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Office of the Industry Advocate News Update - October 2015
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Support SA jobs and boost your chances of winning Government work


I am pleased to inform you the State Government has sent a clear message to businesses wanting to win Government contracts - support South Australian jobs and you’ll increase your chances of success. 
 
The Treasurer Tom Koutsantonis announced yesterday the State Government is increasing the minimum Industry Participation weighting for “local jobs” to 15 per cent of the tender evaluation for all contracts worth $220,000 and above.
 
In a boost for northern Adelaide, contracts relating to $93 million of infrastructure spending announced in the 2015-16 State Budget will require a 20 per cent minimum Industry Participation weighting for local jobs. These projects in the north include upgrades to schools, children’s centres and public housing, as well as $55 million over three years to build a new Gawler East Collector Link Road.
 
The State Government’s decision to increase minimum weightings to at least 20 per cent for projects connected to the Northern Adelaide Economic Plan will be supported by engagement with workers in the automotive supply-chain who can transition to work on Government contracts.  This now gives the Office of the Industry Advocate the opportunity to put in place a tailored industry participation policy for northern Adelaide which supports jobs and industry development.  The Office of the Industry Advocate will run a series of Meet the Buyer events and Supplying to Government Workshops focussed specially on the projects in the north.   
 
It has been identified that when the Industry Participation weighting is raised to 10 per cent or higher, it creates an incentive for businesses tendering for work to actively pursue local labour and to use local supply inputs wherever possible.  The policy settings approved by the State Government have already been effective in stimulating the State economy, especially in construction projects and this will be further enhanced by yesterday's announcement. The main benefit of the higher Industry Participation Policy weightings is that tenderers stand the best chance of winning through using a local workforce either directly or indirectly through local sub-contractors and suppliers.  A good example of this has been in the Torrens to Torrens IPP Plan where the consortium has committed to use more than 90 per cent local labour with a value over $70 million; more than $1 million in new capital purchases to be permanently located in the State and it will utilise a substantial list of capital equipment, and, more than 90 per cent of sub-contracts where most of the product or service will be carried out in the State with a target spend of nearly $290 million.
 
When the primary contractor considers services with a local workforce they are likely to have a much greater chance of success from procurement and this is a pattern applying in nearly all sectors of our economy. This announcement will also provide confidence that further stimulus to the economy can be achieved where increased Industry Participation weightings are used to generate significant capital investment in the State with associated industry development.
 
When an economic development weighting of 20 per cent or more is applied to procurements, this can be directed at generating innovation and long term well-being in the form of economic growth. Importantly, by increasing the impact of the Industry Participation Policy it can support more economic contribution to the State, that is, more jobs, more local supply inputs  and more investment from procurement.
 
Because of changes to the Industry Participation Policy, businesses in the professional services sector are likely to change how tenders are presented to State Government. Whilst some expertise can be utilised from outside of the State, there is already significant capacity here. The major professional services firms have advised me that the Industry Participation policies of the State Government are influencing how they tender and also are providing grounds for their local practices to make the case to national boards for increased permanent resourcing in the State. This decision may increase the confidence to retain or recruit staff and graduates.  

Small Business Commissioner, John Chapman said the announcement is a huge boost for small business across the State.

"To have an Industry Participation weighting of 15 per cent for all tender evaluations above $220,000 creates enormous opportunities and recognises the importance of the small business sector to the State," Mr Chapman said.

 
Attached is the media release Support SA jobs and boost your chances of winning Government work.
 
http://www.premier.sa.gov.au/images/news_releases/2015/15_10Oct/local-jobs-boost-for-govt-contracts.pdf

Please feel free to circulate this information to your network of contacts.


Hon Tom Koutsantonis MP                           Ian Nightingale
Treasurer                                                        Industry Participation Advocate
Minister for Small Business

 
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