Regional businesses have unique challenges. I’ve worked with many regional businesses over the years, and…
Queensland Small Businesses, Now You Can Put a Figure on Being the Local Supplier
In September 2017, the Queensland Government’s new (and somewhat controversial) Procurement Policy came into effect.
Full implementation won’t happen until March 2018, which gives just a short time for that State’s Small Businesses, particularly those in regional areas, to get themselves ready.
Why is this good news?
Without getting into the free trade and economic policy aspects of the Policy, the advantage for regional, rural and remote businesses is in the new Local Benefits Test. Under the new procurement policy, every significant procurement opportunity must include a Local Benefits Test.
How does a Local Benefits Test work?
Once you have prepared your Tender and submitted it (on time of course!) a panel of experts will read and evaluate it against some pre-determined criteria that they think are important for the project’s success. Price will certainly be one of these criteria, but there will usually be others as well, such as those shown in the diagram below:
Under the new Policy, there will be a new evaluation criteria added; the Local Benefits Test. And the Local Benefits weighting can be up to 30%. That is an enormous advantage for local suppliers.
This means that a smaller, local supplier could win a project against a larger, less expensive and more experienced competitor.
So, what exactly is a Local Benefit?
Each procurement opportunity will be different, and therefore the possible local benefits will be different as well. Some of the things that would be taken into account when selecting the winning tender would be:
- Is the workforce that will work on the project local?
- Will the project provide local training and apprenticeship opportunities?
- Will the tenderer use other local suppliers as contractors and sub-contractors?
But wait, there’s more …
Apart from the Local Benefits Test, there are two additional sections of the new Queensland Procurement Policy that give encouragement to regional suppliers:
- For each procurement opportunity, at least one regional supplier must be invited to tender (where possible).
- Government Agencies can make purchases outside common-use supply agreements for regional and remote Queensland. Common-use supplier agreements are a single company supplies all Government Agencies with a product or service. So, under this clause, an agency can simply request quotes from local suppliers.
How do you prepare for the changes?
This article covers just one small aspect of the new Queensland Procurement Policy, and there are several other provisions that you can use to your advantage. However, to make the most of the Local Benefits Test, you will need to work on your ‘story’. Many Small Business owners find this difficult at first, but learning how to do this well is going to be extremely valuable to you.
Give some deep and considered thought to what benefits your company would bring to the local area if you were the successful tenderer. Here are some questions to get you started:
- Is your workforce made up of locals, not Fly-In, Fly-Outs (FIFOs)?
- How many additional jobs would you create?
- Would you employ young workers who may otherwise be unemployed or leave the area?
- Is there an opportunity for you to take on an apprentice?
- Would you purchase materials, accommodation, etc. from other local businesses?
- Does your company support local organisations such as a school, a footy club, etc.?
I will write more on this subject as the March 2018 final implementation deadline draws near. In the meantime, though, if you’re a Queensland Small Business, start preparing to take advantage of this opportunity to create value from your regional status.
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