South Australian Industry Participation Policy. Measuring Economic Benefit from Procurement through Labour, Capital Investment and Supply Inputs

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1 South Australian Industry Participation Policy Measuring Economic Benefit from Procurement through Labour, Capital Investment and Supply Inputs

2 Industry Participation Policy Employment, Investment, Supply inputs 2

3 Our Objectives Build capacity of local businesses to successfully tender for Government contracts Policy and practices that remove impediments and support local participation Procurement reforms that provide greater economic benefit to the State and local businesses 3

4 Industry Participation Advocate To build Awareness, to Create Opportunities, to Initiate Change 4

5 Key Drivers of Economic Contribution from Procurement SUPPLY INPUTS Value of goods and supplies sourced from South Australian businesses EMPLOYMENT Number of South Australian jobs or labour hours INVESTMENT Amount of new capital expenditure in South Australia The physical location or the registered office of a business does not necessarily translate to economic benefit to the State. This is primarily through jobs, investment and supply inputs directly linked to the delivery of contracts on behalf of the South Australian Government Spending on Goods and Services is approximately $4 billion per annum & construction procurement is another $1.5 billion to $2.5 billion per annum 5

6 Key Drivers of Economic Contribution from Procurement South Australia has a sophisticated, but still relatively simple, appraisal of economic contribution. Procuring from locally-based suppliers and suppliers who source inputs locally maximises the amount of local labour and capital used, and therefore the amount of economic contribution being retained in South Australia. The South Australian Industry Participation weighting system that balances the economic benefit to the State as part of a holistic value-for-money assessment. 6

7 Lifting the Industry Participation weighting Prior to a decision to lift the weighting a merit assessment would be conducted to determine sectors of the economy where this would have benefit. To address high unemployment and to stimulate economic activity Import replacement Stimulation of a local industry sectors in decline Opportunity for skills transfer and technology exchange Opportunity to attract capital investment providing long term benefit to the State or a region In this case a scoring methodology would be developed to deliver the Government s objectives. 7

8 Industry Participation Plan requirements THE PURPOSE OF THIS SECTION IS TO MEASURE THE POTENTIAL ECONOMIC BENEFIT TO THE STATE THROUGH THE USE OF LOCAL LABOUR. We are seeking the number of labour hours the business will employ directly to deliver the contract should the business be successful. 8

9 Industry Participation Plan requirements THE PURPOSE OF THIS SECTION IS TO MEASURE THE POTENTIAL ECONOMIC BENEFIT TO THE STATE THROUGH THE CAPITAL EXPENDITURE. What is the total value of investment to be sourced from within South Australia? What is the total value of investment to be permanently located in South Australia? 9

10 Industry Participation Plan requirements THE PURPOSE OF THIS SECTION IS TO MEASURE THE POTENTIAL ECONOMIC BENEFIT TO THE STATE THROUGH THE USE OF SUPPLY INPUTS. (E.G. MERCHANDISE, FINISHED PRODUCTS, FOOD AND BEVERAGES, SUPPLIES AND RAW MATERIALS) Will the business deliver this contract entirely in-house? What supply inputs valued at $110,000 or more be sourced from within South Australia? What supply inputs valued at over $110,000, will you purchase to deliver this contract? 10

11 Industry Participation Plan Implementation: Industry Participation Plan commitments become part of contract conditions Early engagement with industry Input from OIA on work packages Industry Advisory Committee/Reference group Commitments to use SA based suppliers and subcontractors Subcontractors bound by the same SA Industry Participation requirements Monitoring and reporting

12 From the 6 th November 2015 Minimum 15 per cent weighting for all Government contracts worth $220,000 and above. Minimum 20 per cent weighting will apply to the $93 million of Northern Adelaide infrastructure spend announced in the State Budget. A new 20 per cent weighting will also apply to the recently announced $985 million Northern Connector project Meet the Buyer events Supplier Workshops

13 Northern Economic Plan CONNECTING WITH BUSINESS PROGRAM Meet the Buyer Program Provides local businesses the opportunity to meet face to face with senior government buyers and project managers to present their capabilities and discuss how they can assist government agencies to meet their purchasing and contracting needs. 13

14 Northern Connector Project CONNECTING WITH BUSINESS PROGRAM Supplying to Government Workshops A Suppliers Guide to Winning Government Business Topics covered include: Knowing Your Customer Understanding the Rules Understanding the Process Finding Opportunities Building Relationships Tendering to Win 14

15 Contact Level 13, 99 Gawler Place ADELAIDE SA 5001 T: E: oia@sa.gov.au