COVID, capability drive local spend growth

COVID constraints are among the factors that have seen Queensland's mining and energy executives turn increasingly to local suppliers. Growing capabilities across the supply chain are also credited as being a factor in the growth recorded in the Queensland Resources Council latest local spending report. Almost one third (32 per cent) of chief executive officers said COVID restrictions over the past year motivated them to increase their use of local suppliers. This increased focus on considering local procurement options had in turn boosted the sector’s awareness of Queensland’s local capabilities, the report indicated. More than a third (37 per cent) of CEOs said they had increased their use of local suppliers due to increased awareness of local capabilities and 32 per cent said they had increased the use of local suppliers due to increasing local capabilities. There were challenges however, with 37 per cent of CEOs indicating price competitiveness had decreased. And while 32 per cent of CEOs said availability of local suppliers drove their increased use, the same proportion said a lack of availability reduced their use of local suppliers. The QRC said the report showed more than half of its member companies ran programs last year to increase opportunities and the capabilities of local suppliers such as pre-qualification workshops, support in upgrading safety systems, training or mentioning programs and contractor forums. The peak body pointed to a variety of methods companies were employing to promote the principle of full, fair and reasonable opportunity. This included: - providing Expression of Interest (EOI) alerts to regional industry groups and local chambers of commerce; - running local supplier briefings and speaking at conferences on supply opportunities, prequalification and registration requirements. For example, the Gladstone Supply Chain Expo; - publishing EOIs on ICN Gateway with a link to company websites; - compiling a local vendor database, distributed internally to the contracts and procurement team for consideration during the design of contracting strategies. For example, the Origin Vendor Portal or Bravus’ VendorPanel Marketplace; - conducting periodic reviews of procurement policies and procedures; - maintenance of an online portal to communicate available work opportunities for local suppliers. For example, see Shell QGC’s Local Suppliers Portal; - publishing a local content policy on its website. For example, AngloAmerican’s Local Procurement Policy; - ensuring that specifications or requirements don’t inadvertently rule out local industry; - engaging very early with local companies to desktop audit their systems and processes to build their capacity and capability; and - setting internal targets for their company’s share of spending on local businesses. The QRC said its members continued to demonstrate they were committed to ensuring their payment terms were supportive for local suppliers. According to this year’s survey, 84 per cent of CEOs said their standard payment terms for local suppliers was 30 days or less, with 11 per cent paying in seven days or less.

COVID, capability drive local spend growth

Industry Queensland

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