Flood Recovery Work - NSW State Government Must Preference Local SMEs

The NSW Government Procurement Board has issued a new Procurement Direction requiring the NSW State Government to give first preference to SMEs in the local government area, when procuring works and services in relation to flood recovery work. Note that a SME is an Australian or NZ firm with less than 200 FTE employees.

The Direction applies to the following type of work: repairs, rebuilding, remediation, and enhancement works, or the supply of associated goods or services arising out of, or relating to the floods in March 2021. Further, if the agency is engaging a head contractor, then it must include this obligation in the head contract for the procurement of subcontractors.

The overarching requirements of value for money and probity continue to apply.

In addition to making this a requirement for agencies, the state government is also encouraging insurance and private sector businesses to do the same.

This Direction comes on the back of similar obligations and procurement directives we saw last year, which continue, in relation to the Bushfires (see related HWL Ebsworth article we recently published on this issue and how it relates to Local Government Procurement).

This Direction and the clear preference to local SMEs does not breach the NSW Government Enforceable Procurement Directions as there is an exemption to the no 'offsets' rule for SMEs.

The full text of the Direction can be found here:

For more information on NSW Procurement, and the complex rules when procuring or responding to an opportunity, do not hesitate to get in touch.

Scott Alden (0419 268 121)

[email protected] | www.hwlebsworth.com.au