Newspaper article The Observer (Gladstone, Australia)

Buying into Local Policy on Tenders

Newspaper article The Observer (Gladstone, Australia)

Buying into Local Policy on Tenders

Article excerpt

Byline: Helen Spelitis

Our neighbours

Rockhampton Regional Council has two options; businesses with a head office in town receive a 12% weighting, those with a branch receive 8%.

Mackay Regional Council has a 15% weighting.

ONLY one of the three mayoral candidates is in favour of re-introducing a council policy that would give local companies a 10% advantage.

In the lead up to Saturday's election, Gladstone Engineering Alliance canvassed all candidates for their view on bringing back a weighting system for council tenders.

Matt Burnett is the only mayoral candidate in favour of the move; an issue the GEA, a not-for-profit organisation involved with more than 250 businesses, has been pushing for more than a year.

But his views go against those of an expert who says introducing any type of protectionist policy would likely lead to higher prices for the council and leave little incentive for local businesses to become more competitive.

University of Queensland economics professor John Mangan said while he understands regional councils' desire to support small and medium businesses, the weighting policy was just "window dressing".

The idea of a local weighting policy is to make it easier for local companies to secure council tenders by reducing the final price by a percentage.

Before 2012 the council had a local weighting policy but it was abolished after it was found to be relatively ineffective as price only accounts for about 30% of the criteria tenders are assessed against.

In Gladstone local companies already win a majority of the work.

For the last two financial years local companies have won about 60% of all council tenders worth $37 million compared to $24 million awarded to non-local companies.

But Gladstone Engineering Alliance CEO Carli Homann wants to see that number increase.

She says a weighting policy would help drive sustainable economic growth, generate more employment and is particularly important given the council is a "significant" buyer in the region.

Ms Homann has called for the weighting policy to be restored at a minimum of 10%, an idea most of the 21 councillor candidates agreed with. …

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