A NSW parliamentary committee will inquire into how the government can boost value for money and ensure accountability and ethics in its procurement practices.

The Upper House Standing Committee on Social Issues will investigate a range of issues including how to maximise value for money, increase transparency and accountability, and boost procurement from Aboriginal businesses and businesses owned by women.

It will also look at how to promote better social, economic and labour market outcomes via procurement.

“I am an advocate for governments using their economic weight in publicly funded supply chains to promote better social, economic and labour market outcomes,” Committee Chair Sarah Kaine said.

“This inquiry will consider the potential for procurement to contribute to the social development of the people of NSW, encourage ethical conduct, domestic manufacturing, innovation and inclusion.

“We should not have a situation where companies that attract public funding do not adhere to accepted legal and moral standards of fairness.”

It will also consider how well current procurement arrangements, including standing offers, panels and prequalification schemes, are delivering value for money.

Keeping it local

Government procurement minister Courtney Houssos says the inquiry will address concerns about the loss of local manufacturing and services in government procurement, and look at how to prioritise local jobs and improve training opportunities.

Ms Houssos says a history of relying on interstate and overseas businesses over the last 12 years has resulted in key government contracts leaving NSW.

“We are committed to leveraging the power of government procurement to promote local jobs and foster our local manufacturing industry,” she said.

The NSW government spends around $37 billion a year on goods, services and construction with other suppliers, she says.

A 2021 report by the McKell Institute into the offshoring of major transport projects considered six case studies including the Intercity Fleet, ferries, the B-Line, the Suburban Fleet, the Sydney Light Rail and the Sydney Metro.

It concluded that while engaging international firms for major procurements can lower costs overall, there are broader economic benefits in awarding major government tenders to domestic firms, including direct and indirect job creation.

Thirteen per cent of Australia’s public procurement goes to international bidders, according to the report.

The committee is currently taking submissions and expects to hand down its findings by July 2024.