A key objective of the NSW Government is to improve procurement outcomes through enhanced competition by facilitating access to NSW Government procurement business by the private sector, especially by small and medium enterprises (SMEs) and regionally-based enterprises.

Government procurement that improves competition within goods and services markets leads to greater efficiency and encourages innovation within those markets. Greater efficiency produces tangible outcomes such as lower prices, improved quality in products, greater innovation and improved sustainability of markets. Competition in the context of government procurement:

• Encourages new entrants to apply for government work and expands the number of prospective suppliers where possible
• Improves whole of government procurement outcomes while encouraging competitive markets for good or service
• Ensures government can be flexible, agile and adaptive as service delivery priorities change
• Promotes innovative market solutions to government service delivery objectives.

As such, all agencies must act in a manner which promotes these principles. Promotion of competition includes price, product quality and service.

Regardless of the quality or outcomes being achieved under existing procurement arrangements, unquestioningly accepting the status quo may limit competition.

In accordance with this direction, category management plans developed by Category Management Working Groups established by the Board must address:

• the nature of the market(s) in which the goods or services are proposed to be sourced, and the market conditions prevailing at the time of planning procurement activities;
• how the size, nature and scope of a category or contract could impact on competition;
• whether or not the size, nature and scope of a category or contract is justified having regard to the impact on value for money;
• what opportunities exist for innovation to redefine the business need; and
• both the short and long term impacts on competition. 

In applying this Direction, agencies should apply the procurement practices set out in the accompanying Guidance Note. All references to agencies in this Direction and the Guidance Note also apply to category plans.

Board Direction 2012-06 is withdrawn from 31 March 2013 as it has been incorporated into this Direction. This Direction applies from 31 March 2013 until it is revoked.

This Board Direction was withdrawn from 1 July 2019. Guidance on facilitating competition in government procurement is now available on ProcurePoint.