New Zealand companies need to start winning more government contracts in order to boost the economy by millions – but a focus on price above all else is negatively affecting results.
A report commissioned by NZTE’s Industry Capability Network says Australian experience indicates potential to boost revenue share here by up to $170 million for every $1 billion spent on major projects.
Catherine Beard, executive director of manufacturing for BusinessNZ, said it was vital local companies started winning a bigger share of large government, local government and SOE tenders based on their merits.
“In order to grow bigger companies in New Zealand that are more capable of entering into export markets, they need to get a fair crack at the larger local projects, which are typically a government spend," she said.
"Too often we see an over-emphasis on price versus quality resulting in poor procurement results, requiring expensive remedial work being carried out.
“We would like to see a renewed emphasis on 'whole of life' procurement from government, which takes into account price, quality, durability, servicing and local industry capability building.”
The ICN report surveyed the local and international supply chain scene and found while some leading Kiwi companies are competing effectively in the major supply chain market, there was scope for more companies to win this sort of work and develop relationships.
ICN director Paul Linton said the network was continuing to help buyers find competitive local suppliers for large projects.
BusinessNZ and ICN are hosting a series of seminars in Auckland, Wellington and Christchurch this week on what successful New Zealand companies can do to win local and global work. Large procurement agencies will also talk about what qualities they look for in supply chain partners.