Latest / 360 with Katie Woolf / NT Buy Local Industry Advocate Denys Stedman says his latest report found that the NT Government has considerably improved in supporting local businesses in its procurement processes

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NT Buy Local Industry Advocate Denys Stedman says his latest report found that the NT Government has considerably improved in supporting local businesses in its procurement processes · 360 with Katie Woolf

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  Speaker 1: We know that the annual report's been released on the
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  Speaker 1: Northern Territories by Local Plan.
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  Speaker 2: It's completed by industry advocate.
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  Speaker 1: Who plenty of you will know, mister Dennis Stedman, and
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  Speaker 1: the review aims to evaluate the effectiveness of the scheme.
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  Speaker 1: It also makes recommendations in respect to the Northern Territory
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  Speaker 1: government's procurement. Now, the findings will state that government spending
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  Speaker 1: in the last financial year have reached its highest level
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  Speaker 1: since the initiative began in twenty seventeen, but concerns were
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  Speaker 1: raised about the ability of agencies to adequately manage contracts
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  Speaker 1: and monitor performance of contractors. Now, the author of that report,
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  Speaker 1: Dennis Stedman, joins me on the line right now. Good
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  Speaker 1: morning to you, Dennis.
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  Speaker 3: Good morning Katie. How are you.
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  Speaker 2: Yeah, really good? Thank you so much for your time
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  Speaker 2: this morning.
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  Speaker 3: Dennis.
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  Speaker 1: What were the key findings of your most recent report.
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  Speaker 3: Look, I think the key findings were that clearly there
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  Speaker 3: has been improvement by the government in terms of the
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  Speaker 3: application of the policy intent to the Buylocal Plan, which
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  Speaker 3: when you boil it all down, is about trying to
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  Speaker 3: preference territory businesses through the Northern Territory Government's procurement process.
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  Speaker 3: So you know, I concluded this year for the first
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  Speaker 3: time that there was a market improvement in that, and
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  Speaker 3: I felt confident enough to say, oh, yeah, we have
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  Speaker 3: we have improved, which is different to the first four
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  Speaker 3: reports I've put out, where really I said the opposite.
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  Speaker 1: And so, Dennis, by the sounds of it, we are,
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  Speaker 1: you know, we are buying local more often, or we
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  Speaker 1: are obviously you know, contracting locals more so than going
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  Speaker 1: with interstate for different projects in the territory.
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  Speaker 3: That's right, And you know, the statistics I published in
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  Speaker 3: my report, you know, would indicate that ninety percent of
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  Speaker 3: the money that was spent last morning into a year
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  Speaker 3: by the territory government through procurement was with territory enterprises
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  Speaker 3: territory businesses, so that you know, that's a fairly high
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  Speaker 3: rate given that in past years it's sort of varied
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  Speaker 3: between let's say the low seventy percents you know, through
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  Speaker 3: to the mid eighties. So that's a fairly significant percentage increase,
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  Speaker 3: which is fantastic.
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  Speaker 2: And what do you reckon has really seen that changed, Dennis?
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  Speaker 1: Is it the fact that you know that the government
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  Speaker 1: is trying to make sure that they are engaging locals.
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  Speaker 3: Look, I think that's partly it. You know, I've been
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  Speaker 3: criticized in the past of being negative and all sorts
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  Speaker 3: of things and unfair to the government about expectations. But
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  Speaker 3: it's people like me bringing these matters to the attention
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  Speaker 3: of government agencies, engaging with them and saying, hey, guys,
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  Speaker 3: you know, is there a way that we can through
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  Speaker 3: your procurement process you get that percentage up? Are the
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  Speaker 3: things that we could be doing differently? And it's all
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  Speaker 3: about education. And you know, five years ago or six
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  Speaker 3: years ago now, when the Bylocal Plan came out, it
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  Speaker 3: was pretty foreign to a lot of people in government
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  Speaker 3: who were doing pro killment. So was it a prize
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  Speaker 3: that it wasn't embraced as well? Perhaps is what I
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  Speaker 3: should have been Not really, So there's been a fairly
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  Speaker 3: long education process within government about hey, this is what
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  Speaker 3: the bilocal plans is, this is what we should be
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  Speaker 3: trying to do. And I've been having some over the
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  Speaker 3: last eighteen months two years, some really good conversations with
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  Speaker 3: the larger procuring agencies available. You know, what are the
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  Speaker 3: benefits of supporting local business. And I think the message
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  Speaker 3: is starting to get through, which from my perspective is
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  Speaker 3: exactly what I'm looking for.
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  Speaker 2: Dennis.
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  Speaker 1: Obviously, we know what the positives are in terms of
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  Speaker 1: local contractors and local businesses winning work. Are there any
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  Speaker 1: sort of are there any negatives in the sense that
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  Speaker 1: it can sometimes I don't know, can it sometimes be
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  Speaker 1: a more expensive option for the Northern Territory government and
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  Speaker 1: in turn the territory taxpayer.
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  Speaker 3: Absolutely, there's any number of examples that I've seen that
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  Speaker 3: I could point to to say, well, look we're actually
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  Speaker 3: procured this good or service from this guy and it
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  Speaker 3: was you know, maybe it was ten percent dearer than
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  Speaker 3: the same good or service procured from someone else who
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  Speaker 3: wasn't in the territory. But this is where it all
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  Speaker 3: comes back to this whole concept of value for territory,
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  Speaker 3: and that's what sits behind the bilocals. So that the
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  Speaker 3: policy intent of the Bylocal plan is not you know,
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  Speaker 3: we need to spend every single dollar with territory businesses
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  Speaker 3: at all costs. It's about, well, we want to preference
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  Speaker 3: territory businesses where the territory business can show that it
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  Speaker 3: provides better value for territory than someone else. Now, the
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  Speaker 3: value for territory is not just the price. That's what
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  Speaker 3: other things does that business bring to the Northern Territory.
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  Speaker 3: So there's things like employment, you know, Indigenous employment, training opportunities,
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  Speaker 3: community support initiative, all sorts of things. The value that
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  Speaker 3: is put on those is often hard to quantify, but
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  Speaker 3: can well and truly exceed the additional amount you might
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  Speaker 3: pay for the goods or service from that territory business. Therefore,
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  Speaker 3: when you factor all that in together, even though you're
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  Speaker 3: paying a little bit more for the goodsial service, you're
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  Speaker 3: actually delivering a bigger benefit for the territory.
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  Speaker 2: Yeah.
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  Speaker 1: Now, Dennis, when you look at this year's report comparatively
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  Speaker 1: to other years, are there any Are there any areas
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  Speaker 1: where you sort of haven't seen a huge amount of progress.
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  Speaker 3: Yeah. One of the major frustrations I have is around
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  Speaker 3: the contractor reporting in contract managements, part of procurement. So
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  Speaker 3: it's all, well, I'm fine to say, well, we're going
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  Speaker 3: to give this contract to this particular company. That's not
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  Speaker 3: the end of the process. You know, we as taxpayers
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  Speaker 3: in the territory need to make sure that if we're
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  Speaker 3: contracting to buy a box of green widgets that actually
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  Speaker 3: get delivered green widgets, that they don't break the first
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  Speaker 3: time we go to use them. So that is about
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  Speaker 3: managing the contract properly to make sure that we're getting
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  Speaker 3: what we've paid for, and then when we're not getting
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  Speaker 3: what we've paid for, we can take some steps to
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  Speaker 3: get that rectified along the way hopefully.
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  Speaker 1: And Dennis, does that also sort of incorporate you know,
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  Speaker 1: some of like larger projects where you know, where we
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  Speaker 1: might you might have a contractor you know, set out
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  Speaker 1: to deliver that project and the cost blows out.
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  Speaker 2: Does that like, is that also part of its.
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  Speaker 3: Contract Part of contract management will be management, you know
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  Speaker 3: of variations. You know, variations are a significant subject for
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  Speaker 3: discussion about. You know, when people are talking about other contractors,
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  Speaker 3: you know they tend to this amount and then we
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  Speaker 3: ended up paying fifty percent more or whatever. Now there
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  Speaker 3: are good reasons why that might occur from time to time,
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  Speaker 3: and if you have an effective contract management process in place,
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  Speaker 3: then that will help limit the amount of variations or
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  Speaker 3: cost blowouts that you might have on a project. Won't
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  Speaker 3: stop them happening, because there will always be situations where
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  Speaker 3: at the outset, we thought we wanted this, but as
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  Speaker 3: time went on through the delivery, we actually decided well,
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  Speaker 3: you know, we needed something else or something needed to
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  Speaker 3: be changed, et cetera, et cetera. But contract management is
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  Speaker 3: such a such a vital key to it. You know,
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  Speaker 3: let's make sure we're getting what we've contracted to buy.
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  Speaker 2: And so, Dennis, at the moment, are we not really
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  Speaker 2: doing that? Because that is that is.
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  Speaker 1: A big concern, making sure that we're you know, we're
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  Speaker 1: getting like we're getting our bang for our buck.
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  Speaker 2: I suppose.
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  Speaker 3: I would argue that, no, we're not in all instances,
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  Speaker 3: And you know, I've got the benefit of hindsight and
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  Speaker 3: history to look back over the last five years say
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  Speaker 3: and so, well, what does it look like today to
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  Speaker 3: what it might have looked like five years ago. I
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  Speaker 3: can say that with particular agencies, I can see significant
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  Speaker 3: effort having been put in to improve that over the
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  Speaker 3: last five years. With others, I can say probably little
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  Speaker 3: or no effort. But across the government as a whole,
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  Speaker 3: I think there has been more effort in addressing those
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  Speaker 3: issues to make sure we are getting what we're what
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  Speaker 3: we're paying for. Have we got to a point where
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  Speaker 3: we can say, look, the job's done. But the answer
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  Speaker 3: to that is no, are we likely to get to
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  Speaker 3: that point, Probably not, because I think there will always
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  Speaker 3: be instances where we can point to them and say, well,
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  Speaker 3: and we didn't quite get it right on this one
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  Speaker 3: or that one. But there is an improving trend, but
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  Speaker 3: there's still work to be done. You know. One of
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  Speaker 3: the things that really annoys me about poor contract management
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  Speaker 3: and contractor reporting is that I've seen many instances of
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  Speaker 3: contractors not delivering what they were contracted to do, and
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  Speaker 3: because the contract wasn't properly managed and it wasn't reported
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  Speaker 3: back to the contractor for whatever reason, that contractor goes
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  Speaker 3: and wins another contract. Now, the poor performance on the
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  Speaker 3: last contract is not taken into account because it hasn't
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  Speaker 3: been documented. And so what are we actually doing when
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  Speaker 3: that happens? All we rewarding contractors for poor behavior, and
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  Speaker 3: we're actually reinforcing to that contractor, Hey, it's okay not
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  Speaker 3: to deliver what you said you were going to deliver.
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  Speaker 2: Because we'll give you another job.
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  Speaker 3: Happens when that happens, why is he going to change?
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  Speaker 2: Yeah, that's exactly right.
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  Speaker 1: I find it quite astonishing because I think that, you know,
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  Speaker 1: if if you were a private enterprise or even just
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  Speaker 1: a you know, an everyday person who contracts somebody, let's say,
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  Speaker 1: to build your house or to renovate your bathroom or whatever.
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  Speaker 1: If they don't deliver on what you've employed, you know,
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  Speaker 1: what you've contracted them to do.
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  Speaker 2: You're not gonna You're not going to go back and
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  Speaker 2: get them again.
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  Speaker 3: No, that's exactly right.
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  Speaker 1: Yeah, yeah, or Dennis, I find it fascinating. So where
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  Speaker 1: to from here with your with your latest report. I
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  Speaker 1: know that obviously you always do they always, you know,
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  Speaker 1: get taken to the government or have to. I'm assuming
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  Speaker 1: they've got to have a good read through things. Do
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  Speaker 1: they take those recommendations on look, they do not all
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  Speaker 1: of them.
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  Speaker 3: There are things that I recommend that the government says, no,
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  Speaker 3: we're not going to do that. I'll get that. That's
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  Speaker 3: their prerogative. But there are a number of I think
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  Speaker 3: I've made twenty one recommendations for approval, sorry, nineteen recommendations
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  Speaker 3: from improven in my report. The government will look at
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  Speaker 3: those and take the ones on board that they think
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  Speaker 3: need addressing. And I have to say, and I mentioned
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  Speaker 3: it in my report, there's actually a Procurement Framework review
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  Speaker 3: being undertaken by an independent consultant at the moment, and
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  Speaker 3: a number of the recommendations that I've made in my
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  Speaker 3: report will be covered in that review. So at the
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  Speaker 3: outcome of that review, which will be later on this
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  Speaker 3: year sometime, perhaps the government will address some of the
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  Speaker 3: issues I've raised, perhaps they'll reject some of the issues
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  Speaker 3: I've raised. But I look forward to the completion of
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  Speaker 3: that review so that you can get a pretty fair
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  Speaker 3: idea of, you know, whether I need to stop being
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  Speaker 3: on about a particular subject because the government's going well,
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  Speaker 3: we're never going to change that.
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  Speaker 2: Yeah, yeah, fair point.
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  Speaker 1: Well, Dennis Stedman, the nt By local industry advocate. We
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  Speaker 1: always appreciate your time so much for coming on and
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  Speaker 1: having a chat with me this morning.
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  Speaker 3: No, Katie, thanks for the opportunity.
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  Speaker 2: Thank you,