The Queensland Government has introduced a local benefits test as part of it's new procurement policy which came into effect on 1 September 2017. Local suppliers, especially those in remote and regional areas, could be the big winners in Queensland Government procurement opportunities.
The new policy requires that a local benefits test be undertaken as part of the value for money assessments for all significant procurements. The test requires a weighting in the evaluation criteria of up to 30% to local benefits. The local benefits policy provides some guidelines for application of the local benefits weighting by category as summarised in the table below:
Recommended Local benefits weighting
|Building and Construction||20-30%|
There is however no minimum mandatory weighting. Queensland Government Agencies have the flexibility to apply a weighting as they deem appropriate. Agencies can choose to not apply the test in situations where it is not appropriate to do. In addition the determination of what constitutes a significant procurement is up to the agency based on the level of expenditure and/or degree of business risk.
The local benefits test policy provides a hypothetical example of how the local benefits test could be applied relative to other evaluation criteria as re-produced below.
|Supplier experience and capability||20%|
As can be seen from this hypothetical example it would be a possible for a local supplier with less experience and a higher price to win a contract over a rival supplier who is not local.
Under the policy local benefits may include:
- Engagement of contractors who employ a local workforce
- Training the local workforce and providing local apprenticeship opportunities
- Use of local sub-contractors and suppliers in the supply chain
A local supplier is defined in the policy as a supplier of goods or services that maintains a workforce whose usual place of residency (where they normally live, sleep and eat) is located within a 125 kilometre radius of where the good or service is to be supplied.
To make the most of this policy we suggest that local suppliers and sub-contractors first make themselves aware of significant procurement opportunities which may require their goods and services in their local area. You can do this by registering with Qtenders and subscribing to Australian Tenders which will give you not only State Government but Local Government opportunities as well.
Once you have identified a tender which requires your goods and services and has adopted the local benefits test you then have to decide whether to tender directly as the head contractor or as a sub-contractor or supplier. If your goods and services are not a significant component of the tender (more than 50%) or you have limited experience in tendering we recommend proceeding as sub-contractor or a supplier.
As a sub-contractor or a supplier you will need to identify who is likely to tender for the project as the main contractor to offer your goods or services through them. You can do this by looking at who has tendered or been awarded contracts for similar tenders in past. In addition we recommend attending any site visit or briefing session and networking as much as possible.