Think government contracts are only for big corporations? Think again. The Australian Government is actively working to increase SME participation in procurement, and smaller businesses have unique advantages that large competitors can't match. Here's how to leverage them.

The Numbers Are in Your Favour

The Commonwealth Procurement Rules explicitly encourage SME participation. According to the Department of Finance, small and medium enterprises received over $17 billion in Commonwealth contracts in the 2022-23 financial year. The government has targets to increase this further.

Key policies supporting SMEs include:

• Contracts under $200,000 should consider at least one SME supplier
• Indigenous Procurement Policy (IPP) with mandatory targets
• Unbundling requirements to create smaller, SME-accessible contracts
• Payment terms of 20 days for small business (versus 30 for large)

Your Competitive Advantages

Agility and Responsiveness: Large companies have layers of bureaucracy. You can make decisions quickly, adapt to changing requirements, and provide faster turnaround times.

Direct Senior Involvement: When clients work with SMEs, they often get direct access to business owners and senior staff—not junior account managers. This means better communication and accountability.

Specialised Expertise: Big companies try to be everything to everyone. SMEs can be the absolute best at one specific thing. Deep expertise beats broad capability.

Local Presence: For regional contracts, local knowledge and presence is invaluable. You understand the community, can respond quickly, and often have lower mobilisation costs.

Cost Efficiency: Lower overheads mean you can often deliver better value for money while maintaining healthy margins.

Indigenous Procurement Policy (IPP)

If you're an Indigenous-owned business, the IPP creates significant opportunities. The policy sets mandatory targets for Commonwealth agencies to contract with Indigenous businesses.

To qualify, your business must be certified by Supply Nation. Benefits include:

• Mandatory set-asides: Some contracts are exclusively for Indigenous businesses
• Minimum Indigenous participation: Larger contracts may require subcontracting to Indigenous suppliers
• Remote contracting: Special provisions for businesses in remote communities
• Access to the Indigenous Business Directory

Learn more at supplynation.org.au and niaa.gov.au.

Strategies for Competing

1. Start Small: Build your track record with smaller contracts. Use these as case studies for larger opportunities.

2. Join Panels: Many procurement opportunities go through pre-qualified panels. Getting on relevant panels gives you access to work without competing in full tender processes each time.

3. Partner Strategically: Team with complementary businesses to tackle larger contracts. A consortium of specialists can outperform a generalist large company.

4. Focus on Your Niche: Don't try to bid on everything. Focus on opportunities where your specific expertise creates clear differentiation.

5. Tell Your Story: In your bids, articulate why working with an SME benefits the client. Don't hide your size—position it as an advantage.

Resources for SMEs

• business.gov.au - Selling to government guide
• buyingfor.vic.gov.au - Victorian Government supplier portal
• buy.nsw.gov.au - NSW Government procurement
• supplynation.org.au - Indigenous business certification
• asbfeo.gov.au - Australian Small Business and Family Enterprise Ombudsman

Don't let company size hold you back. With the right approach, SMEs can and do win significant government contracts every day. Focus on your strengths, comply with requirements, and present your best work.