NSW Government ups innovation procurement threshold to $1 million

Life for startups looking to work with the NSW Government has become a little easier, with the government recently upping its innovation procurement threshold from $250,000 to $1 million.

With this, state government agencies are now able to engage suppliers through direct negotiation on short term contracts valued up to $1 million, including GST, for proof of concept or outcomes-based trials. Once a trial is complete a competitive tender process will then take place.

The procurement innovation stream was first established in 2014 to help reduce red tape for government agencies and suppliers, allowing agencies to trial services for up to 75 days without a formal tender process.

Victor Dominello, NSW Minister for Innovation and Better Regulation, said the new policy “brings the government into the 21st century” by allowing agencies to trial new solutions with local startups and SMEs.

“Digital innovation is transforming markets and businesses across the world. NSW is booming and it makes sense for entrepreneurs to play a greater role in decision making and the delivery of public services,” he said.

To qualify under the policy, the supplier must agree to the agency publishing a report on the use of its products or services, within 21 days of the completion of a trial.

The move from the NSW Government follows the beta launch of the Federal Government’s Digital Marketplace in August, which aims to make it easier for startups and SMEs to provide digital services to government.

Also launching as part of the Marketplace later this year will be the Ideation platform, where government buyers will be able to launch challenges to solve business problems, with suppliers able to pitch creative ideas to solve them.

The NSW government had initially flagged a change to its procurement policy earlier this year with the release of a position paper outlining a framework to regulate the sharing economy in the state.

In developing the framework the government stated it would work with five guiding principles, one of which was the adopting of an agile approach to government procurement.

In March it was announced public servants working for the NSW Department of Finance, Services, and Innovation would be the first to be able to use ridesharing services when travelling for work.

The news comes as UK fintech TransferWise gears up to set up a new office in Sydney. Cofounded by Kristo Kaarmann and Taavet Hinrikus, Skype’s first employee, TransferWise is a peer to peer money transfer service valued at $1.1 billion.

With NSW Trade and Investment helping bring the company down under, Hinrikus said, “Sydney is a great city and we’re looking forward to becoming part of the tech community. Since launching TransferWise here, it’s become one of our fastest-growing routes.”

Image: Sydney Harbour. Source: Visit NSW.