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Defence Estate Quality Management System (DEQMS) BSi Certification

Local Industry Participation

Defence Industry Participation Policy

The Defence Industry Participation Policy will provide a policy framework for maximising Australian and local industry involvement across Defence materiel and non-materiel Defence procurement of $4 million and above ($7.5 million for construction services).

The policy, which is expected to be released in 2018, will aim to ensure local companies in the vicinity of Defence bases, facilities and training areas are properly considered and provided the opportunity to compete and win work.

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Commonwealth Procurement - Value for Money

Local industry participation is an expected outcome of Commonwealth expenditure. This expectancy builds on the Commonwealth Procurement Rules, which require procurement practices that do not unfairly discriminate against Small and Medium Enterprises (SMEs) and provide appropriate opportunities for SMEs to compete for Commonwealth funded work.

A core requirement of Commonwealth procurement is for the Commonwealth to consider, in the context of determining value for money:      

  • the benefits of doing business with competitive SMEs when specifying requirements and evaluating value for money;
  • barriers to entry that may prevent SMEs for competing (for example, costly preparation of tenders);
  • the capabilities of SMEs and their commitment to local or regional markets; and
  • the potential benefits of having a larger, more competitive supplier base.

To ensure compliance with the relevant requirements in the Commonwealth Procurement Rules, the Contractor is required to develop a Local Industry Capability Plan. The Local Industry Capability Plan will outline the Contractor's approach to ensuring that full, fair and reasonable opportunity is afforded to local industry in the delivery of the project.

What is a Local Industry Capability Plan?

The Tenderer is requested to prepare, complete and lodge a draft Local Industry Participation Plan which includes providing details regarding:

  • the expected economic impact of the Works;
  • the proposed local industry participation in the delivery of the Works;
  • project contestability; and
  • the Tenderer's proposed approach for implementing and reporting on the Local Industry Capability Plan.

If the Tenderer wishes to lodge its Tender on a Joint Bid Basis, it is requested to provide any information in the Local Industry Capability Plan which it considers relevant to its proposed joint bid arrangements (as applicable).

The successful Tenderer will be required to prepare a Local Industry Capability Plan (based on the draft) and submit it to the Contract Administrator after the Award Date of the Contract.

The Local Industry Capability Plan must detail the Contractor's approach to the market and intended Australian engagement locally, regionally and nationally for the project.

For projects valued at $7.5 million and above, the Local Industry Capability Plan will be used by the Commonwealth in considering the economic benefits to the Australian economy to be derived from the project during the term of the Contract in accordance with paragraph 10.31 of the Commonwealth Procurement Rules.

During the term of the Contract:

  • the Contractor will use the Local Industry Capability Plan to:
    • demonstrate how local Australian industry is, or will be, engaged and provided opportunity to contribute to the delivery of Defence capability requirements;
    • provide evidence of the local and broader Australian industry commitment, in dollar value, benefits and work package terms;
    • deliver data on the economic benefits for the Australian industry locally, regionally and nationally; and
    • indicate how these obligations will be monitored and managed during the term of the Contract;
  • the Commonwealth will use the Local Industry Capability Plan to:
    • determine the extent of the economic benefit to the Australian economy;
    • validate engagement and commitment to opportunities for local industry participation in the procurement or the supply chain; and
    • identify further opportunities to support and develop Australian industry.

Reporting Requirements

The contractor must report at least six monthly on the implementation of the Local Industry Capability Plan.