October 29, 2025 • 38 mins
Australia’s biggest customer isn’t a corporation; it’s the Commonwealth. We sit down with AQMN Legal’s Matthew Bautz to map a practical path for SMEs that want to sell to government without getting lost in rules, panels, and paperwork. Matthew explains why procurement inside Canberra runs on transparency and value for money, not speed. Including how that changes the way you bid, partner, and protect your IP.
We get specific about entry points that work: subcontracting under primes, joining the right panels, and targeting sub-threshold opportunities where agencies can buy faster. You’ll hear how the CPR changes could tilt more work toward Australian businesses and SMEs, why carve-outs and panel dependence still matter, and how to use AusTender as a live radar for who buys what. We also dig into ASDEFCON complexity, the unfair contract terms regime that helps SMEs fight IP overreach, and the uncomfortable truth about limited recourse under the GPJR Act when panels are involved.
This is a playbook you can act on: pick a niche, partner where it lowers risk, deliver flawlessly, and build a track record that makes renewals easy. Then, when you’re ready to scale, look to the United States—larger contracts, deeper programs, and a market that rewards proven value. We share how a planned chamber delegation to Washington, DC can accelerate relationships and help you set up the right onshore footprint.
If you’re serious about winning government work at home and abroad, listen now, subscribe for future episodes, and share this with a founder who needs the roadmap. Got a question or a win to celebrate? Drop us a note and leave a review to help more SMEs find this conversation.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_01 (00:15):
Hello and welcome to the Canberra Business Podcast.
I'm Greg Harford, your host fromthe Canberra Business Chamber,
and I'm joined today by MatthewBouts, the uh one of the
directors of Acumen Legal tounpack the mysteries of
Commonwealth Procurement.
Matthew, welcome to the podcast.
SPEAKER_00 (00:28):
Thanks, Greg.
SPEAKER_01 (00:29):
Um let's start at the beginning.
Acumen, uh, you're one of ourcorporate members, but um tell
us a little bit about what youdo and who's involved.
SPEAKER_00 (00:37):
Um thanks.
So Acumen is a law firm.
We uh we essentially establishedourselves by demand.
We had both of us had actuallymoved out of law um a couple of
years ago.
We were more focused on tryingto do uh growth for businesses,
and then we moved into moreprocurement commercial contract
(00:58):
management uh business advisoryposition in different uh in a
different company based ondemand from some people who we
knew.
Uh, we actually created Acumenbecause people wanted uh advice,
contract reviews, negotiationassistance.
They want to understand uh howto engage with the Commonwealth,
how to deal with otherbusinesses and negotiations and
(01:19):
all of that.
And we thought that you know wedon't want to do it for somebody
else, so we'll do it ourselves.
And we want to focus on, Iguess, growth-focused law.
So, what can we do and whatservices can we provide that are
actually going to be beneficialand help businesses make more
money rather than the cliche lawof just being risk mitigation
and sort of being overlycautious?
SPEAKER_01 (01:38):
Yeah, and that growth mindset is really
exciting.
How long have you been going fornow in the business?
SPEAKER_00 (01:42):
Acumen's relatively new still.
So I think we established itabout two and a half years ago
in July, but it took so long toget some of those initial
regulatory requirements thatit's only about two years now.
So as of the six months after weincorporated, that's when we
started officially uh engagingand doing some uh actual
services.
SPEAKER_01 (02:01):
Yeah, and how's it going over two years?
SPEAKER_00 (02:03):
Yeah, it's it's gorge.
We are surprised by the level ofengagement we've received.
Um, it was definitely assistedby a large client of ours.
Um, we provided a lot ofassistance to them when they
were doing a large defenseprocurement, um, and we're very
proud of this.
We provided a lot of support.
They actually beat LockheedMartin for a massive defense
(02:25):
contract, and we were very, veryhappy because the environment at
that time, similar to now, theenvironment at that time was
that a lot of SMEs andAustralian businesses hadn't won
much work.
And this was a big announcementwhen it came out.
That's a big contract, so wesupported that, and now we have
uh a number of staff full-timeon that engagement.
(02:45):
They're doing awesome work.
Um, we get to pick and chooseour clients as well.
It's not a firm where we'refocused heavily on billables.
We are just trying to focus onsupporting businesses, and we
get to work with CEOs andexecutives and senior managers
of very uh impressive companiesthat are able to do very cool
work, stuff that just we wouldnever be able to do ourselves.
(03:08):
And so when word got out aswell, we've started getting a
lot more interest, um, and we'vegot a new person joining us as
of next week, actually.
And she used to be the specialadvisor to the CIO at Defense,
uh, brings a lot of experience,incredibly uh experienced and
qualified in the technology lawspace.
So it's been exciting, it's beena big learning curve.
(03:31):
Um it was, you know, a newbusiness after all, so there was
a lot to learn and sort of getyour hands on.
But I guess the benefit of thatas well has been we understand
what owners are facing and whattheir actual issues are, and
it's not normal legal adviceyou're getting, you're getting
commercial business focusedadvice that helps the business
grow and focus on things thatare actually worth spending
(03:53):
money on rather than just youknow traditional legal where
it's all about this could be aproblem or that could be a
problem.
SPEAKER_01 (03:59):
And it's it's great to hear that that's um going so
well.
Um and and you're a Canberracompany, right?
Or based here in Canberra?
SPEAKER_00 (04:08):
We are in Canberra, New South Wales, and now also
Queensland.
SPEAKER_01 (04:12):
Excellent.
So expanding from a Canberrabase to take over the country.
We are trying our best.
Fantastic.
Um government procurement,defence procurement are
obviously really, really big andreally important for Canberra
businesses.
Um Do you think that allbusinesses need to be interested
in government procurement andlooking at the opportunities?
SPEAKER_00 (04:33):
I agree, it's it's a massive market.
The Commonwealth government isthe largest client in the
country.
Uh last financial year, I thinkthe numbers were$99.6 billion
was spent in Commonwealthprocurement, uh, which is the
procurement being the purchaseof goods and services.
The year before that was roughly$75 billion.
SPEAKER_01 (04:51):
Um those are massive numbers.
I mean, absolutely huge.
I mean, most businesses um herein the ACT would be turning
over, certainly under a million.
So so that's that's absolutelyhuge and clearly a huge source
of opportunity.
SPEAKER_00 (05:03):
It's a massive source of opportunity.
I mean, those numbers, infairness, we have to put some
qualifiers there.
Uh, between 2012 and 2022, Ithink the overall spend was
about 666 billion.
That is significant.
There is a lot of good that theCommonwealth can do as being a
good purchaser because what theyget to do is determine who gets
the work, what type of work getsout there, uh, and then they get
(05:25):
to put in, you know, some ofthese uh restraints and
compliance obligations, such asthe supplier code of conduct,
which has come out recently.
But it's in relation to yourquestion, I think the most
important thing is everyoneshould be interested in it.
Not everyone should try and havea crack at it, I think.
Um it's important because it'ssuch high-value contracts, but
it's also very important tounderstand that it's a difficult
(05:47):
environment at the moment.
So if people are um purelyrelying on private work,
fantastic.
We would encourage them to havea look at the government work as
well.
If you are able to provide avaluable service uh that is low
risk, the Commonwealth's gonnahave a look at you.
SPEAKER_01 (06:03):
And do you find um, I mean, it is true to say, I
think, that that um governmentspending, government procurement
is really diverse.
It covers the full range ofgoods and services that the
government consumes, right?
So there's there's a myriad ofthings that that fall within
that basket.
SPEAKER_00 (06:19):
Yeah, I mean it's everything.
It's everything from services,from goods, infrastructure, you
know, you've got$10 million warvehicles, you've got syringes,
you've got clothing, footwear,food, cleaning services, you've
got complex ICT construction aswell.
Um I mean it's it's the fullremit of everything.
unknown (06:38):
Yeah.
SPEAKER_01 (06:40):
So, I mean, it sounds um sounds a bit like a
golden goose in some some ways.
Um, you know, uh get a bigcontract with government and and
uh the world's your oyster, butum obviously it's not that
simple and not thatstraightforward.
What are some of the issues thatyou have encountered or that
you've seen with your clientsover the last couple of years?
SPEAKER_00 (06:57):
Oh, that's a that's a big one.
Um so straight away I agree.
It is it looks appealing, but Ithink there is something that
everyone has to understand, andthat's it's that Commonwealth
procurement is not privatesector procurement.
Private sector procurement isdefinitely a financial function,
I understand that, butcommonwealth procurement is more
of a commercial regulatoryfunction.
(07:18):
They buy goods and servicesbecause they have a need they
have to fulfill, and they arepurchasing this with taxpayer
money.
As a result of that, what theyneed to do is make sure that
they are spending their moneytransparently and there is
accountability for poorprocurement practices.
They also want to make sure thatwhoever is getting the work are
ethical companies that do nothave judicial decisions against
(07:41):
them, especially as it relatesto unplayed employee
entitlements.
There are a range of differentprocurement connected policies
that people need to abide by aswell, and it can take a very
long time to get governmentwork.
So I want to give you an exampleof this.
DroneShield is a absolutelyphenomenal Australian company.
(08:02):
They are probably one ofAustralia's golden child in
terms of uh impressiveness.
They are known all around theworld.
It is an Australian business,it's absolutely impressive, and
they have so much work overseas,and they have not that many
contracts in Australia.
And that is not something we saylightly because you look at
Ukraine, drone shield have beeninvolved from the beginning.
(08:25):
Everyone knows they are the bestwhen it comes to counter UAS
services and goods.
Um they have million,multi-million dollar contracts
in the United States throughoutEurope, and them getting work
here is proving very difficult.
And obviously, that is notsomething I say lightly because
it might dissuade other peoplefrom trying to provide services
(08:47):
and goods to the Commonwealthbecause if you're not if they're
not a drone shield, well, ifdrone shield is struggling, what
chance do other people have?
SPEAKER_01 (08:53):
Yeah, and that's a complaint I hear quite often
that often it's easier for firmsto get work uh overseas and
export services rather thanproviding them here to the
Commonwealth.
Um, why do you think that is?
SPEAKER_00 (09:06):
I'll be careful on how I say this.
I think there's a lot of goodthat the Commonwealth government
tries to do in terms of itsprocurement practices.
However, there is a lot of thereis a requirement for the
procurement teams to upskill.
Uh, this was not a personalview.
This is a re a view from areport that came out uh in
(09:26):
September 2023 called Report498, and it basically said that
Commonwealth procurement needsto professionalize.
It's not a it's not a pathwaythat most people choose to go
down.
A lot of people find themselvesin this area.
And when I say that, I foundmyself in Commonwealth
procurement.
I had never even considered orheard of it before I found
myself there.
But it's a complex area.
(09:48):
You deal with everything fromyou know getting people into
clean buildings to purchasingF-35 jets, which are some of the
coolest jets in the world.
So it's just it's just thebuying of goods and services by
the Commonwealth.
There is a difficulty that the,and I don't know why, but the
Commonwealth has in terms oftheir risk appetite.
(10:09):
They're not a fantastic buyer.
Some of them are excellent, andother groups don't understand
what they should be looking for.
They don't understand what theirrequirements should be, and
that's the I want somethingversus I need something that
gets conflated all the time.
And then it's also just notknowing who to go to.
Uh, and a common complaint wehear, and I've heard it when we
(10:32):
were on that New Zealand tradedelegation mission that you guys
hosted, there is a requirementthat people need to go and
network.
They need to introducethemselves, they need to market,
they need to let the governmentknow who they are, what they do,
and how they can sell or bebought, um, how the Commonwealth
can buy from them.
(10:52):
So it's it's interesting becausewe don't exactly understand why
Australian businesses find it sodifficult to sell to the
Australian government.
We do see a lot of internationalbusinesses selling a significant
number of um goods and servicesto the Australian government,
and we are seeing an increase inthe number of um Australian
(11:14):
businesses that are having toexport their product, and
they're finding essentiallybetter opportunities in the US
markets, UK and Europe, um, inthe UAE.
Opportunities overseas areproving quite lucrative.
I mean, for example, again,Drone Shield, they've got the
majority of their contracts areinternational.
SPEAKER_01 (11:34):
You touched on the question of visibility with
government officials.
Have you got any advice forfirms on how they can try and uh
market themselves or at leastmake officials aware of the
services they offer?
SPEAKER_00 (11:46):
Yeah, I I do.
The number one tip we have hereis the best BD you can do is
good delivery.
That's that's the number one.
If you are very good at what youdo, people will hear about you.
So I guess what that means isyou need to find a way into the
government.
And if it depends on who you areand depends on what you're
doing, and as we say,procurement is such a
(12:06):
significant area.
If you're trying to do defense,if you're trying to provide
services or goods to defense,then and you're an SME, your
best avenue for doing this iseither partner or subcontract
through the primes.
Uh, and there's uh you know,there's nine primes or something
like that that defense um usemajority of the time.
And there's the global supplychain programs.
(12:28):
There's also the MSP arrangementas well, um, it's a managed
service provider.
You also have other largerorganizations and medium
organizations that have largecontracts and they need
expertise to come in.
So if you're providing ageneralist service, it's gonna
be more difficult.
If you have a niche product thatnobody else has, you're gonna
find it much easier.
So that's why in the beginning,when I'm saying everyone should
(12:50):
look at this, but not everyoneshould apply for it, there's a
reason, and that's because youneed to go out of your out of
your comfort zone, you need totalk to people, go to these
networking events, you need totry and subcontract initially.
If you can get your hands on adirect contract, that's
fantastic.
All kudos to you.
I'm glad you're able to do that.
But most of the time you're notgonna be able to do it.
(13:10):
So you're gonna subcontract yourway in through these other
providers.
And if you're doing that, again,give the best possible service
you can, if we're talking aboutservice firms, give the best
possible service you can, andthat company's gonna want to use
you again.
I mean, everyone's in it forthemselves.
Um, it's a it's a business, theyhave to be profit-focused.
And if you're a business, so putyourself in the shoes of these
(13:31):
larger companies, if you have asubcontractor who is low risk,
doesn't cost that much money,and they are delivering an
exceptional value, you're gonnawant to use them every single
time.
And people can build upfantastic relationships.
I know of a company that's gotabout 60 people, and they don't
have any direct contracts withthe Commonwealth, they
subcontract all of theirresources in.
They don't have a problem withit.
(13:52):
So people trying to find theirfeet for the first time, they
shouldn't have a problem withthat either.
SPEAKER_01 (13:58):
Now we've talked about um some of the challenges
associated with governmentprocurement, but what are what
are some of the positives?
SPEAKER_00 (14:05):
I guess the positives are if you're able to
get yourself a governmentcontract and you are delivering
a valuable service, theCornwall's gonna see that and
the Cornwall's gonna want to useyou again because again, they
don't want to have to go out anddo these complicated procurement
processes which take a lot oftime uh and expertise.
Sometimes they have to get inexternal providers to come and
actually run some of theseprocesses.
(14:25):
They're subject to error, theyhave to restart it on occasion,
and that's just part and parcelof you know doing work.
People make mistakes.
The most important thing is ifyou do good work, you're gonna
have a long-term client.
And if you keep doing right bythem, you're gonna get repeat
work, and that's gonna give youthis massive opportunity to
grow.
And if you're able to dogovernment work and you have
(14:46):
private work, it's gonna put youin the best position to expand.
And we know, we know firms, um,so for example, Birdon, they
came and did a presentation fora different group quite some
time ago, and they made it veryclear that what's gonna be very
important for businesses is todo both government and private
work.
And they were saying that theAustralian environment's very
(15:07):
different.
It's very, they described it, Ibelieve, as you're a wolf on the
plains.
You are scrapping for food, andit's very competitive.
And then they went overseas tothe US and they said obviously
they were very good at what theydid, they worked very hard, but
they went over to the US andthey said their first contract
there was worth more than anycontract they had ever received
(15:28):
in Australia.
SPEAKER_01 (15:29):
Yeah, and there's a question of scale, right?
I mean, so the AustralianCommonwealth procurement is is
big for Australia, um, butAustralia is still only a
middle-sized power on a globalbasis.
SPEAKER_00 (15:41):
So I had a conversation this morning uh on
this exact point, and I thinkit's a it's a great point.
One of the issues defence has isit's the largest department in
Australia, so it thinks it's gotreally solid bargaining power
when it's dealing with some ofthese larger organizations.
When it comes to Australianorganizations, they do.
They have the most bargainingpower, uh, and that's completely
understandable.
(16:02):
But they will go and they'lltalk to you know one of the
major primes, and they will tryand say, you know, these are our
terms, take it or leave it ifyou want this hundred million
dollar contract.
And some of these primes arewilling to walk away from that
because they've gotbillion-dollar contracts with
the US government, for example.
Um, so you know, Australia, Ithink when two years ago or two
financial years ago, when it was70, roughly$75 billion in the
(16:25):
annual procurement spend,defence was about 52% of that.
So roughly$35 billion or$37billion, roughly, whatever the
numbers are.
That is not even the annualrevenue of some of these larger
organizations.
So Defence is massive in termsof the opportunity it could
provide to Australianbusinesses, especially SMAs.
(16:46):
But when you go overseas, themarket is significantly more.
SPEAKER_01 (16:51):
And does that create a challenge for Aussie
businesses that are looking togo offshore, do you think?
Or or is it just more of anopportunity?
SPEAKER_00 (17:01):
I believe it's an opportunity.
I think the the challenge thereis it's complicated and it's
scary, and people don't knowwhat they're doing.
Um, I mean, if if you're in thedefense industry again, this is
what Acumen does.
We are defense industry focused.
Uh we do some probity andcompliance work for some
government departments, butprimarily 99% of the work we do
is is aimed at private industry,especially those trying to do
(17:24):
work with the Commonwealth, andour expertise is within the uh
Department of Defense.
So trying to engage with theDepartment of Defense, that's
us.
Um, and if people are trying togo overseas, well, we can help
them with that.
Uh, Canberra Business Chambercan help them with that, Ostrade
can help.
Um, there's a lot of otherorganizations that are willing
to help even have discussions.
(17:44):
And so, land forces, forexample, if you go to land
forces, you can walk around, youcan find somebody else.
The people from these stands whoare Australian businesses who
are now providing um servicesand goods overseas, they're more
than willing to have a chat andto give some tips and advice.
And one of the most importantthings we got told was Ostrade
is set up to help with this.
(18:04):
I mean, it you need to reach outto them, you have to have a
crack, essentially.
But it shouldn't be scary forbusinesses and it shouldn't be
an impediment.
It should just show theopportunity that exists overseas
as well.
But if you're not even doingbusiness with in Australia and
you haven't even contemplateddoing business for the
Commonwealth, because Icompletely understand some of
the contracts you see are huge.
(18:25):
I mean, we're ranging fromcontracts between eight pages,
which some people still considerto be a lot, to contracts that
are a thousand pages.
Um I mean, when you're dealingwith defense, you've got the as
DEF CON contracting suite, andthat is very, very complex.
But if you're able to get adefense contract using as DEF
CON, I mean your business isgoing to be you're doing okay.
So as DEF CON stands for theAustralian Defense Contracting
(18:48):
Suite.
It is a suite of differentdocuments used for construction,
services, goods, all the wayfrom simple purchase orders up
to complex um procurement.
So for example, we're trying toget submarines.
Um I mean, if we're using as DEFCON templates, we would use the
comp uh as DEF CON complexdocuments for those ones.
(19:10):
I mean, these are documents thatmight take teams of lawyers
years to put together andnegotiate.
So when we're talking about someof the Canberra Business Chamber
members, it's going to be thesmaller contracts, and they
might, some of the mostcomplicated ones they have to
deal with will be the services,the ASDEFCON services suede.
(19:30):
What we usually recommend forpeople is, and what we usually
provide advice on, is justaccept what you can get from the
Commonwealth and just show themhow valuable your services are.
Um and then once you've done ita few times, then you can start
looking to negotiate.
There's always things to watchout for, and the main one as
well as the intellectualproperty, especially when you're
dealing with large organizationsand primes.
(19:52):
We have seen SMEs who offer anabsolutely fantastic product.
Um, and this we did a recentnegotiation with one of them.
They offered a fantasticproduct, and they were working
with one of the larger primes,and the prime essentially wanted
all the intellectual propertythat went with it.
We're saying you absolutelycan't have that.
This business doesn't existwithout this product.
You want the product, you canhave a license to it, but that's
(20:14):
about all you can have.
And in Australia, we are a verybureaucratic state.
We have a lot of rules andregulations, and some of this is
absolutely fantastic for SMEs.
You got the unfair contractingsway, uh, unfair contracting
term regime.
Um the UCTs changed, I think itwas last November or even maybe
two Novembers ago, time flieswhen you're absolutely smashed.
(20:35):
What it does is if you're doingbusiness with within Australia,
it's a standard form contractand you're dealing with a small
business, these terms that usedto be uh held as unenforceable,
they now attract massivepenalties for companies.
So we've seen it's uh it'sactually one of the bits of
regulation that's been broughtin that I think has provided the
(20:57):
most benefit for Australianbusinesses and for SMEs.
Now, when you're dealing withother Australian businesses and
other SMEs, obviously it getsquite annoying.
But when you're dealing withsome of these larger
organizations, especially thosethat only have a presence in
Australia and they're notAustralian, they don't know.
And some of their teams are justtrying to get the work done.
They provide a standard form,people think they need to accept
(21:17):
it, and then we've come in andwe've managed to say to them,
no, you don't need to acceptthis.
And hey, it's actually aneducation piece now.
Hey, prime, you can't do this,or else you're going to get a
massive fine if the relevantregulatory body finds out,
they're more than happy tochange those because they just
didn't realize.
So there is sometimes an unfairperception, be it you know
(21:38):
within Commonwealth departmentsas to consultants and
contractors, be it from SMEstowards some of the larger
vendors.
You need to be careful whenyou're dealing with them, but
most of the time they just wantto deliver and they're competing
against other groups.
So they want to provide aproduct that is um you know
better and cheaper and morevaluable than their competitors.
And so if you can show yourselfas a good subcontractor or a
(22:00):
good supplier, you will haverepeat work.
SPEAKER_01 (22:04):
Now you mentioned a moment ago that Australia is a
fairly bureaucratic country.
Um there's lots of rules andregulations, right?
Um but I understand there's somechanges coming up in
mid-November to the Commonwealthprocurement rules.
Do you want to just unpack thosefor us a little bit?
What is it that members andother businesses need to know?
SPEAKER_00 (22:22):
No, it's a great segue.
Um it's actually coming up uh 17November 2025.
So the when we're talking aboutCommonwealth procurement, it's
the purchasing of goods andservices.
These this entire system isgoverned by the Commonwealth
Procurement Rules.
Now it's not just the CPRs, youalso have procurement connected
policies, you have internaldepartment AAIs, you have the
(22:43):
PGPA Act, you've got the GPJRAct, there's a lot out there.
But the primary set of ruleshere is the Commonwealth
procurement rules.
The and which we call them theCPRs.
So they are the government'srulebook for how contracts are
formed, how the procurementshould proceed, and how people
should be treated, essentially.
The primary purpose of the CPRsis to is the pursuit of value
(23:08):
for money outcomes.
Value for money is a is adifficult term to define because
there's no one size fits all.
What's value for money for onedepartment is different for
another.
What's value for money for onedepartment, one specific
procurement might actually bedifferent for a separate
procurement within the sameteam, within the same
department.
It all depends on what therequirements are.
(23:28):
Essentially, if you are aprocurement official, your
obligation for the department isto undertake a procurement
ethically, compliantly, and toobtain value for money
solutions.
This is the best use of taxpayermoney, and this is what the
procurement officials anddelegates, they they know all of
this, and this is what the CPRsguide and essentially regulate
(23:50):
this environment.
The CPRs also talk about opentender versus limited tender.
It talks about uh what isethical, it talks about uh you
know a range of differentrequirements.
What we find very important isif you're an SME and if you're
an Australian business, you havea lot of opportunities under the
CPRs to engage with theCommonwealth directly without
(24:12):
the Commonwealth having tofollow additional rules.
So there are Appendix Aexemptions, and very recently
there was some governmentchange, maybe it was July last
year, I can't remember off thetop of my head, there were some
changes where the Appendix Aexemption 17, I believe,
increased to$500,000.
So if you're an SME, which meansgovernment departments are
(24:34):
allowed to approach SMEs forcontracts worth up to$500,000
directly without having to do anopen tender.
And I thought that wasfantastic.
Um we are seeing some hesitationto it because there has also
been a cut down on the number ofuh consultants and contractors.
This seems to be more in theabove-the-line space rather than
below the line.
(24:55):
So if you are a small businessproviding below-the-line
services, um just be aware thatif there is a delegate you're
talking to and they areinterested in the product or
service you have, they canengage you directly using this
exemption.
So the CPRs regulate the entireprocurement uh environment.
There are changes coming inNovember.
Now, these changes, we have towait to see if they're going to
(25:18):
be good.
They are being stated as beingonly focused or heavily focused
on providing support forAustralian businesses and SMEs,
but the wording of the CPRsdoesn't actually, or the
proposed CPRs, I should say,doesn't actually support what
they're saying.
So I'll start with a good, Iguess.
That's probably always the bestplace to start.
(25:39):
So there's going to be mandatoryrequirements for some
procurement officers, or for allprocurement officers, sorry, to
um have the rule here.
For procurements with anexpected value at or uh$10,000,
above$10,000 and below therelevant procurement threshold,
excluding procurements from astanding offer, non-corporate
(26:02):
Commonwealth entities, which isdefense and other organizations
like that, they must invite onlyAustralian businesses to make
submissions.
So that's between 10,000 and thenew threshold, which would be
$125,000.
So between$10,000 and$125,000,procurement officials must only
invite Australian businesses tomake submissions.
(26:22):
Now, obviously, that isfantastic news for Australian
businesses and for CanberraBusiness Chamber members.
There is another rule which isfor SMEs.
So for procurements withexpected value below$125,000
from the Management AdvisoryServices Panel, the people
panel, or any standing offermanaged by the DTA, these same
type of departments, must inviteonly SMEs on the relevant
(26:44):
standing offer to makesubmissions.
And because these are notexceptionally high value
contracts,$125,000, that's goingto make it much easier for SMEs
to get that initial engagement.
The problem with this, these twopoints, however, and this is
what my issue with them sayingit's you know fantastic for SMEs
and it's only good things, thereare carve-outs in these exact
(27:05):
two rules.
So 5.4 and 5.5, they have asubsection C for both of them
that says a procurement officialmight determine that they don't
need to approach an Australianbusiness or don't need to
approach an SME.
So it's not like a must.
It kind of defangs it a littlebit.
Completely.
And you just have to record thedecision.
There's no guidance on what thedecision should be, what the uh
criteria for a decision shouldbe.
(27:26):
So I I do I don't like that.
I understand why they've put itin, but there isn't that stick
anymore, uh, that it's a must.
And so that is quitedisappointing.
Uh the other problem is you haveto be on these panels.
And getting on a panel isincredibly time consuming and
it's difficult.
And I know that Senator DavidPocock has made a lot of noise
(27:48):
recently about the inappropriateuse of panels.
Uh that is, I guess, my first orsecond recommendation for your
members would be step one wouldbe to subcontract or partner or
use other organizations.
Step two, try and get yourselfon a panel.
Panels aren't always open,they're only open every couple
of years.
(28:08):
The DTA is doing a better job ofthis because they are doing
constant refreshes to theirlarger panel.
But uh, some of the otherpanels, you'll, if you don't
miss out, three or four years ishow long you have to wait before
you can actually uh apply for itagain.
So it's it's really damaging forthe long-term longevity of a
business if you don't get on thepanel.
SPEAKER_01 (28:27):
So, how do businesses know when a panel is
open?
SPEAKER_00 (28:31):
The panels will always be advertised, and it's I
would say it's the obligation uhand responsibility of every
business to constantly scourOSTender.
Um, I guess for some of yourmembers who don't know what
OzTender is.
Oz Tender is the government's uhessentially panel process.
It is it records every single umcontract above a certain
(28:54):
threshold that has been enteredinto.
It also releases or advertisesfor all open tender approaches.
If the Commonwealth is doing anopen tender approach, it must
advertise it through OSTender.
So we highly recommend if theydon't have an account, it's
free.
Create an account, get onOSTender, scour it.
It's so useful because what itallows you to do is see who's
(29:16):
winning work, who's issuingcontracts, what type of work's
being issued, and allows you torestructure or refocus your
attention on some of these areasthat you can see are lucrative,
especially if you're working ina space that just doesn't make a
lot of money at this point intime.
SPEAKER_01 (29:31):
Is there anything else in the changes to the
Commonwealth procurement rulesthat you want to draw to
people's attention?
SPEAKER_00 (29:38):
There's going to be an increased focus on the
economic benefit.
Uh there's also going to be thenthe thresholds have moved up as
well, and they're now supportingand they've included the
Australian business test, sothey'd redefined what an
Australian business is.
Unfortunately, as well, they'veremoved the protection.
(30:00):
Of discrimination from therelevant provision in Division I
of the of the CPRs, and they'vemoved that over into Division
II.
And so now we actually might seea position, it depends on how we
go moving forward from November.
We might see a situation whereSMEs are being discriminated
against due to their size, andit's no longer something that
the vendors can put their handup and say, hey, we've got a
(30:22):
valid complaint now becausethey've removed it.
So they haven't removed it fromthe CPRs, but they've moved it
to Division II.
To sum it up very quickly,because it's a complicated
document, division one appliesto all procurements, division
two only applies to certainprocurements.
If you're a government uhdepartment and you're releasing
(30:43):
a procurement through a panel,division two doesn't apply.
So the recourse you have for aCommonwealth procurement rules
breach is questionable.
You can make some noise, and wesee breaches every day, and we
see the ANAO constantlyreleasing reports where they say
the CPRs were not followed orthey were breached and nothing
(31:06):
happens.
And this is, in my view, it's anabsolute disgrace because that's
taxpayer money that's being usedand it's not being used
effectively.
I believe the ANAO said in areport that roughly 54% of all
contracts over a three-yearperiod, those procurements were
either partly effective or notat all effective.
So you can imagine even one yearof$99.6 billion, 1% is 996
(31:31):
million.
We're saying up to 51 or 54%isn't partly effective or not
effective.
We have a recourse forsuppliers, and this is something
that I've been advocating for,and I understand other
organizations are now alsomaking some noise about.
You had the GovernmentProcurement Judicial Review Act.
That was brought in in 2018,came into effect in 2019.
(31:55):
That same year where it was itcame into effect, the CPRs were
amended so that if you are if aprocurement was released through
the panels, Division II nolonger applied, and it's no
longer a covered procurement.
So you can only make complaintsif the CPRs are breached, if
it's a covered procurement.
So if it's through a panel, it'snot a covered procurement, and
(32:16):
81% of all contracts were over athree-year period according to
the ANAO were released viapanels.
So that recourse isn'tavailable, especially for SMEs,
for any panel procurement.
And it's it's just a positionnow where for those people who
did have this avenue for SMEdiscrimination, it doesn't exist
anymore because it's now inDivision 2.
SPEAKER_01 (32:35):
So, what is your advice for people who might feel
aggrieved by a decision or anoutcome through the Commonwealth
procurement processes?
SPEAKER_00 (32:44):
Primarily you've got to make a commercial decision.
Um, we're commercial lawyers, wewe won't give advice, which we
won't follow ourselves.
You can make noise, but you haveto be careful because if you
make too much of the wrongnoise, you might be you know
biting the hand that feeds you.
However, we've got someone inthe ACT, for example, who likes
to make noise about this, andit's Senator David Pocock.
(33:04):
We highly recommend, if you'renot in the ACT and you're
listening to this, find who yourrelevant member is and write
letters to them, complain tothem, let them know what's
occurring.
I think if there is asignificant enough breach and
you can make enough noise, youwill see recourse from it.
And also a lot of the time, someof the departments they will be
apologetic.
Uh maybe in the future you'llyou'll see something more
(33:26):
positive as a result, but rightnow there is no immediate
recourse.
If they even acknowledge thatthey breach the CPRs, it's uh,
oh, sorry about that.
And and that's it.
If they have evaluation criteriaand they don't follow the
evaluation criteria, nothing,nothing happens at this stage.
Um the that act I was talkingabout, the GPJR Act, came into
(33:46):
effect in um 2019.
There's been zero decisionsunderneath it.
That's interesting in itself.
It's fascinating.
Yeah.
SPEAKER_01 (33:54):
So look, there's obviously a few negatives in
there, but but obviously a lotof positives in government
procurement as well.
So um, if you had sort of onepiece of advice for businesses
looking to engage with theCommonwealth, what would it be?
SPEAKER_00 (34:09):
One piece of advice I guess is hard.
I would say don't try and don'ttry and have it all.
Subcontract, partner, anddeliver your best work.
The Commonwealth is primarilyinterested in purchasing
valuable services that are lowrisk.
So if you can show that yourservices are valuable or your
goods are valuable and that youare a low-risk supplier, you're
(34:32):
going to get more work in thefuture.
I would also recommend you needto be patient.
You need to understand thatthese type of contracts take
longer than your traditionalbusiness-to-business contracts.
Um, but if you're willing to bepatient, you're willing to put
in the work, you might see someof these contracts, and that's
going to be absolutely fantasticfor your business.
I would say if you don'tunderstand what you're doing in
(34:52):
the Commonwealth procurementspace, come talk to us if you
want.
Um because you you don't want toput all this time and effort
into a procurement if you haveno chance of winning.
And we are very experienced inthis area.
So if you are trying to bid forsomething, come talk first.
Because before you spend 40, 50hours putting the best
submission forward that you can,you're going to want to make
(35:14):
sure you're actually going to becompetitive for it.
And I guess the other part isdon't half-ass anything.
A lot of people are trying tobid for everything, and they're
putting average uh tenderresponses out.
It would be better for you toapply for one procurement that
you put your heart and soul intothan into a hundred procurements
where you think, okay, we'lljust put this in and see how we
(35:36):
go.
Um again, go to the networkingevents.
Uh, Canberra Business Chamberhas lots of networking events.
Partner with people, subcontractto people, and deliver your best
services you can.
SPEAKER_01 (35:45):
Matthew, the chamber is looking to take a delegation
to Washington, DC next year toinvestigate some of the defense
and government procurementopportunities available over
there in the States.
Um are you keen to sort of beinvolved in that and and how
successful do you think that'sgoing to be?
SPEAKER_00 (36:01):
I'm very excited for that.
I'm very keen to be involved.
The recent trip you did to NewZealand, I I know that it
resulted in some contracts forsome of the Canberra Business
Chamber members.
Uh, Washington is asignificantly larger uh area
than New Zealand is, andobviously when I say Washington,
I mean all of the United States.
If you're serious about doingbusiness overseas, this would be
(36:23):
an absolutely fantasticopportunity.
And I we know a couple of ourclients that we're already
dealing with who have defensecontracts, they're all gearing
up to get ready for this.
They're very, very excited aboutthe prospect of doing business
in the United States.
It does mean, under the currentadministration over there, that
you're probably gonna have toestablish a United States
business.
That's fine.
That's not something that shoulddissuade you from trying to do
(36:45):
it, but it's definitelysomething that's exciting.
It's a massive opportunity.
Um, and it also gets to show theUnited States that you know
there is a lot of exceptionaltalent and hardworking people in
Australia, and you know, we'rehungry for work, we want to do
the work, and if given theopportunity, we can deliver high
quality work.
So we're very excited.
(37:05):
All the clients who uh we'vespoken to in the defense space
are very excited about this.
All your members, as far as I'maware, should be very excited
about it as well.
It's a great opportunity, uh,and we highly encourage everyone
to um put their hand up and saywe're we're interested.
SPEAKER_01 (37:19):
Yep.
And you've got to be in marketto build relationships and make
those connections ultimately,right?
SPEAKER_00 (37:23):
Absolutely.
You have to do traditional BD.
I know there's been a bit of uhhesitation towards picking up a
phone or actually talking peopleface to face because of COVID.
You can't do business just overemails.
You have to call people, youhave to maintain relationships,
you need to go to these events.
This and such an event like thisis is once in every you know
years.
It's we haven't seen the lasttime that something like this
(37:44):
was hosted, and you get to goover with a number of other
companies from Australia aswell.
It's a great opportunity, um,and it's it's could be massive
for some companies.
SPEAKER_01 (37:53):
Yeah, and if any of our listeners do want to know
more about that, get in touchwith the chamber.
Uh, you can find the details onour website at Canberra
Business.com.
Some great advice there.
Thank you very much.
Um, this is the CanberraBusiness Podcast.
I'm Greg Harper from theCanberra Business Chamber, and
I've been talking to MatthewBouts from Acumen.
Um, Matthew, thank you so muchfor joining us today.
SPEAKER_00 (38:12):
Thank you, Greg.
Thanks for having me.
SPEAKER_01 (38:14):
Uh, don't forget to follow us on your favorite
podcast platform for futureepisodes of the Canberra
Business Podcast, and I'll catchyou next time.
Hello and welcome to the Canberra Business Podcast.
I'm Greg Harford, your host fromthe Canberra Business Chamber,
and I'm joined today by MatthewBouts, the uh one of the
directors of Acumen Legal tounpack the mysteries of
Commonwealth Procurement.
Matthew, welcome to the podcast.
SPEAKER_00 (00:28):
Thanks, Greg.
SPEAKER_01 (00:29):
Um let's start at the beginning.
Acumen, uh, you're one of ourcorporate members, but um tell
us a little bit about what youdo and who's involved.
SPEAKER_00 (00:37):
Um thanks.
So Acumen is a law firm.
We uh we essentially establishedourselves by demand.
We had both of us had actuallymoved out of law um a couple of
years ago.
We were more focused on tryingto do uh growth for businesses,
and then we moved into moreprocurement commercial contract
(00:58):
management uh business advisoryposition in different uh in a
different company based ondemand from some people who we
knew.
Uh, we actually created Acumenbecause people wanted uh advice,
contract reviews, negotiationassistance.
They want to understand uh howto engage with the Commonwealth,
how to deal with otherbusinesses and negotiations and
(01:19):
all of that.
And we thought that you know wedon't want to do it for somebody
else, so we'll do it ourselves.
And we want to focus on, Iguess, growth-focused law.
So, what can we do and whatservices can we provide that are
actually going to be beneficialand help businesses make more
money rather than the cliche lawof just being risk mitigation
and sort of being overlycautious?
SPEAKER_01 (01:38):
Yeah, and that growth mindset is really
exciting.
How long have you been going fornow in the business?
SPEAKER_00 (01:42):
Acumen's relatively new still.
So I think we established itabout two and a half years ago
in July, but it took so long toget some of those initial
regulatory requirements thatit's only about two years now.
So as of the six months after weincorporated, that's when we
started officially uh engagingand doing some uh actual
services.
SPEAKER_01 (02:01):
Yeah, and how's it going over two years?
SPEAKER_00 (02:03):
Yeah, it's it's gorge.
We are surprised by the level ofengagement we've received.
Um, it was definitely assistedby a large client of ours.
Um, we provided a lot ofassistance to them when they
were doing a large defenseprocurement, um, and we're very
proud of this.
We provided a lot of support.
They actually beat LockheedMartin for a massive defense
(02:25):
contract, and we were very, veryhappy because the environment at
that time, similar to now, theenvironment at that time was
that a lot of SMEs andAustralian businesses hadn't won
much work.
And this was a big announcementwhen it came out.
That's a big contract, so wesupported that, and now we have
uh a number of staff full-timeon that engagement.
(02:45):
They're doing awesome work.
Um, we get to pick and chooseour clients as well.
It's not a firm where we'refocused heavily on billables.
We are just trying to focus onsupporting businesses, and we
get to work with CEOs andexecutives and senior managers
of very uh impressive companiesthat are able to do very cool
work, stuff that just we wouldnever be able to do ourselves.
(03:08):
And so when word got out aswell, we've started getting a
lot more interest, um, and we'vegot a new person joining us as
of next week, actually.
And she used to be the specialadvisor to the CIO at Defense,
uh, brings a lot of experience,incredibly uh experienced and
qualified in the technology lawspace.
So it's been exciting, it's beena big learning curve.
(03:31):
Um it was, you know, a newbusiness after all, so there was
a lot to learn and sort of getyour hands on.
But I guess the benefit of thatas well has been we understand
what owners are facing and whattheir actual issues are, and
it's not normal legal adviceyou're getting, you're getting
commercial business focusedadvice that helps the business
grow and focus on things thatare actually worth spending
(03:53):
money on rather than just youknow traditional legal where
it's all about this could be aproblem or that could be a
problem.
SPEAKER_01 (03:59):
And it's it's great to hear that that's um going so
well.
Um and and you're a Canberracompany, right?
Or based here in Canberra?
SPEAKER_00 (04:08):
We are in Canberra, New South Wales, and now also
Queensland.
SPEAKER_01 (04:12):
Excellent.
So expanding from a Canberrabase to take over the country.
We are trying our best.
Fantastic.
Um government procurement,defence procurement are
obviously really, really big andreally important for Canberra
businesses.
Um Do you think that allbusinesses need to be interested
in government procurement andlooking at the opportunities?
SPEAKER_00 (04:33):
I agree, it's it's a massive market.
The Commonwealth government isthe largest client in the
country.
Uh last financial year, I thinkthe numbers were$99.6 billion
was spent in Commonwealthprocurement, uh, which is the
procurement being the purchaseof goods and services.
The year before that was roughly$75 billion.
SPEAKER_01 (04:51):
Um those are massive numbers.
I mean, absolutely huge.
I mean, most businesses um herein the ACT would be turning
over, certainly under a million.
So so that's that's absolutelyhuge and clearly a huge source
of opportunity.
SPEAKER_00 (05:03):
It's a massive source of opportunity.
I mean, those numbers, infairness, we have to put some
qualifiers there.
Uh, between 2012 and 2022, Ithink the overall spend was
about 666 billion.
That is significant.
There is a lot of good that theCommonwealth can do as being a
good purchaser because what theyget to do is determine who gets
the work, what type of work getsout there, uh, and then they get
(05:25):
to put in, you know, some ofthese uh restraints and
compliance obligations, such asthe supplier code of conduct,
which has come out recently.
But it's in relation to yourquestion, I think the most
important thing is everyoneshould be interested in it.
Not everyone should try and havea crack at it, I think.
Um it's important because it'ssuch high-value contracts, but
it's also very important tounderstand that it's a difficult
(05:47):
environment at the moment.
So if people are um purelyrelying on private work,
fantastic.
We would encourage them to havea look at the government work as
well.
If you are able to provide avaluable service uh that is low
risk, the Commonwealth's gonnahave a look at you.
SPEAKER_01 (06:03):
And do you find um, I mean, it is true to say, I
think, that that um governmentspending, government procurement
is really diverse.
It covers the full range ofgoods and services that the
government consumes, right?
So there's there's a myriad ofthings that that fall within
that basket.
SPEAKER_00 (06:19):
Yeah, I mean it's everything.
It's everything from services,from goods, infrastructure, you
know, you've got$10 million warvehicles, you've got syringes,
you've got clothing, footwear,food, cleaning services, you've
got complex ICT construction aswell.
Um I mean it's it's the fullremit of everything.
unknown (06:38):
Yeah.
SPEAKER_01 (06:40):
So, I mean, it sounds um sounds a bit like a
golden goose in some some ways.
Um, you know, uh get a bigcontract with government and and
uh the world's your oyster, butum obviously it's not that
simple and not thatstraightforward.
What are some of the issues thatyou have encountered or that
you've seen with your clientsover the last couple of years?
SPEAKER_00 (06:57):
Oh, that's a that's a big one.
Um so straight away I agree.
It is it looks appealing, but Ithink there is something that
everyone has to understand, andthat's it's that Commonwealth
procurement is not privatesector procurement.
Private sector procurement isdefinitely a financial function,
I understand that, butcommonwealth procurement is more
of a commercial regulatoryfunction.
(07:18):
They buy goods and servicesbecause they have a need they
have to fulfill, and they arepurchasing this with taxpayer
money.
As a result of that, what theyneed to do is make sure that
they are spending their moneytransparently and there is
accountability for poorprocurement practices.
They also want to make sure thatwhoever is getting the work are
ethical companies that do nothave judicial decisions against
(07:41):
them, especially as it relatesto unplayed employee
entitlements.
There are a range of differentprocurement connected policies
that people need to abide by aswell, and it can take a very
long time to get governmentwork.
So I want to give you an exampleof this.
DroneShield is a absolutelyphenomenal Australian company.
(08:02):
They are probably one ofAustralia's golden child in
terms of uh impressiveness.
They are known all around theworld.
It is an Australian business,it's absolutely impressive, and
they have so much work overseas,and they have not that many
contracts in Australia.
And that is not something we saylightly because you look at
Ukraine, drone shield have beeninvolved from the beginning.
(08:25):
Everyone knows they are the bestwhen it comes to counter UAS
services and goods.
Um they have million,multi-million dollar contracts
in the United States throughoutEurope, and them getting work
here is proving very difficult.
And obviously, that is notsomething I say lightly because
it might dissuade other peoplefrom trying to provide services
(08:47):
and goods to the Commonwealthbecause if you're not if they're
not a drone shield, well, ifdrone shield is struggling, what
chance do other people have?
SPEAKER_01 (08:53):
Yeah, and that's a complaint I hear quite often
that often it's easier for firmsto get work uh overseas and
export services rather thanproviding them here to the
Commonwealth.
Um, why do you think that is?
SPEAKER_00 (09:06):
I'll be careful on how I say this.
I think there's a lot of goodthat the Commonwealth government
tries to do in terms of itsprocurement practices.
However, there is a lot of thereis a requirement for the
procurement teams to upskill.
Uh, this was not a personalview.
This is a re a view from areport that came out uh in
(09:26):
September 2023 called Report498, and it basically said that
Commonwealth procurement needsto professionalize.
It's not a it's not a pathwaythat most people choose to go
down.
A lot of people find themselvesin this area.
And when I say that, I foundmyself in Commonwealth
procurement.
I had never even considered orheard of it before I found
myself there.
But it's a complex area.
(09:48):
You deal with everything fromyou know getting people into
clean buildings to purchasingF-35 jets, which are some of the
coolest jets in the world.
So it's just it's just thebuying of goods and services by
the Commonwealth.
There is a difficulty that the,and I don't know why, but the
Commonwealth has in terms oftheir risk appetite.
(10:09):
They're not a fantastic buyer.
Some of them are excellent, andother groups don't understand
what they should be looking for.
They don't understand what theirrequirements should be, and
that's the I want somethingversus I need something that
gets conflated all the time.
And then it's also just notknowing who to go to.
Uh, and a common complaint wehear, and I've heard it when we
(10:32):
were on that New Zealand tradedelegation mission that you guys
hosted, there is a requirementthat people need to go and
network.
They need to introducethemselves, they need to market,
they need to let the governmentknow who they are, what they do,
and how they can sell or bebought, um, how the Commonwealth
can buy from them.
(10:52):
So it's it's interesting becausewe don't exactly understand why
Australian businesses find it sodifficult to sell to the
Australian government.
We do see a lot of internationalbusinesses selling a significant
number of um goods and servicesto the Australian government,
and we are seeing an increase inthe number of um Australian
(11:14):
businesses that are having toexport their product, and
they're finding essentiallybetter opportunities in the US
markets, UK and Europe, um, inthe UAE.
Opportunities overseas areproving quite lucrative.
I mean, for example, again,Drone Shield, they've got the
majority of their contracts areinternational.
SPEAKER_01 (11:34):
You touched on the question of visibility with
government officials.
Have you got any advice forfirms on how they can try and uh
market themselves or at leastmake officials aware of the
services they offer?
SPEAKER_00 (11:46):
Yeah, I I do.
The number one tip we have hereis the best BD you can do is
good delivery.
That's that's the number one.
If you are very good at what youdo, people will hear about you.
So I guess what that means isyou need to find a way into the
government.
And if it depends on who you areand depends on what you're
doing, and as we say,procurement is such a
(12:06):
significant area.
If you're trying to do defense,if you're trying to provide
services or goods to defense,then and you're an SME, your
best avenue for doing this iseither partner or subcontract
through the primes.
Uh, and there's uh you know,there's nine primes or something
like that that defense um usemajority of the time.
And there's the global supplychain programs.
(12:28):
There's also the MSP arrangementas well, um, it's a managed
service provider.
You also have other largerorganizations and medium
organizations that have largecontracts and they need
expertise to come in.
So if you're providing ageneralist service, it's gonna
be more difficult.
If you have a niche product thatnobody else has, you're gonna
find it much easier.
So that's why in the beginning,when I'm saying everyone should
(12:50):
look at this, but not everyoneshould apply for it, there's a
reason, and that's because youneed to go out of your out of
your comfort zone, you need totalk to people, go to these
networking events, you need totry and subcontract initially.
If you can get your hands on adirect contract, that's
fantastic.
All kudos to you.
I'm glad you're able to do that.
But most of the time you're notgonna be able to do it.
(13:10):
So you're gonna subcontract yourway in through these other
providers.
And if you're doing that, again,give the best possible service
you can, if we're talking aboutservice firms, give the best
possible service you can, andthat company's gonna want to use
you again.
I mean, everyone's in it forthemselves.
Um, it's a it's a business, theyhave to be profit-focused.
And if you're a business, so putyourself in the shoes of these
(13:31):
larger companies, if you have asubcontractor who is low risk,
doesn't cost that much money,and they are delivering an
exceptional value, you're gonnawant to use them every single
time.
And people can build upfantastic relationships.
I know of a company that's gotabout 60 people, and they don't
have any direct contracts withthe Commonwealth, they
subcontract all of theirresources in.
They don't have a problem withit.
(13:52):
So people trying to find theirfeet for the first time, they
shouldn't have a problem withthat either.
SPEAKER_01 (13:58):
Now we've talked about um some of the challenges
associated with governmentprocurement, but what are what
are some of the positives?
SPEAKER_00 (14:05):
I guess the positives are if you're able to
get yourself a governmentcontract and you are delivering
a valuable service, theCornwall's gonna see that and
the Cornwall's gonna want to useyou again because again, they
don't want to have to go out anddo these complicated procurement
processes which take a lot oftime uh and expertise.
Sometimes they have to get inexternal providers to come and
actually run some of theseprocesses.
(14:25):
They're subject to error, theyhave to restart it on occasion,
and that's just part and parcelof you know doing work.
People make mistakes.
The most important thing is ifyou do good work, you're gonna
have a long-term client.
And if you keep doing right bythem, you're gonna get repeat
work, and that's gonna give youthis massive opportunity to
grow.
And if you're able to dogovernment work and you have
(14:46):
private work, it's gonna put youin the best position to expand.
And we know, we know firms, um,so for example, Birdon, they
came and did a presentation fora different group quite some
time ago, and they made it veryclear that what's gonna be very
important for businesses is todo both government and private
work.
And they were saying that theAustralian environment's very
(15:07):
different.
It's very, they described it, Ibelieve, as you're a wolf on the
plains.
You are scrapping for food, andit's very competitive.
And then they went overseas tothe US and they said obviously
they were very good at what theydid, they worked very hard, but
they went over to the US andthey said their first contract
there was worth more than anycontract they had ever received
(15:28):
in Australia.
SPEAKER_01 (15:29):
Yeah, and there's a question of scale, right?
I mean, so the AustralianCommonwealth procurement is is
big for Australia, um, butAustralia is still only a
middle-sized power on a globalbasis.
SPEAKER_00 (15:41):
So I had a conversation this morning uh on
this exact point, and I thinkit's a it's a great point.
One of the issues defence has isit's the largest department in
Australia, so it thinks it's gotreally solid bargaining power
when it's dealing with some ofthese larger organizations.
When it comes to Australianorganizations, they do.
They have the most bargainingpower, uh, and that's completely
understandable.
(16:02):
But they will go and they'lltalk to you know one of the
major primes, and they will tryand say, you know, these are our
terms, take it or leave it ifyou want this hundred million
dollar contract.
And some of these primes arewilling to walk away from that
because they've gotbillion-dollar contracts with
the US government, for example.
Um, so you know, Australia, Ithink when two years ago or two
financial years ago, when it was70, roughly$75 billion in the
(16:25):
annual procurement spend,defence was about 52% of that.
So roughly$35 billion or$37billion, roughly, whatever the
numbers are.
That is not even the annualrevenue of some of these larger
organizations.
So Defence is massive in termsof the opportunity it could
provide to Australianbusinesses, especially SMAs.
(16:46):
But when you go overseas, themarket is significantly more.
SPEAKER_01 (16:51):
And does that create a challenge for Aussie
businesses that are looking togo offshore, do you think?
Or or is it just more of anopportunity?
SPEAKER_00 (17:01):
I believe it's an opportunity.
I think the the challenge thereis it's complicated and it's
scary, and people don't knowwhat they're doing.
Um, I mean, if if you're in thedefense industry again, this is
what Acumen does.
We are defense industry focused.
Uh we do some probity andcompliance work for some
government departments, butprimarily 99% of the work we do
is is aimed at private industry,especially those trying to do
(17:24):
work with the Commonwealth, andour expertise is within the uh
Department of Defense.
So trying to engage with theDepartment of Defense, that's
us.
Um, and if people are trying togo overseas, well, we can help
them with that.
Uh, Canberra Business Chambercan help them with that, Ostrade
can help.
Um, there's a lot of otherorganizations that are willing
to help even have discussions.
(17:44):
And so, land forces, forexample, if you go to land
forces, you can walk around, youcan find somebody else.
The people from these stands whoare Australian businesses who
are now providing um servicesand goods overseas, they're more
than willing to have a chat andto give some tips and advice.
And one of the most importantthings we got told was Ostrade
is set up to help with this.
(18:04):
I mean, it you need to reach outto them, you have to have a
crack, essentially.
But it shouldn't be scary forbusinesses and it shouldn't be
an impediment.
It should just show theopportunity that exists overseas
as well.
But if you're not even doingbusiness with in Australia and
you haven't even contemplateddoing business for the
Commonwealth, because Icompletely understand some of
the contracts you see are huge.
(18:25):
I mean, we're ranging fromcontracts between eight pages,
which some people still considerto be a lot, to contracts that
are a thousand pages.
Um I mean, when you're dealingwith defense, you've got the as
DEF CON contracting suite, andthat is very, very complex.
But if you're able to get adefense contract using as DEF
CON, I mean your business isgoing to be you're doing okay.
So as DEF CON stands for theAustralian Defense Contracting
(18:48):
Suite.
It is a suite of differentdocuments used for construction,
services, goods, all the wayfrom simple purchase orders up
to complex um procurement.
So for example, we're trying toget submarines.
Um I mean, if we're using as DEFCON templates, we would use the
comp uh as DEF CON complexdocuments for those ones.
(19:10):
I mean, these are documents thatmight take teams of lawyers
years to put together andnegotiate.
So when we're talking about someof the Canberra Business Chamber
members, it's going to be thesmaller contracts, and they
might, some of the mostcomplicated ones they have to
deal with will be the services,the ASDEFCON services suede.
(19:30):
What we usually recommend forpeople is, and what we usually
provide advice on, is justaccept what you can get from the
Commonwealth and just show themhow valuable your services are.
Um and then once you've done ita few times, then you can start
looking to negotiate.
There's always things to watchout for, and the main one as
well as the intellectualproperty, especially when you're
dealing with large organizationsand primes.
(19:52):
We have seen SMEs who offer anabsolutely fantastic product.
Um, and this we did a recentnegotiation with one of them.
They offered a fantasticproduct, and they were working
with one of the larger primes,and the prime essentially wanted
all the intellectual propertythat went with it.
We're saying you absolutelycan't have that.
This business doesn't existwithout this product.
You want the product, you canhave a license to it, but that's
(20:14):
about all you can have.
And in Australia, we are a verybureaucratic state.
We have a lot of rules andregulations, and some of this is
absolutely fantastic for SMEs.
You got the unfair contractingsway, uh, unfair contracting
term regime.
Um the UCTs changed, I think itwas last November or even maybe
two Novembers ago, time flieswhen you're absolutely smashed.
(20:35):
What it does is if you're doingbusiness with within Australia,
it's a standard form contractand you're dealing with a small
business, these terms that usedto be uh held as unenforceable,
they now attract massivepenalties for companies.
So we've seen it's uh it'sactually one of the bits of
regulation that's been broughtin that I think has provided the
(20:57):
most benefit for Australianbusinesses and for SMEs.
Now, when you're dealing withother Australian businesses and
other SMEs, obviously it getsquite annoying.
But when you're dealing withsome of these larger
organizations, especially thosethat only have a presence in
Australia and they're notAustralian, they don't know.
And some of their teams are justtrying to get the work done.
They provide a standard form,people think they need to accept
(21:17):
it, and then we've come in andwe've managed to say to them,
no, you don't need to acceptthis.
And hey, it's actually aneducation piece now.
Hey, prime, you can't do this,or else you're going to get a
massive fine if the relevantregulatory body finds out,
they're more than happy tochange those because they just
didn't realize.
So there is sometimes an unfairperception, be it you know
(21:38):
within Commonwealth departmentsas to consultants and
contractors, be it from SMEstowards some of the larger
vendors.
You need to be careful whenyou're dealing with them, but
most of the time they just wantto deliver and they're competing
against other groups.
So they want to provide aproduct that is um you know
better and cheaper and morevaluable than their competitors.
And so if you can show yourselfas a good subcontractor or a
(22:00):
good supplier, you will haverepeat work.
SPEAKER_01 (22:04):
Now you mentioned a moment ago that Australia is a
fairly bureaucratic country.
Um there's lots of rules andregulations, right?
Um but I understand there's somechanges coming up in
mid-November to the Commonwealthprocurement rules.
Do you want to just unpack thosefor us a little bit?
What is it that members andother businesses need to know?
SPEAKER_00 (22:22):
No, it's a great segue.
Um it's actually coming up uh 17November 2025.
So the when we're talking aboutCommonwealth procurement, it's
the purchasing of goods andservices.
These this entire system isgoverned by the Commonwealth
Procurement Rules.
Now it's not just the CPRs, youalso have procurement connected
policies, you have internaldepartment AAIs, you have the
(22:43):
PGPA Act, you've got the GPJRAct, there's a lot out there.
But the primary set of ruleshere is the Commonwealth
procurement rules.
The and which we call them theCPRs.
So they are the government'srulebook for how contracts are
formed, how the procurementshould proceed, and how people
should be treated, essentially.
The primary purpose of the CPRsis to is the pursuit of value
(23:08):
for money outcomes.
Value for money is a is adifficult term to define because
there's no one size fits all.
What's value for money for onedepartment is different for
another.
What's value for money for onedepartment, one specific
procurement might actually bedifferent for a separate
procurement within the sameteam, within the same
department.
It all depends on what therequirements are.
(23:28):
Essentially, if you are aprocurement official, your
obligation for the department isto undertake a procurement
ethically, compliantly, and toobtain value for money
solutions.
This is the best use of taxpayermoney, and this is what the
procurement officials anddelegates, they they know all of
this, and this is what the CPRsguide and essentially regulate
(23:50):
this environment.
The CPRs also talk about opentender versus limited tender.
It talks about uh what isethical, it talks about uh you
know a range of differentrequirements.
What we find very important isif you're an SME and if you're
an Australian business, you havea lot of opportunities under the
CPRs to engage with theCommonwealth directly without
(24:12):
the Commonwealth having tofollow additional rules.
So there are Appendix Aexemptions, and very recently
there was some governmentchange, maybe it was July last
year, I can't remember off thetop of my head, there were some
changes where the Appendix Aexemption 17, I believe,
increased to$500,000.
So if you're an SME, which meansgovernment departments are
(24:34):
allowed to approach SMEs forcontracts worth up to$500,000
directly without having to do anopen tender.
And I thought that wasfantastic.
Um we are seeing some hesitationto it because there has also
been a cut down on the number ofuh consultants and contractors.
This seems to be more in theabove-the-line space rather than
below the line.
(24:55):
So if you are a small businessproviding below-the-line
services, um just be aware thatif there is a delegate you're
talking to and they areinterested in the product or
service you have, they canengage you directly using this
exemption.
So the CPRs regulate the entireprocurement uh environment.
There are changes coming inNovember.
Now, these changes, we have towait to see if they're going to
(25:18):
be good.
They are being stated as beingonly focused or heavily focused
on providing support forAustralian businesses and SMEs,
but the wording of the CPRsdoesn't actually, or the
proposed CPRs, I should say,doesn't actually support what
they're saying.
So I'll start with a good, Iguess.
That's probably always the bestplace to start.
(25:39):
So there's going to be mandatoryrequirements for some
procurement officers, or for allprocurement officers, sorry, to
um have the rule here.
For procurements with anexpected value at or uh$10,000,
above$10,000 and below therelevant procurement threshold,
excluding procurements from astanding offer, non-corporate
(26:02):
Commonwealth entities, which isdefense and other organizations
like that, they must invite onlyAustralian businesses to make
submissions.
So that's between 10,000 and thenew threshold, which would be
$125,000.
So between$10,000 and$125,000,procurement officials must only
invite Australian businesses tomake submissions.
(26:22):
Now, obviously, that isfantastic news for Australian
businesses and for CanberraBusiness Chamber members.
There is another rule which isfor SMEs.
So for procurements withexpected value below$125,000
from the Management AdvisoryServices Panel, the people
panel, or any standing offermanaged by the DTA, these same
type of departments, must inviteonly SMEs on the relevant
(26:44):
standing offer to makesubmissions.
And because these are notexceptionally high value
contracts,$125,000, that's goingto make it much easier for SMEs
to get that initial engagement.
The problem with this, these twopoints, however, and this is
what my issue with them sayingit's you know fantastic for SMEs
and it's only good things, thereare carve-outs in these exact
(27:05):
two rules.
So 5.4 and 5.5, they have asubsection C for both of them
that says a procurement officialmight determine that they don't
need to approach an Australianbusiness or don't need to
approach an SME.
So it's not like a must.
It kind of defangs it a littlebit.
Completely.
And you just have to record thedecision.
There's no guidance on what thedecision should be, what the uh
criteria for a decision shouldbe.
(27:26):
So I I do I don't like that.
I understand why they've put itin, but there isn't that stick
anymore, uh, that it's a must.
And so that is quitedisappointing.
Uh the other problem is you haveto be on these panels.
And getting on a panel isincredibly time consuming and
it's difficult.
And I know that Senator DavidPocock has made a lot of noise
(27:48):
recently about the inappropriateuse of panels.
Uh that is, I guess, my first orsecond recommendation for your
members would be step one wouldbe to subcontract or partner or
use other organizations.
Step two, try and get yourselfon a panel.
Panels aren't always open,they're only open every couple
of years.
(28:08):
The DTA is doing a better job ofthis because they are doing
constant refreshes to theirlarger panel.
But uh, some of the otherpanels, you'll, if you don't
miss out, three or four years ishow long you have to wait before
you can actually uh apply for itagain.
So it's it's really damaging forthe long-term longevity of a
business if you don't get on thepanel.
SPEAKER_01 (28:27):
So, how do businesses know when a panel is
open?
SPEAKER_00 (28:31):
The panels will always be advertised, and it's I
would say it's the obligation uhand responsibility of every
business to constantly scourOSTender.
Um, I guess for some of yourmembers who don't know what
OzTender is.
Oz Tender is the government's uhessentially panel process.
It is it records every single umcontract above a certain
(28:54):
threshold that has been enteredinto.
It also releases or advertisesfor all open tender approaches.
If the Commonwealth is doing anopen tender approach, it must
advertise it through OSTender.
So we highly recommend if theydon't have an account, it's
free.
Create an account, get onOSTender, scour it.
It's so useful because what itallows you to do is see who's
(29:16):
winning work, who's issuingcontracts, what type of work's
being issued, and allows you torestructure or refocus your
attention on some of these areasthat you can see are lucrative,
especially if you're working ina space that just doesn't make a
lot of money at this point intime.
SPEAKER_01 (29:31):
Is there anything else in the changes to the
Commonwealth procurement rulesthat you want to draw to
people's attention?
SPEAKER_00 (29:38):
There's going to be an increased focus on the
economic benefit.
Uh there's also going to be thenthe thresholds have moved up as
well, and they're now supportingand they've included the
Australian business test, sothey'd redefined what an
Australian business is.
Unfortunately, as well, they'veremoved the protection.
(30:00):
Of discrimination from therelevant provision in Division I
of the of the CPRs, and they'vemoved that over into Division
II.
And so now we actually might seea position, it depends on how we
go moving forward from November.
We might see a situation whereSMEs are being discriminated
against due to their size, andit's no longer something that
the vendors can put their handup and say, hey, we've got a
(30:22):
valid complaint now becausethey've removed it.
So they haven't removed it fromthe CPRs, but they've moved it
to Division II.
To sum it up very quickly,because it's a complicated
document, division one appliesto all procurements, division
two only applies to certainprocurements.
If you're a government uhdepartment and you're releasing
(30:43):
a procurement through a panel,division two doesn't apply.
So the recourse you have for aCommonwealth procurement rules
breach is questionable.
You can make some noise, and wesee breaches every day, and we
see the ANAO constantlyreleasing reports where they say
the CPRs were not followed orthey were breached and nothing
(31:06):
happens.
And this is, in my view, it's anabsolute disgrace because that's
taxpayer money that's being usedand it's not being used
effectively.
I believe the ANAO said in areport that roughly 54% of all
contracts over a three-yearperiod, those procurements were
either partly effective or notat all effective.
So you can imagine even one yearof$99.6 billion, 1% is 996
(31:31):
million.
We're saying up to 51 or 54%isn't partly effective or not
effective.
We have a recourse forsuppliers, and this is something
that I've been advocating for,and I understand other
organizations are now alsomaking some noise about.
You had the GovernmentProcurement Judicial Review Act.
That was brought in in 2018,came into effect in 2019.
(31:55):
That same year where it was itcame into effect, the CPRs were
amended so that if you are if aprocurement was released through
the panels, Division II nolonger applied, and it's no
longer a covered procurement.
So you can only make complaintsif the CPRs are breached, if
it's a covered procurement.
So if it's through a panel, it'snot a covered procurement, and
(32:16):
81% of all contracts were over athree-year period according to
the ANAO were released viapanels.
So that recourse isn'tavailable, especially for SMEs,
for any panel procurement.
And it's it's just a positionnow where for those people who
did have this avenue for SMEdiscrimination, it doesn't exist
anymore because it's now inDivision 2.
SPEAKER_01 (32:35):
So, what is your advice for people who might feel
aggrieved by a decision or anoutcome through the Commonwealth
procurement processes?
SPEAKER_00 (32:44):
Primarily you've got to make a commercial decision.
Um, we're commercial lawyers, wewe won't give advice, which we
won't follow ourselves.
You can make noise, but you haveto be careful because if you
make too much of the wrongnoise, you might be you know
biting the hand that feeds you.
However, we've got someone inthe ACT, for example, who likes
to make noise about this, andit's Senator David Pocock.
(33:04):
We highly recommend, if you'renot in the ACT and you're
listening to this, find who yourrelevant member is and write
letters to them, complain tothem, let them know what's
occurring.
I think if there is asignificant enough breach and
you can make enough noise, youwill see recourse from it.
And also a lot of the time, someof the departments they will be
apologetic.
Uh maybe in the future you'llyou'll see something more
(33:26):
positive as a result, but rightnow there is no immediate
recourse.
If they even acknowledge thatthey breach the CPRs, it's uh,
oh, sorry about that.
And and that's it.
If they have evaluation criteriaand they don't follow the
evaluation criteria, nothing,nothing happens at this stage.
Um the that act I was talkingabout, the GPJR Act, came into
(33:46):
effect in um 2019.
There's been zero decisionsunderneath it.
That's interesting in itself.
It's fascinating.
Yeah.
SPEAKER_01 (33:54):
So look, there's obviously a few negatives in
there, but but obviously a lotof positives in government
procurement as well.
So um, if you had sort of onepiece of advice for businesses
looking to engage with theCommonwealth, what would it be?
SPEAKER_00 (34:09):
One piece of advice I guess is hard.
I would say don't try and don'ttry and have it all.
Subcontract, partner, anddeliver your best work.
The Commonwealth is primarilyinterested in purchasing
valuable services that are lowrisk.
So if you can show that yourservices are valuable or your
goods are valuable and that youare a low-risk supplier, you're
(34:32):
going to get more work in thefuture.
I would also recommend you needto be patient.
You need to understand thatthese type of contracts take
longer than your traditionalbusiness-to-business contracts.
Um, but if you're willing to bepatient, you're willing to put
in the work, you might see someof these contracts, and that's
going to be absolutely fantasticfor your business.
I would say if you don'tunderstand what you're doing in
(34:52):
the Commonwealth procurementspace, come talk to us if you
want.
Um because you you don't want toput all this time and effort
into a procurement if you haveno chance of winning.
And we are very experienced inthis area.
So if you are trying to bid forsomething, come talk first.
Because before you spend 40, 50hours putting the best
submission forward that you can,you're going to want to make
(35:14):
sure you're actually going to becompetitive for it.
And I guess the other part isdon't half-ass anything.
A lot of people are trying tobid for everything, and they're
putting average uh tenderresponses out.
It would be better for you toapply for one procurement that
you put your heart and soul intothan into a hundred procurements
where you think, okay, we'lljust put this in and see how we
(35:36):
go.
Um again, go to the networkingevents.
Uh, Canberra Business Chamberhas lots of networking events.
Partner with people, subcontractto people, and deliver your best
services you can.
SPEAKER_01 (35:45):
Matthew, the chamber is looking to take a delegation
to Washington, DC next year toinvestigate some of the defense
and government procurementopportunities available over
there in the States.
Um are you keen to sort of beinvolved in that and and how
successful do you think that'sgoing to be?
SPEAKER_00 (36:01):
I'm very excited for that.
I'm very keen to be involved.
The recent trip you did to NewZealand, I I know that it
resulted in some contracts forsome of the Canberra Business
Chamber members.
Uh, Washington is asignificantly larger uh area
than New Zealand is, andobviously when I say Washington,
I mean all of the United States.
If you're serious about doingbusiness overseas, this would be
(36:23):
an absolutely fantasticopportunity.
And I we know a couple of ourclients that we're already
dealing with who have defensecontracts, they're all gearing
up to get ready for this.
They're very, very excited aboutthe prospect of doing business
in the United States.
It does mean, under the currentadministration over there, that
you're probably gonna have toestablish a United States
business.
That's fine.
That's not something that shoulddissuade you from trying to do
(36:45):
it, but it's definitelysomething that's exciting.
It's a massive opportunity.
Um, and it also gets to show theUnited States that you know
there is a lot of exceptionaltalent and hardworking people in
Australia, and you know, we'rehungry for work, we want to do
the work, and if given theopportunity, we can deliver high
quality work.
So we're very excited.
(37:05):
All the clients who uh we'vespoken to in the defense space
are very excited about this.
All your members, as far as I'maware, should be very excited
about it as well.
It's a great opportunity, uh,and we highly encourage everyone
to um put their hand up and saywe're we're interested.
SPEAKER_01 (37:19):
Yep.
And you've got to be in marketto build relationships and make
those connections ultimately,right?
SPEAKER_00 (37:23):
Absolutely.
You have to do traditional BD.
I know there's been a bit of uhhesitation towards picking up a
phone or actually talking peopleface to face because of COVID.
You can't do business just overemails.
You have to call people, youhave to maintain relationships,
you need to go to these events.
This and such an event like thisis is once in every you know
years.
It's we haven't seen the lasttime that something like this
(37:44):
was hosted, and you get to goover with a number of other
companies from Australia aswell.
It's a great opportunity, um,and it's it's could be massive
for some companies.
SPEAKER_01 (37:53):
Yeah, and if any of our listeners do want to know
more about that, get in touchwith the chamber.
Uh, you can find the details onour website at Canberra
Business.com.
Some great advice there.
Thank you very much.
Um, this is the CanberraBusiness Podcast.
I'm Greg Harper from theCanberra Business Chamber, and
I've been talking to MatthewBouts from Acumen.
Um, Matthew, thank you so muchfor joining us today.
SPEAKER_00 (38:12):
Thank you, Greg.
Thanks for having me.
SPEAKER_01 (38:14):
Uh, don't forget to follow us on your favorite
podcast platform for futureepisodes of the Canberra
Business Podcast, and I'll catchyou next time.
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Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.