Here’s how SMEs can earn their share of NSW contracts

Small businesses in New South Wales have a better chance than ever before of gaining a share of the State Government’s $40 billion annual budget for goods and services. 

In an exclusive interview with Catherine van der Meulen for a TradeSquare podcast, Minister for Finance & Employee Relations, Damien Tudehope, has explained his mission to make it easier for SMEs to tender for contracts – a process which is ensuring regional companies can access a more level playing field – and at the same time hone their skills in tendering. 

“I used to look at all these tier-one players and wonder why they got all the government work when small businesses didn't get matched up. It has been a real bugbear of mine since I was in business myself as a lawyer.”

Tudehope used to ponder why a local hospital authority buying a property, for example, had to get the conveyancing completed by a large city legal firm instead of by a local practice. Now, as the minister, he’s addressed the anomaly, paving the way for thousands of NSW small businesses in rural areas and the city alike to have fair access to tenders. 

Larger businesses tendering for major projects like cleaning up after the bushfires were obliged to subcontract local small businesses wherever practical so the funds spent on remedial work went back to the local economy. 

However, Tudehope understands that many small businesses find it challenging to complete the government tender process. 

“It's all very well to say we're going to give them this business, but if we have non-qualifying tender documents, then often those documents end up in the bin. So we've got to teach small business, how to tender to do business with the NSW Government.”

To help, businesses have been encouraged to complete a training module on documentation which results in them being registered as authorised suppliers to the government.

“In those circumstances, the agency knows it is dealing with a business that knows how to tender and from there flows the opportunity of being successful in a tender. 

“The other benefit of that is that if you know how to tender to the government, you certainly then know how to tender to other organisations and to the private sector.”

Rapid payments policy

Another advantage is that the State Government has undertaken to pay registered suppliers within five days – terms that assist small businesses cash flow.

Tudehope’s initiative came at the right time – after the challenges of drought, followed by floods, followed by bushfires and now a pandemic, times have never been tougher for small businesses. So governments have had to focus on creating an environment where economic recovery is as fast and widespread as possible. 

The NSW State Government has invested about $10 billion on packages designed to keep small businesses afloat during the pandemic, a figure Tudehope admits rolls off the tongue pretty easily but represents a significant hit to the state’s economy. 

“Coming from a place where businesses had their doors closed, and weren't able to pay their rent, their suppliers, banks, we're now asking them to re-emerge into the marketplace, hopefully, in an economy which is recovering.” 

A big feature of the recovery focus is on encouraging businesses and consumers alike to buy local.

“Supply chains being what they are, often it's your local business where you'll be able to access things.” 

Tudehope believes the government is obliged to create an economic environment where businesses can thrive. In the past two years in NSW, that has included targeting industries most impacted by closed borders, lockdowns and social-distancing rules, including the hospitality industry. 

“We're recovering because as a state, as a country, as businesses, we have to make a huge sacrifice by bearing the brunt of the economic impact, which is being created by this pandemic. As we emerge from it, things are looking really positive. Lots of the data which we're getting about credit-card spending and the like is very positive. There's a lot of money flowing through the economy. 

“The opportunities for regional businesses and local businesses are terrific. Money is there to be spent, money is flashing through the economy. The supply chain issue is something that we've got to keep our eye on.”

Small Business Month – a chance to focus on rebuild, recharge and renew

March will welcome this year’s Small Business Month – and with it an opportunity for small business people to collaborate and share experiences with each other. 

Tudehope wants businesses to come together and focus on positive measures they take to improve their business. It may be teaching people how to use IT better, how to use different platforms for the purpose of sharing ideas, or how they relate to their banks. 

“There are a plethora of ideas out there and we're asking small businesses to talk about what they did during the pandemic, what opportunities there are in the future. The whole emphasis during Small Business Month is the idea of collaboration. 

“The best sources of truth and support and knowledge are generally other businesses.”

Tudehope says business leaders with a collaborative mindset will often be significant players in their local communities. So, too, those who advocate buying local. 

“Buying local has probably been around forever. But there was this new focus on supporting the small businesses in your community because although one business might be going okay, others were really struggling. 

“Collaboration by supporting your local businesses is really an important part of making sure that each individual local small business goes well.”