A $367 billion (US$241 billion) infrastructure pipeline is in jeopardy due to government practices that are negatively impacting small to medium businesses, according to civil contractors representing 40,000 workers.
A report released on April 5 revealed that in New South Wales (NSW), small to medium contractors are facing increased competition from large multinational companies for government construction contracts.
The report noted that contracts valued at less than $50 million (US$33 million) have decreased from 41 percent to 23 percent of all NSW government construction contracts over the past seven years.
Half of the contracts now exceed $500 million (US$330 million), making them unattainable for small businesses.
The Civil Contractors Federation NSW, which commissioned the report, expressed concerns that current procurement processes are detrimental to their members’ businesses.
Chief Executive Kylie Yates stated, “The figures released today highlight the challenges faced by many NSW civil contractors.”
Related Stories
“They are being excluded from government projects due to unfair contract terms and project bundling that favors large multinational corporations.”
The analysis projected a $367 billion pipeline of civil construction work in NSW across all sectors over the next decade, with approximately two-thirds of the funds allocated to regional areas.
Yates expressed concerns about the increasing trend of project bundling by agencies, which could jeopardize the industry’s stability, job security, and increase costs for taxpayers.
“We have a unique opportunity to deliver renewable energy, affordable housing, and connected communities, but this hinges on eliminating unnecessary bureaucratic hurdles,” she emphasized.
The report coincides with a parliamentary inquiry investigating potential reforms to government contracting following concerns raised by the Minns government about the decline of local manufacturing.
During the inquiry, it was revealed that small businesses were losing out due to complex processes, burdensome contractual obligations, or simply a lack of awareness.
Chris Lamont, Small Business Commissioner, highlighted the impact of this situation, stating, “This not only affects businesses but also hampers healthy competition.”
A government spokesperson criticized the previous coalition government for sending jobs and procurement dollars overseas over the past 12 years.
The procurement inquiry aims to rectify these issues and prioritize supporting local workers and boosting the NSW economy with its recommendations,” the spokesperson informed AAP.
