Opinion Piece by Luli Adeyemo, CMO, Tendertrace
Western Australia’s decision to raise its direct procurement threshold to $5 million for local manufacturers is a bold economic move—one that could supercharge local industry, create jobs, and strengthen the state’s supply chain resilience. However, this policy shift also raises a critical question: how do we balance efficiency with transparency in Government spending?
For decades, competitive tendering has been the foundation of Government procurement, ensuring value for money, fairness, and accountability. While direct sourcing can accelerate economic growth, it also introduces risks that must be carefully managed. WA’s approach is an opportunity to redefine what fair and efficient Government spending should look like—but only if the right checks and balances are in place.
The Risk of Reduced Oversight
Governments worldwide use competitive tenders to ensure that contracts go to the best-qualified suppliers at the best price. By allowing agencies to bypass this process for contracts up to $5 million, WA is removing a layer of scrutiny that could open the door to inefficiencies, cost inflation, and favouritism.
Without clear reporting and accountability frameworks, how can the Government ensure that these contracts truly deliver value to taxpayers? Who decides which businesses qualify, and what criteria will be used to justify these direct deals? These are questions that must be answered to maintain public trust and supplier confidence.
Transparency Builds Trust—And a Stronger Local Industry
For this reform to achieve its goal of strengthening WA’s manufacturing sector, transparency must be prioritised alongside efficiency. The best way to support local businesses isn’t just through direct contracts—it’s by creating a fair, predictable, and competitive environment where suppliers can thrive.
Key Measures for Ensuring Transparency in WA Procurement:
- Publicly Accessible Procurement Data – Contracts awarded through direct sourcing must be publicly reported in real-time, ensuring visibility into how funds are spent.
- Supplier Performance Reviews – Businesses receiving direct contracts should undergo regular performance evaluations, ensuring they deliver on quality, efficiency, and value for money.
- Independent Oversight – Establishing an independent review body to monitor the use of direct procurement reduces the risk of favouritism and misallocation of funds.
- Clear Qualification Criteria – WA must clearly define which businesses qualify under this policy and how decisions are made, ensuring fair opportunities for all eligible manufacturers.
A Defining Moment for WA’s Procurement Strategy
WA’s $5 million direct procurement rule has the potential to revolutionise local manufacturing—but only if transparency and accountability are built into the process. This is not just about spending local; it’s about spending smart.
If WA can strike the right balance, it could set a national precedent for procurement reform, proving that efficiency and transparency don’t have to be at odds. Governments must evolve their procurement strategies, but they must do so without compromising fairness, accountability, or trust.
As this policy unfolds, businesses must stay informed, proactive, and ready to adapt—and that’s where market intelligence becomes invaluable.
