Small and Medium Enterprises (SMEs) are supplying a greater share of goods and services to government, with the latest procurement data showing a 29.1 per cent increase in the value of federal government contracts going to SMEs.
The data also shows that the Government has significantly exceeded its targets when it comes to the proportion of federal government contracts going to small and medium sized businesses.
Our published targets provide that at least 10 per cent of all contracts by value should be sourced from SMEs and 35 per cent of all contracts with a value up to $20 million.
In 2018-19 the data shows that:
- 25.9 per cent of all contracts by value were awarded to SMEs, up from 18.2 per cent the previous year; and
- 41.9 per cent of contracts valued up to $20 million were awarded to SMEs, up from 39.8 per cent the previous year
In 2018-19, Commonwealth agencies awarded 78,150 contracts in total. 41,341 of these contracts, or 53 per cent, were awarded to SMEs, with a total value of $16.7 billion, which is $3.8 billion more than the previous year.
The data for small business engagement (a subset of SMEs) shows that the value of small business contracts has increased by 47 per cent, from $3.3 billion in 2016-17 to $6.3 billion in 2018-19, demonstrating the strength of the Australian small business sector.
This latest report demonstrates the Government’s commitment to provide small and medium sized businesses with better access to federal government procurement opportunities.
In particular, we have:
- simplified and standardised government contracts where possible;
- strengthened integrity controls so that businesses with poor tax records do not benefit from government contracts;
- ensured that officials assess the potential economic benefits to the Australian economy under larger tenders;
- strengthened Indigenous Procurement targets, and
- established a Centre of Procurement Excellence to ensure officials and suppliers share their thinking on how to further improve procurement processes.
We will continue to improve our dealings with suppliers, including by adopting a five day ‘pay on time or pay interest’ standard for e-invoices in 2020.
For further information, please visit the Department of Finance’s Procurement Statistics website at https://www.finance.gov.au/government/procurement/statistics-australian-government-procurement-contracts-.