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Information for Small Businesses

This section outlines some frequently asked questions from small businesses around participating in Australian Government procurement processes. It also outlines arrangements the Australian Government has put in place to make it simpler for Australian Government buyers to work with your business.

I’m a small business. Can I compete successfully for Australian Government work?

Most definitely.

Many small businesses supply goods and services to the Australian Government. As a small business you may also find a profitable market in supplying to other businesses that supply to the Australian Government.

The Australian Government encourages small businesses to compete for Australian Government work and is committed to sourcing at least 20 per cent of procurement by value from small and medium enterprises (SMEs). The Australian Government also committed to sourcing at least 35 per cent (by value) of contracts up to $20 million from SMEs.

SMEs are defined in the Commonwealth Procurement Rules (CPRs) and include Australian and New Zealand firms with fewer than 200 full-time equivalent employees.

Under the CPRs, which govern procurement decisions in Australian Government organisations, all potential suppliers to the Australian Government must be treated equitably based on their commercial, legal, technical and financial abilities to perform. An Australian Government organisation must not discriminate against a potential supplier due to their size, degree of foreign affiliation or ownership, location, or the origin of their goods and services.

To ensure that SMEs can engage in fair competition for Australian Government business, the Australian Government requires public sector officials to apply procurement practices that do not unfairly discriminate against SMEs and provide appropriate opportunities for SMEs to compete.

The Australian Government requires officials to consider, in the context of value for money:

  • the benefits of doing business with competitive SMEs when specifying requirements and evaluating value for money
  • barriers to entry, such as costly preparation of submissions, that may prevent SMEs from competing for Australian Government contracts
  • SMEs’ capabilities and their commitment to local or regional markets
  • the potential benefits of having a larger, more competitive supplier base through the disaggregation of larger projects into smaller packages, which encourages more businesses to participate.

I am a small business. Are there any arrangements in place to make it easier for Australian Government buyers to approach me for work?

Under the Commonwealth Procurement Rules, Australian Government organisations can directly engage a small and medium enterprise (SME) for procurements valued between $80,000 and $200,000 (including GST), or between $80,000 and $500,000 (including GST) for procurements by or on behalf of the Department of Defence, providing value for money can be demonstrated.

Prior to approaching an SME on this basis, Australian Government organisations must first give Indigenous businesses an opportunity to bid for these goods and services before they can directly engage a non-Indigenous owned SME.

If an Australian Government buyer is seeking to engage you on this basis, you may need to provide evidence of your SME status.

Under certain circumstances, Australian Government buyers may also approach you directly for procurements valued up to $80,000 (or $400,000 for specific entities).

Can I respond to open tenders on AusTender, or should I wait for Australian Government buyers to approach me directly?

While Australian Government buyers may approach you under these arrangements, this should not stop you from considering responding to open Approaches To Market (ATMs) advertised through AusTender, or any approaches you may receive through panel arrangements or limited tender arrangements.

When an opportunity has been advertised as an open tender through AusTender, or circulated to specific providers to request quotes through a limited tender process, contracts may only be awarded to a supplier that responds to the ATM. If you are interested being considered for work that has been advertised, you will need to respond to the ATM.

For more information on identifying opportunities to sell to government, responding to an ATM, and getting selected to supply to government, please refer to the Guide to selling section of this website.

Further information on how to use AusTender is available in the Frequently Asked Questions – Using AusTender section of this website, and on the AusTender Help and Information Centre.

I’m a small business. What happens if I don’t get paid on time?

It does not matter what size your business is, if the Australian Government organisation has acknowledged the satisfactory delivery of the goods and services in accordance with your contract and received a correctly rendered invoice from you, you are entitled to be paid on time.

Where payment is not made within the maximum payment terms, the Australian Government organisation is required to pay interest to your business if the amount of interest accrued is more than A$100, as per the Supplier Pay On-Time or Pay Interest Policy (unless a specific exemption outlined in the policy applies).

I am being treated unfairly by a business partner or head contractor while delivering work for an Australian Government contract – where can I go to for help?

In the first instance, you should attempt to resolve your dispute with your business partner. Australian Government buyers typically do not have the authority to intervene in contractual matters between business partners, or in their suppliers’ supply chains, but are encouraged to work with direct contractors on their implementation of effective complaints handling processes.

If you are unable to resolve your dispute, there also is a range of advice and support available for small businesses to resolve disputes with other businesses. The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) helps small business operators to resolve complaints and disputes, including contract and payment disputes and unfair contract term disputes. The ASBFEO is able to examine your matter and either help you directly, or refer your matter to the best placed organisation to help you. For information on how to contact ASBFEO, please refer to ASBFEO’s Contact Us page.

The ASBFEO has also developed the Dispute Support online referral tool that makes it easy to find the most appropriate low cost dispute resolution service to help you resolve your business dispute.