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Government can’t drive ACT economy without both hands on procurement levers

Government can’t drive ACT economy without both hands on procurement levers

Government procurement has the potential to contribute to jurisdictional economies through two distinct levers – savings and local investment.

The savings are achieved in several ways.

First of all, procurement recognises the capacity for private sector specialists to deliver services more efficiently and at a lower cost than a government could do itself.

For this reason, as we strive to return to the ACT Budget to surplus, it has been argued by organisations such as the Canberra Business Chamber, that the ACT Government should be further utilising private sector expertise and innovation to improve delivery of key services.

Procurement also provides a process through which governments can assess and choose the company or companies that provide best value for money for a defined job.

The second lever through which procurement can bolster the economy is by boosting the local private sector. Businesses that win government contracts are likely to grow and employ. This leads to more income for government coffers through higher tax payments, increased employment levels, more consumer spending and even population growth. It filters throughout the local economy in a positive way.

Unfortunately, here in the ACT, the Labor Government is missing the opportunity to use these procurement levers to the best effect to help our economy improve.

Anecdotally, Canberra Region businesses have talked for many years about the difficulty they face in winning ACT Government contracts.

The Canberra Business Chamber has even convened workshops with local businesses and ACT Government representatives to try and resolve this impasse. At these workshops, Canberra businesses have talked about how their services are highly sought by other jurisdictions and even around the globe, but they have rarely been successful in securing an ACT Government contract. Whilst ACT Government officials have spoken of their desire to ensure Canberra companies get work locally, their statements are not always reflected in outcomes.

This sentiment was clearly evidenced in a recent procurement process undertaken by the ACT Education Directorate. A tender was held to renew the contracts for public school cleaning services.

Up to this tender round, 23 Canberra businesses shared the work of keeping our public schools spic and span. Following the renewal process, the contract was awarded to four companies – just one of them an ACT firm.

The impact of this decision is still to be fully realised, but it will most definitely affect local employment. The majority of businesses who missed out on a contract are already scaling back as a result.

For one family-owned business, which has been cleaning ACT schools for over 12 years and received glowing reports in all audits undertaken while it held the contract, losing this work has forced it to lay off its entire staff.

While the ACT Government may argue this decision is based around the pursuit of savings, it has definitely come at the expense of local investment.

The savings argument when it comes to procurement is also harder for the ACT Government than its counterparts around the country, due to its controversial MoU with UnionsACT that makes input from this non-government entity mandatory before any procurement contract can be awarded.

A government procurement process should have sufficient checks, balances and transparency to enable assessment of bidders’ viability and commitment to meet all legislative requirements, including workplace health and safety and industrial relations responsibilities. Involvement of a third-party with its own agenda threatens the neutrality of the process and the ability of a government to shift the procurement levers as necessary.

Participation of UnionsACT in procurement decision-making actually has the potential to push costs up by locking out those best placed to efficiently provide the service, without the transparency of understanding why a company might be rejected. It also removed the opportunity for businesses to learn what they might do better, and thus stymies growth, innovation and improvement within the business sector.While the ACT Education tender is now done and dusted and can’t be reversed, the misfortune for the Canberra Region and its economy will be compounded if we don’t strive for an open and fair procurement process that both keeps costs down and contributes positively to our community.

We would hope that Government realises that when there is transparency, openness and collaboration everyone benefits: workers, businesses, community and Government.

Glenn Keys
Canberra Business Chamber Chair
10 October 2017

As published on RiotACT – 10 October 2017

Business Sector Coming of Age in Canberra

Canberra CBR Balloons over Questacon

Canberra celebrated its centenary just a few short years ago – we are now a young and vibrant 104! While we honoured our city’s longevity with a year of events, it is also worth recognising the staying power of many of our local businesses.

It is estimated that one in three new small businesses in Australia fail in their first year of operation, two out of four by the end of the second year, and three out of four by the fifth year.

With these sort of statistics, it can be difficult to believe businesses can reach milestones like 10 years of operation, let alone 20, 30, 40, 50 or even 60 years.

A number of Canberra businesses turn 50 this year, meaning they have been part of the fabric of the ACT for nearly half its life.

One such business is WR Engineering, who marks its 50th year in business in the ACT in 2017. For half a century, WR has been helping Canberrans with their fencing and garage door needs.

WR enjoys a well-deserved reputation for serving every customer with utmost professionalism and integrity. During its 50 years of operation, this local, family owned business has generously supported the Canberra community, charities and sporting teams.

In March, Canberra’s Bean!Roasters was recognised as the best coffee roaster in Australia for the second time running. At the 2017 Australian International Coffee Awards (ACIA), Bean!Roasters took out the title of Champion Australian Roaster.

Three generations of the Sciannimanica family have been producing great coffee in Canberra since 1963. Today the family’s coffee centre in Fyshwick is a multi-purpose coffee house, warehouse and coffee education centre in Fyshwick, which attracts visitors and clients from afar.

The Snowy Hydro Scheme, which played an important role in Canberra’s development, is back on the public’s radar due to Federal Government plans for a major expansion.

Global engineering firm, SMEC, dates its origins back to the early days of the Scheme in 1949. SMEC has joined forces with Surbana Jurong and today has 110 offices in 40 countries throughout Asia, Australasia, the Middle East, Africa and the Americas.

Earlier this year I was lucky enough to be invited to help GHD celebrate its 40 years in Canberra. GHD is one of the world’s leading professional services companies operating in the global markets of water, energy and resources, environment, property and buildings, and transportation. It provides engineering, architecture, environmental and construction services to private and public sector clients.

GHD has over 200 offices across five continents – Australia, Asia, Europe, North and South America – and the Pacific Region.

It is not only commercial businesses demonstrating their permanence in the ACT. Not-for-profit organisations have a long and proud history of helping our community.

Marymead hit the big 50 in 2017. Since 1967, Marymead has been delivering a range of high quality, family support services to children, young people and their families. Its programs and services include child and family counselling, early intervention programs, foster care, post separation support, parent education groups, and family and mental health support programs. Marymead also offers person-centred support services for people with disability and their families.

St Marks National Theological Centre has turned 60. St Mark’s strives to provide a program of high quality university-based theological education, postgraduate studies and research to people throughout Australia and overseas.

Other businesses getting on up there in years, include Carways (47 years), Broadlex Services (43 years), and ACT Steelworks (40 years).

These are just a few of the local organisations who have been with us for decades, and I want to congratulate all the businesses who are proving that sustainability is possible.

I would also like to encourage all businesses, no matter where they are up to in their lifespan, to take a moment to celebrate their achievements, such as a year of operation, and think about how far they have come and where they still want to go.

Robyn Hendry
CEO, Canberra Business Chamber

As published in B2B magazine  – June 2017