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Procurement initiatives to support small business
Defence supports small business participation in the Commonwealth Government procurement market. Small business participation statistics are available on the Department of Finance website.
Non-corporate Commonwealth entities’ payment terms reflect the Resource Management Guide No 417—Supplier On-Time or Pay Interest Policy. To comply with the policy, Defence reduced the default payment terms for all contracts from 30 days to 20 days to ensure that small businesses are paid on time. The results of the most recent survey of Government payments to small business are available on the Treasury website.
Important measures were also implemented to allow for projects to accelerate payments to Australian suppliers in defence industry to mitigate the effects of COVID-19. These measures were also supported by other Government reforms to speed up payments to small business, including reducing payment times for small businesses using e-invoicing to five days. Defence began piloting five-day payment terms through e-invoicing on contracts valued up to $1 million to ensure that our financial and approval systems can support these timeframes.
In support of transparency, the Government has introduced legislation establishing the Payment Times Reporting Scheme. The scheme will require large businesses and certain government enterprises with over $100 million in annual turnover to publish information on how and when they will pay their small business suppliers. In concert with this policy, the Government is developing a Payment Times Procurement Connected Policy requiring large businesses to pay their suppliers within 20 days.