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Small and medium businesses secure record number of Commonwealth contracts

Small and medium enterprises (SMEs) have secured more than a $5.4 billion increase in Commonwealth contracts to supply goods and services to the Australian government.

by | 15 Nov, 2021

Small and medium businesses secure record number of Commonwealth contracts

This financial year more than 45,700 – or 54 per cent – of contracts, totalling $18.7 billion were awarded to SMEs, the level on record and the highest annual increase for SMEs, up from $13.6 billion in 2019-20.

Finance Minister Simon Birmingham said the government continued to back SME participation in Commonwealth procurements and continued to exceed its targets in regard to the proportion of contracts going to SMEs.

“Small and medium businesses continue to punch well above their weight in the highly competitive government procurement market,” Mr Birmingham said.

“SMEs are the engine room of our economy, and this strong performance is further demonstration of the huge economic and jobs contribution they make.

“We fully recognise that many small and medium businesses have done it tough during the pandemic. This strong SME performance is a shining light and is a testament to the quality of the goods and services that Australian SMEs continue to produce and deliver.

“Enhancing opportunities for small businesses to bid for and win work will be critical to our ongoing economic recovery and as our nation continues to open up.

“This outcome also reflects our ongoing commitment to boosting industry capability and ensuring a level playing field for Australian SMEs in Commonwealth procurements.”

The Minister for Employment, Workforce, Skills, Small and Family Business, Stuart Robert, said changes to the procurement framework has been the main driver for SMEs to successfully win government contracts.

“We continue to cut red tape and reduce costs for small businesses within the government procurement market,” Mr Robert said.

“We’ve done this by changing the rules to allow for the direct engagement of SMEs for procurements valued up to $200,000, where the engagement provides a value for money outcome.

“This measure, as well as others like the greater use of whole-of-government panels to reduce the costs of tendering, five-day payment times for e-invoices, and assessing the domestic economic benefits offered by suppliers for large contracts, are all about making it easier for SMEs to bid and secure Commonwealth contracts.”

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