New Procurement Rules Enhance Access for Small Recruitment Companies

The federal government’s new procurement rules are poised to enhance access to government contracts for small-to-medium recruitment agencies significantly. These rules will facilitate the promotion of women-owned recruitment companies on AusTender.

Starting this month, all requests for quotes via the Federal Government’s People Panel must include at least one small or medium-sized enterprise (SME).

Additionally, new targets have been set: 25% of procurements under $1 billion and 40% of procurements under $20 million must be sourced from SMEs. The rules define SMEs as businesses with fewer than 200 full-time equivalent employees, including subsidiaries and associated entities.

Minister for Small Business, Julie Collins, stated that the changes “will help to ensure Australia’s small businesses get a bigger slice of government procurement opportunities.”

Alongside the increased emphasis on small businesses, 5% of government agencies’ spending on People Panel services can now be allocated directly to First Nations businesses that are not on these panels, thanks to a new flexibility allowance in the rules.

New Rules Enable "Gender-Responsive" Procurement

The updated procurement rules now allow for the identification of women-owned and led businesses on AusTender.

Finance Minister Katy Gallagher stated that this change will "enable a gender-responsive approach to procurement, and give the government the ability to measure and analyse the women-owned and led businesses the Commonwealth is contracting with."

She emphasised that the government procurement framework is "a major economic lever," and the new changes aim to boost small businesses, stimulate First Nations entrepreneurship, and improve gender equality.

Desire for Clearer Definitions

RSCA "welcomes any initiatives that support smaller businesses in tendering and navigating the complexity of government tendering processes," says head of advocacy and policy Brooke Lord.

However, Lord emphasises the need for a clearer definition of the 200-employee limit to better accommodate the unique nature of the recruitment industry and on-hire work arrangements.

While the 200-employee limit is an improvement over the 15 and 30-employee definitions in other legislation, including on-hire workers in this limit would exclude many recruitment companies that are effectively small and medium-sized.

"If you compare it to a traditional business with 15 to 30 employees, a recruitment company with 15 to 30 internal employees will have a whole lot more than 200 on-hire workers out on site," Lord explains.

"I believe there is further work to be done with the government to develop a better definition of small-to-medium business in the on-hire context."

Lord also welcomes the new ability for women-owned businesses to promote their status on AusTender.

"It will be interesting to see how many come forward. We often discuss with governments the number of female entrepreneurs in our industry and how wonderful it is."

"It's a dynamic and flexible industry where many women have flourished. One of the industry's strengths is the growth of successful women-owned businesses. Anything that highlights this to the wider business community is a positive step."