Qld govt lifts SME IT procurement target to 25 percent

The Queensland government will spend at least 25 percent of its $1.2 billion annual IT purchasing budget with small and medium enterprises (SMEs) after revising its targeted commitment.

The beefed-up whole-of-government IT procurement committment, revealed in the state budget earlier this month, will replace the existing 20 percent ‘service standard’ from July.

At the same time, the government has also expanded the 'transaction' threshold from $10,000 to $5000, meaning a greater number of contracts will now flow to SMEs.

“The service standard has been replaced with the new service standard of ‘percentage of whole-of-government ICT spend awarded to SMEs (transactions over $5000)',” budget documents state.

A spokesperson for the Department of Communities, Housing and Digital Economy (DCHDE) told iTnews the new minimum target applies to both whole-of-government IT spend and agency spend.

The target is inclusive of contingent labour.

“The updated service standard comes into effect in the 2021-22 financial year and is intended to contribute to the overall procurement spend target for whole-of-government,” DCHDE said.

“It replaces the former measure of whole-of-government ICT spend to be awarded to SMEs for transactions over $10,000.

“Prior to the service standard being updated, only suppliers with transactions over $10,000 in a given quarter were reviewed under the validation process. 

“This process has now been expanded to include transactions over $5000 and enables SMEs in the smaller spend bracket to be included.”

The IT spend target will contribute towards the wider target to source 25 percent of all government purchases from Queensland SMEs, a requirement that came into force in July 2020.

The government expects that this minimum target – which is already well above the federal government’s – will climb to 30 percent by July 2022.

Total “ICT category spend on whole-of-government ICT” in Queensland currently sits at around $1.2 billion annually, the spokesperson said.

Queensland’s new minimum IT spend target for SMEs comes just months after the NSW government set a 30 percent target to boost the local IT sector.

The 30 percent target is one of several planned changes aimed at diversifying the state’s IT supplier ecosystem and boosting SME participation levels in the wake of the pandemic.