The Fremantle Chamber of Commerce sees key benefits to local procurement in recognizing the talent and diversity of Fremantle industry and business, fostering competition by giving full, fair and reasonable opportunities to local businesses and increasing local contracting opportunities and thereby increasing local and regional economic growth.

The intent of both State Policy for local procurement and participation and WALGA’s policy position includes local governments supporting their own local industry and local economy wherever possible and reasonable.

Until such time as the Local Government Act 1995 is brought in line with State Government Policy, the Chamber requests that the City of Fremantle review their qualitative criteria of assessment included in all request for quotes and tenders to include a clear reference to local business and local employment as per other surrounding local governments.

The Chamber also encourages other businesses to consider contracting local businesses who demonstrate competitiveness and skill to do the required contract or service.

Our Small Business and Retail Committee recently raised the loss of a significant local contract to an eastern states provider with no base here in WA. This issue was raised initially under our Greater Fremantle Action Plan, and other members have raised also recently raised concerns around the lack of specific local content clauses in the City of Fremantle procurement criteria – particularly for the services and media and creative sectors.

Development and Infrastructure Committee Project Team

Danicia Quinlan (FCC CEO), Stuart Neal (Slavin Architects), Marc Greco (Engineering Consultants Australia)

Objective

To activate change with the City of Fremantle’s, and other lead contracting organisations’, local procurement processes to deliver better economic outcomes for local businesses.

Work Completed to Date

Quantifying and Scoping the Issue

Our Small Business and Retail Committee raised that the City and other larger Fremantle business don’t appear to have a local procurement policy, or local participation plan in place. This is a requirement of Federal, State and most large mining, resource and property sector industries.

Local creative sector members in the design, advertising, event and social media space approached the Chamber following on from a number of service contracts under the Destination Marketing Working Group procured with larger City based agencies, despite the some 220 local creative and design agencies within the City of Fremantle.

A review of State Government and WALGA policies highlighted one challenge is the Local Government Act (see analysis below)

A review of other LGAs qualitative selection criteria highlighted there is flexibility to include local content under qualitative assessment criteria

Work can be done to structure, and promote, a Chamber director of members by sector to encourage local organisations to seek out pre-qualified organisations across a range of fields. See Chamber Directory here.

Determining the Stakeholders

Generating a list of the players and stakeholders who can make a difference in this area and initiate initial conversations to clarify positions (Local Creative Agencies, FCC members, South West Group, WALGA, State Government agencies and contracting organisations)

City’s role in terms of setting Policy, educating Officers and promoting local businesses to those issuing tenders and procurement teams

Case studies being explored

  • City of Cockburn
  • City of Joondalup
  • Dept of Defence
  • Lendlease

Create incentives and activations – ideas for change

  • Local Content/Procurement Policy included within sustainability policy in City’s procurement terms
  • Change of Sustainability policy to include local content in all tenders above $50,000 to bring in line with state government policy
  • Create local directory of services (see Chamber Directory)
  • Lobby state government for change to Local Government Act to reflect State Local Content Policy
  • Work with South West Group to advocate for change in their member Councils

Opportunities Coming Up

  • CoF and FCC Councillors Round Table Meeting (proposed project)
  • South West Group strategy prepared on issue
  • Dept of Defence Capacity projects

Further Background

The City of Fremantle’s Position on Local Content

City follows the requirements of the Local Government Act and associated regulations when procuring. These generally require an open process that doesn’t restrict competitiveness and allows all appropriate organisations to apply.

That said, the City does provide specifications and requirements within its procurement process to ensure the City receives a product or service that suits the City’s needs and individual circumstances. Part of this is a balance between tailoring an outcome and the cost of that outcome to ensure officers manage the City’s resources for efficiency and effectiveness.

The City is aware that the state has made a number of comments in relation to procurement of both local providers and indigenous organisations. The City supports the sentiment of both, however the comments have not been applied to changes in our Local Government Act. The City feels the Office of the Auditor General makes it clear they need to follow the Act requirements when procuring products and services. The City sees local content as delivery to the Council’s social agenda, not economic, and remain committed to operating within the rules that are set in the ACt.

The City states they are working with the State Body, Western Australian Local Government Association, and the Department of Local Government in seeking changes to the Act to support local government following the state in its approach to procurement.

The City has no requirement for local industry seeking approvals, or subcontracting, to develop local participation plans as part of their tendering process.

The State Government Position on Local Content

WA Government spends approximately $20 billion per annum on goods, services, housing and works.

The Buy Local Policy was established to ensure Western Australians win a larger share of goods and services contracts. The state also requires industry to develop Western Australian Participation Plans (IPPs) in tender proposals that include local companies. It calls upon local government to support and encourage local industry participation in broader contracts.

The WA State Government Buy Local Policy 2002 considers tender evaluations, selection criteria weightings, aboriginal economic development, prescribed distances and regional zones, and ways to better facilitate supply relationships with local businesses as part of its commitment to improving local economic outcomes and jobs.

In December 2018 the WA Jobs Bill was enacted to provide further support to the Buy Local Policy.

A minimum local purchasing target of 80% of all purchases and contracts awarded is considered achievable. The State Supply Commission reports on the basis of individual government agencies achieving an 80% local purchasing target where practicable.

Under this policy Government agencies must include “local content” as a weighted selection criterion for all tenders with an estimated cost of $750,000 and above. The “local content” selection criterion must have a minimum weighting of 20%.

They also require publicly tendered requirements (involving tenders with an estimated cost of $50,000 or more), where a local business has been unsuccessful, to provide supporting reasons justifying the decision must be included in the tender evaluation report.

The State Government is also committed to supporting Aboriginal owned businesses through the introduction of the Aboriginal Procurement Policy (the Policy). From 1 July 2018, government departments has required to award contracts to registered Aboriginal businesses, consistent with progressive targets increasing to three per cent. The targets will apply to all government agencies when purchasing goods, services, community services and works. The targets are also intended to apply to Government Trading Enterprises. A report against the Aboriginal Procurement Policy in December 2019 has shown Aboriginal businesses have won 4.77% of government contracts, with 99% of those companies being headed quartered in WA and to a value of $167 million.

WALGA Position on Local Content

WALGA (WA Local Government Association) has produced a report on the Focus of WA Plan for Jobs and Policy Implications. WALGA also offers support to local governments through their Procurement Team and Procurement Toolkit. They manage a WALGA preferred supplier directory to assist local governments with pre-approved tenders for a variety of local services.

WALGA sees the key benefits of local procurement as follows:

  • Recognition of Western Australian industry and regional development.
  • Purchasing decisions based on best value for money considerations.
  • Fostering competition by giving full, fair and reasonable opportunity to local businesses.
  • Increase in local contracting opportunities and thereby increasing local and regional economic growth
  • Consistency of application by government agencies and private sector providers to Government.
  • Sustainable employment growth.
  • Maximises industry development potential.

It is the Chamber’s position that the intent of both State policy and targets, and WALGA’s policy positions includes local governments supporting their own local industry and local economy wherever possible, or reasonable.

A lack of local content criteria in tender documents, such as the recent security services contract, advertising agency requirements or website development tender, seems to go against this intent.

LGA PROCUREMENT CRITERIA CASE STUDIES

1. The City of Fremantle

The City has no allowance for local content within their tender processes, as evidenced by their procurement tender criteria below.

Sustainability – 10%

Tenderers must address the following information in an attachment and label it “Sustainability”. Your response must include consideration of (but is not necessarily limited to):

Please describe how your organisation minimises its energy use, including: energy efficient IT equipment including EnergyStar and EPEAT certified computers, monitors, printers and servers use of energy efficient lighting and temperature control energy saving practices such as automatic sleep mode for IT equipment and timers and sensors on lights

Please describe your organisation’s strategy / procedures / plans to achieve environmental and social sustainability results, for example:

  • environmental or sustainability policy and/or strategy
  • plans in place with targets and actions to reduce energy and water consumption, and waste to landfill
  • community contribution such as donations, sponsorships, and volunteering programs
  • staff engagement and education program
  • sustainable procurement

Please state how your organisation’s labour practices for employees, including temporary employees, are compliant with the:

Australian Fair Work Act 2009.

Relevant Federal or State award or certified industrial agreement

Promote the development of individuals with barriers to employment e.g. people returning to the workforce, Aboriginal and Torres Straight Islanders and Disabled people

2. City of Cockburn

The City of Cockburn’s qualitative criteria includes 10% in the tender evaluation for local content, and interestingly they include it as part of their corporate social responsibility with a focus on local economy, as evidenced below

4.0 Sustainable Procurement (Corporate Social Responsibility)

The City will consider sustainability in all procurement decisions to maximise the positive impact on environmental, social and economic outcomes within the community. This principle considers whole-of-life costing in sourcing goods, services or works when determining value for money. For formal procurement decisions, the City may weight sustainability up to a total of 20%, with a maximum of 10% able to be assigned for any one of the following elements.

Environmental Procurement that minimises unnecessary resource consumption, considers whole-of-life costs and delivers beneficial environmental economic outcomes is encouraged.

Social Procurement from organisations such as Aboriginal controlled businesses and social enterprises including Australian Disability Enterprises is encouraged.

Local Economy (within City boundaries) The City will provide supply opportunities for local organisations that can demonstrate economic benefits, either through being a local business, the use of local sub-contractors or local employees. This will be dependent on the extent to which the local business can demonstrate a contribution to the local economy but does not include any preferential treatment of pricing in the evaluation process.

3. City of Joondalup

The City of Joondalup qualitative criteria includes 5% in the tender evaluation for local content, and interestingly they include it as part of their corporate social responsibility with a focus on local economy.

  • community contribution such as donations, sponsorships, and volunteering programs
  • staff engagement and education program
  • sustainable procurement

For further information, or information on the Chamber’s Member Directory, or work on this initiative please contact the Chamber’s Membership & Committee Officer.