Agency responses

Department of Primary industries and Regional Development

The Department of Primary industries and Regional Development (DPIRD) supports the recommendations in the Summary of Findings and requests OAG note our Minister’s commitment to deploy Local Content Officers in the regions helping ensure the Policy intent is understood and implemented at a local level. DPIRD looks forward to providing a regional perspective in the proposed review.

Horizon Power

Horizon Power welcomes the opportunity to respond to the findings of the report. As noted in the report, Horizon Power, as a government trading enterprise (GTE), is not required to apply the Buy Local Policy however chooses to do so to support local businesses, in particular, those in our regional and remote service areas. Horizon Power notes the intent of the WA Jobs Bill 2017 introduced to Parliament in September that may require a review of the Buy Local Policy. Horizon Power would welcome participation in any such review.

Department of Communities

The Department appreciates the opportunity to review the Summary of Findings as part of procedural fairness process, and supports the recommendations within the report to improve government procurement initiatives in delivering local content and employment.

The Department accepts the report findings with no suggested amendments.

Main Roads WA

Main Roads generally agrees with the key findings and will participate in any consultation forums to review the Local Content Policy and guidelines in line with any new legislation. Notwithstanding the recommendations, Main Roads has already implemented the following improvements:

• Request for proposal documentation – Imported Content (Schedule 23) and application of 20% impost, and Significant Imported Goods (Schedule 19) and application of Exchange Rate Risk. The title of Exchange Rate Schedule is now “Proponent’s Schedule of Imported Goods Proposed for Exchange Rate Adjustment” as evidenced by revised template. Opportunities for improvement in the evaluation methodology will be explored to ensure relevant local content tender schedules are provided to appropriate officers for assessment.
• To assist in the application of the Policy for unincorporated JV’s with WA and interstate addresses, Main Roads standard form of proposal has been modified with the requirement for a single ‘Bid Address’ to be included.

Main Roads will consider and implement the accepted recommendations by the end of 2018 in accordance with the revised Policy and guidelines. In the meantime, Main Roads will continue to enhance our contract management practices to better monitor local content compliance. Immediate action has commenced to check compliance with Buy Local commitments for the Swan River Pedestrian Bridge contract that requires the contractor to provide a monthly statutory declaration.

The template contract management plan and monthly contract reporting process is being reviewed to identify any further measures for all contract management teams to check compliance with the Policy and address the need to report against local content commitments. These checks will also be undertaken at the time of assessing payment claims.

Reporting via Tenders WA can only be achieved if the system is updated by Department of Finance to enable this reporting obligation to be met by agencies.

Ideally the revised local content policy and guidelines should include model tender and contract clauses for all agencies to adopt that bind tenderers to meet their local content commitments.

Department of Jobs, Tourism, Science and Innovation

The Department concurs with the basic finding of this performance audit that the effectiveness of the Buy Local Policy cannot be determined, in terms of local content outcomes, due to a lack of data collection and reporting processes. The implementation of the Western Australian Jobs Bill 2017 and the Western Australian Industry Participation Strategy will to a large extent, address this issue.

In terms of the recommendation relating to the review of the Local Content Policy and guidelines to improve clarity and effectiveness in line with legislation, we advise that this is already underway. The current target date for completion of this review is the beginning of March 2018.

With regard to the requirements placed on policy and guidelines, these are endorsed and are part of the implementation of the Western Australian Jobs Bill 2017 and the Western Australian Industry Participation Strategy.

Department of Finance

The Department of Finance notes the findings of the Office of Auditor General’s report — Local Content in Government Procurement.

The Department of Finance is committed to ensuring that, where possible, local industry participation is increased in the supply of goods, services and works in Western Australia. As an example of this commitment, the Department currently provides comprehensive and professional procurement and contracting services to agencies in relational Western Australia procuring goods and services through its regional offices. These offices have the added focus of supporting regional suppliers.

The Department supports the intent of the recommendations outlined in the report and makes the following comment.

It is important to note that the local content policy and guidelines are being reviewed as part of the development of the Western Australian Industry Participation Strategy (WAIPS) required by the Western Australian Jobs Bill 2017. The Department of Finance is contributing to the development of the WAIPS, which is being led by the Department of Jobs, Tourism, Science and Innovation.

The implementation of the Western Australian Jobs Bill 2017 and the WAIPS will largely give effect to the OAG’s recommendations. The Jobs Bill places a number of obligations on agencies in relation to the participation of local industry, including incorporating commitments in supply contracts and reporting on achievement of commitments.