Latest / Best of Business / Katherine Baird: BusinessNZ Director Of Advocacy on the Government overhauling procurement rules

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Katherine Baird: BusinessNZ Director Of Advocacy on the Government overhauling procurement rules · Best of Business

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  Speaker 2: Talking about proposed changes to procurement rules to make it
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  Speaker 2: easier for New Zealand businesses to excuse me for government tenders.
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  Speaker 2: On the phone right now is Catherine Beach. He's the
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  Speaker 2: director of Advocacy at Business end Z. Very good afternoon
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  Speaker 2: to you, Catherine.
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  Speaker 3: Good afternoon, Catherine.
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  Speaker 4: How hard is it for a New Zealand company to
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  Speaker 4: win a government contract?
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  Speaker 3: Look, it can be very challenging, particularly for small to
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  Speaker 3: medium sized businesses. And I couldn't tell you how many
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  Speaker 3: explorers I've spoken to that I have success internationally in
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  Speaker 3: selling their goods and services, but they can't actually sell
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  Speaker 3: here to our government at home. So yeah, this is
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  Speaker 3: a hugely important move and we're big advocates for it.
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  Speaker 4: Is that because you know, the hoops you've got to
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  Speaker 4: go through to get one of these contracts is so expensive,
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  Speaker 4: take so many people and so long, and only really
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  Speaker 4: really giant companies have the bandwidth to do that.
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  Speaker 3: Look, that's definitely part of the challenge. It's expensive to
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  Speaker 3: enter into tenders and typically if there's just one that's
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  Speaker 3: going to take the price, then all the others have
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  Speaker 3: put a lot of time and energy into sunk costs
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  Speaker 3: really that they can't recover. So that's definitely one of
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  Speaker 3: the issues. But I think also, you know, we've we
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  Speaker 3: had a bit of a lease cost mentality in government procurement,
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  Speaker 3: so you just buy the cheap buy on the cheapest price,
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  Speaker 3: and that doesn't take into account quality or local support
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  Speaker 3: and servicing. So we've advocated, you know, they should be
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  Speaker 3: looking at the whole life value of what they're buying.
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  Speaker 2: Clearly is step in the right direction, as you say, Catherine,
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  Speaker 2: But going from seventy one rules to forty seven rules,
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  Speaker 2: forty seven rules still sounds like a very big number.
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  Speaker 2: Is there still more work to do here?
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  Speaker 3: Do you think it does sound like a big number,
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  Speaker 3: doesn't it? And I think the difficulty with the rules,
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  Speaker 3: to be frank is you can have a bunch of
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  Speaker 3: rules that say things that we think sound good, but
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  Speaker 3: how do you actually get procurement managers at the cold
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  Speaker 3: face to interpret those rules and you know, do the
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  Speaker 3: right thing by Keeley businesses. So I think the approach
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  Speaker 3: that they're outlining looks a lot better to me that
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  Speaker 3: a procurement manager would be required to do the economic
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  Speaker 3: benefit test, and I think that'll just put it to
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  Speaker 3: the front of their mind. You know, what jobs could
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  Speaker 3: be created, how much tax will this company pay and
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  Speaker 3: sort of factor that into their decision making.
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  Speaker 4: Do they need any rules at all?
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  Speaker 3: Look, I think you do need some rules, and some
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  Speaker 3: of the rules are about just good hygiene factors, you know,
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  Speaker 3: so how to be fair and transparent with procurement. And
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  Speaker 3: you know, I don't think any of this is intended
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  Speaker 3: to shut out international participants in our supply chains, because
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  Speaker 3: we need them as well, but it might encourage them
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  Speaker 3: to team up with local businesses for that tier two
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  Speaker 3: or Tier three level supplier.
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  Speaker 2: Do you know how we compare to other comparable countries
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  Speaker 2: in terms of those government tenders. Do we make it
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  Speaker 2: a lot harder than other countries to support our own businesses?
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  Speaker 3: I think absolutely we do. So the team Business New
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  Speaker 3: Zealand had a look at some other countries and how
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  Speaker 3: they approach it. We looked at Australia, we looked at
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  Speaker 3: Canada and the United Kingdom, and they all have much
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  Speaker 3: more proactive ways of ensuring that their local businesses get
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  Speaker 3: a fair you know, a fair go at winning some
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  Speaker 3: of that business. They're much more proactive. I think New
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  Speaker 3: Zealand's always you know, probably tilted to the other directions.
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  Speaker 3: I think this will be a good change.
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  Speaker 4: In terms of how waiting the cost towards New Zealand companies.
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  Speaker 4: When you take into account you know, the ability to
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  Speaker 4: build you know, build companies in New Zealand, and you
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  Speaker 4: know the tax advantages and all that kind of stuff.
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  Speaker 4: How much do you think it should be weighted in
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  Speaker 4: the cost? Is it ten percent?
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  Speaker 3: Look, I think that's be interesting. The submissions are open,
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  Speaker 3: and I hope that a lot of businesses put submissions in.
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  Speaker 3: We certainly will be I think, you know, maybe ten
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  Speaker 3: or twenty I think, you know, you have to be
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  Speaker 3: fair to the buying agency and to the taking care
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  Speaker 3: of tax payer money, that there has to be a
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  Speaker 3: good process that they go through. But I think, you know,
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  Speaker 3: giving a ten or twenty percent waiting to the local
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  Speaker 3: business will just bring it to the procurement manager's attention.
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  Speaker 3: It means that they kind of have to evaluate it.
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  Speaker 3: So I think just it's getting getting the business the
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  Speaker 3: local businesses on those people's radars. They still have to
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  Speaker 3: compete with everybody on the other eighty points or ninety points,
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  Speaker 3: So I think that keeps it all on us. But
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  Speaker 3: I think it'll just really mean procurement managers have to
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  Speaker 3: look at local and at least give them good consideration.
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  Speaker 4: As a sort of a chicken and egg thing. We
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  Speaker 4: don't support local businesses so they don't have the scale,
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  Speaker 4: so then we don't use them.
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  Speaker 3: Absolutely. Look, it's fifty one billion dollars spend. I've long
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  Speaker 3: argued that how do we grow bigger companies in New
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  Speaker 3: Zealand on the five million population. That's super difficult. We
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  Speaker 3: need our businesses to get into bigger projects, to have
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  Speaker 3: the confidence to invest in people, in plant and equipment.
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  Speaker 3: How do you do that? You get them involved in
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  Speaker 3: bigger projects. Who does bigger projects? That's central government.
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  Speaker 2: Catherine, thank you very much for your time this afternoon.
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  Speaker 2: Really appreciate it.
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  Speaker 3: Thank you.
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  Speaker 2: That is Catherine bed, Director of Advocacy and Business in
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