19/12/2007 - 22:00

ICT looks at changes to Buy Local

19/12/2007 - 22:00

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International trade agreements appear to have overridden the state government’s ‘Buy Local’ policy, raising concerns in some areas of industry that compete globally or nationally for local tenders.

ICT looks at changes to Buy Local

International trade agreements appear to have overridden the state government’s ‘Buy Local’ policy, raising concerns in some areas of industry that compete globally or nationally for local tenders.

ICT sector players are known to have sought a meeting with government representatives to determine if there is cause for concern, or if a more innovative approach to the state’s procurement policy is possible.

The Australia-US Free Trade Agreement and the Australia-New Zealand Government Procurement Agreement mean the buy local benefits cannot be applied in many circumstances involving tenders for goods or services from other states, New Zealand or the US.

The Australian Information Industry Association wrote to its members this month alerting them to the issue, seeking feedback and noting that it had sought to meet with the state government.

An AIIA spokesman said that it was too early to know if players in the sector had genuine concerns.

The state’s buy local policy has three areas of preference where local companies may get a bid improved.

One is a non-price related criteria with up to 20 per cent qualitative preference where points are allocated with regard to location of the tenderer or its employees.

Another is a price-preference relating to imported content, with up to 20 per cent premium added to the non-local part of a bid.

Finally, there is a regional price preference, which allows local firms to have a 10 per cent reduction in price.

Some of the buy local policies can remain in force below certain thresholds. In regional tenders, for instance, of goods or services below around $705,000 or construction below about $9.5 million, the policy may remain in force under the AUSFTA.

State Supply Commission CEO Ray Alderton said the impact of the agreements was negligible, with the ANZ GPA deal having been in existence in a similar form since 1997.

“The reality is WA companies are very competitive and this is not an issue,” he said.

“Of the value of business that has been awarded by government in the past 12 months about 90 per cent went to companies with a local presence in WA.”

Mr Alderton said agencies rarely made decisions based on one narrow criterion such as price.

“What is more important in Buy Local is the philosophy that agencies should be looking to buy value,” he said.

One sector that could be affected was the ICT industry, notably in hardware sales where large value contracts are often sought with slim margins, Mr Alderton said.

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