This Direction deals with procurement of goods and services by or for a government agency within the meaning of the Public Works and Procurement Act 1912 (as amended), including the procurement of construction and infrastructure.

The Procurement Board recognises that agencies are improving access  for small to medium enterprises (SMEs) to government goods and services procurement in accordance with the Government’s SME Procurement Policy Framework. One goal of this Framework is to increase direct opportunities for SMEs to gain government business.

Prequalification schemes are an important way for many SMEs to be selected to supply to Government agencies. Under this Direction, where an agency is required to seek more than one written quotation for the supply of goods or services of a type covered by any of the following prequalification schemes and valued up to $1 million, the agency must make all reasonable efforts to obtain at least one written quotation from a prequalified supplier, which meets the definition of a SME business:

• Prequalification Scheme for Construction Consultant Services
• Prequalification Scheme for Construction Contractors
• ICT Services Scheme
• Contingent Workforce Scheme (while quotations are not required under this Scheme, agencies are encouraged to seek one or more CVs from a SME)
• Performance and Management Services Scheme.

As a matter of good practice, agencies are encouraged to apply the principle of this Direction to all procurement sourcing activities for work valued up to $1 million, where two or more possible suppliers are invited to submit quotations.

Agencies are not obliged to apply this Direction in the exceptional circumstances, where owing to the nature of the service being purchased, there is no reasonable prospect of a SME business feasibly delivering a competitive quotation. If this appears to be the case, agency buyers should consider whether it is feasible to break up the procurement so that SMEs are capable of delivering some part of the procurement. Note that ‘order splitting’ with the intention of avoiding upper procurement threshold levels is inconsistent with the objectives of the procurement system and is prohibited under the Procurement Policy Framework.

What is a SME?

The Board Direction applies the definition of a SME contained within the NSW Government Procurement: Small and Medium Enterprises Policy Framework, which defines a SME as a small and medium enterprise from NSW, other states or territories of Australia and New Zealand, with up to 200 full-time equivalent employees.