This direction applies to the procurement of all goods and services, including construction, by a government agency, within the meaning of section 162 of the Public Works and Procurement Act 1912 (the Act).

This direction applies to any procurement required to implement or facilitate clean-up, repairs, rebuilding, remediation and enhancement works, or to supply associated goods or services, arising out of, in relation to or following bushfires occurring in calendar years 2019 and 2020 and to floods occurring from January 2020 to March 2020.

Local business first for bushfire and flood response

When engaging suppliers to conduct bushfire or flood clean-up, repairs, rebuilding or remediation works, or to supply associated goods or services, NSW government agencies must give first preference to an appropriate Local Business based in the local government area (LGA) in which the work is to be conducted.

If no appropriate Local Business can be identified, or if a Local Business cannot complete the work within a reasonable timeframe, then the work may be allocated to another Regional Supplier.

Where no suitable Local Business or Regional Supplier is available, another suitable supplier may be used.

For procurements in areas bordering other States and Territories, agencies may use their discretion in seeking quotes from any suitable supplier.

If an agency is engaging a head contractor to undertake a project or program of works arising out of, in relation to or following the bushfires occurring in calendar years 2019 and 2020 or floods occurring from January 2020 to March 2020, the agency should, wherever possible, contractually require the head contractor to first consider Local Businesses to deliver associated goods or services.

The underlying principles of value for money and probity must be maintained in applying this direction, with engagements subject to appropriate due diligence and adequate supplier performance. Suppliers must demonstrate they have the experience and capability to fulfil the contract and manage relevant risks, including work, health and safety risks.

Definitions

Local Business is defined as a business of any size:

a) with a registered business address in the LGA, or

b) that can demonstrate that it has substantial operations including a local workforce in the LGA

in which the work is to be conducted.

Regional NSW includes all areas within New South Wales, outside the Newcastle, Sydney and Wollongong metropolitan areas. A list of regional LGAs is available on buy.nsw.

Regional Supplier is defined as a business of any size:

a) with a registered business address in Regional NSW, or

b) that can demonstrate it has substantial operations including a local workforce in Regional NSW.

Procurement process

Procurement that is undertaken pursuant to this direction is an exempt procurement for the purposes of Schedule 2 of the PBD-2019-05 Enforceable Procurement Provisions.

PBD-2019-05 Enforceable Procurement Provisions does not apply to procurements required to implement or facilitate clean-up, repairs, rebuilding, remediation and enhancement works, or to supply associated goods or services, arising out of, in relation to or following:

• bushfires occurring in NSW in calendar years 2019 and 2020

• floods occurring in NSW from January 2020 to March 2020, where a procurement is started after 4 May 2020 .

Procurements covered by this direction are exempt from using whole of government contracts and mandated prequalification schemes, including the Prequalification Scheme for General Construction Work up to $1 million (ex GST).

Agencies should comply wherever practicable with the:

• SME and Regional Procurement Policy

• Aboriginal Procurement Policy and Aboriginal Participation in Construction policy

• PBD 2017-05 Construction training and skills development

• PBD 2019-01 Engagement of professional services suppliers

• existing relevant prequalification schemes.

Where impractical, agencies are exempt from applying these policies to procurements covered by this direction.

NSW Procurement is working to identify Local Businesses and Regional Suppliers on whole of government prequalification schemes to make it easier for agencies to identify suitable suppliers to carry out work envisaged under this direction. NSW Procurement is also establishing a Regional supplier list to assist agencies to identify and contact suitable suppliers.

Application

This direction was approved by the NSW Procurement Board on 24 January 2020 and applies from that date until withdrawn.

This direction was amended on 4 May 2020 to extend the requirements to procurements arising out of, in relation to or following the floods occurring from January 2020 to March 2020 (where such procurements are within the terms of this direction).

Review

The NSW Procurement Board will review the Direction in 12 months from the date this direction was approved.

Context

The Minister for Finance and Small Business, Damien Tudehope MLC, and the NSW Procurement Board have issued this direction to ensure that bushfire and flood recovery funds support local businesses where this is achievable and to assist the economic recovery in bushfire and flood affected areas

2019-2020 has seen large areas of NSW impacted by devastating bushfires followed by floods. NSW government agencies are closely involved in bushfire and flood response, management, clean up, repairs and rebuilding damaged infrastructure.

This direction is consistent with the NSW Government Action Plan: A ten point commitment to the construction sector, which jointly commits NSW Government agencies to help improve the capability and capacity of the construction sector.

Beyond the immediate physical impacts, local economies and businesses are impacted by a decrease in visitor numbers and reduced business opportunities as projects or other funds are redirected to repairs and rebuilding. The bushfires and floods have occurred in conjunction with a period of extreme drought that has also severely affected local economies and businesses.