Council has made a submission to the Committee of Review on Government High Technology Purchasing Arrangements. The views of small business will be taken into the Government's consideration of this committee's report.

(2) None. Small businesses are eligible to apply for all forms of general industry assistance provided by the Government. Such assistance includes the application of the policy of preference to Australian-made goods and related services in Government purchasing by departments and those authorities not exempt from the policy.

The preference policy provides for the application of a number of measures directed to both large and small businesses interested in supplying government requirements. The directions are set down in Commonwealth Purchasing Circulars issued by my Department.

The directions on preference require the use of unbiased specifications, consideration by purchasing authorities of alternative offers of Australian-made goods and related services, specification of Australian-made materials and services in certain construction-works tenders, use of minimum economic order quantities for Australian conditions, application in tender evaluations of a twenty per cent margin of preference applied to the local material and manufactured value-added content of tenders and, in the evaluation of low value quotations, to the total value of local supplies. There is also discretionary preference consideration by Ministers for tenders valued above $100 000 where a twenty per cent margin of preference is insufficient to award the contract to a higher priced, higher Australian content suitable offer.

The margin of preference is also applied to the New Zealand content of offers in accordance with the Australia/New Zealand Closer Economic Relations Trade Agreement.

As a consequence of the National Preference Agreement recently signed by the Commonwealth and the States these measures have been reinforced.