The New South Wales (NSW) Government is set to introduce legislation that will ban suppliers found guilty of serious misconduct from securing state contracts.
This move is part of a broader effort to modernise the state’s procurement framework and ensure public funds are spent with integrity, the government said in a media release.
The proposed procurement reforms will establish a debarment regime, giving the NSW Government the authority to exclude suppliers who engage in fraudulent or corrupt practices, or who fail to comply with taxation laws.
The new rules will apply to the state’s annual $42 billion spend, making it the first time NSW has had such power.
“It’s essential that public money is spent responsibly and with integrity,” said Minister for Domestic Manufacturing and Government Procurement, Courtney Houssos.
“This announcement begins crucial reforms to ban dodgy operators and maintain public trust in the way the NSW Government is spending taxpayers’ funds.”
The debarment regime is designed to ensure that any action taken against a supplier also applies to any subsequent ‘phoenix’ operations—companies that emerge from the ashes of a banned entity.
This measure is intended to prevent unscrupulous businesses from rebranding and continuing to exploit government contracts.
“It means dodgy companies won’t get an unfair advantage over companies that act in good faith and meet the ethical standards and behaviours the NSW Government expects from its suppliers,” Houssos explained.
“Thousands of hard-working, honest suppliers engage with the NSW Government every year. This regime will make sure we are not engaging with bad apples.”
The reform is a response to recommendations from the Independent Commission Against Corruption (ICAC), which in its April 2024 Operation Hector report, highlighted the need for a debarment regime.
While similar schemes operate in Western Australia and various international jurisdictions, this marks a first for NSW.
“We were left with a muddled and chaotic procurement system by the previous Liberal-National Government,” Houssos added.
“The Minns Labor Government’s debarment scheme will continue our program of reforms to deliver necessary change.”
The NSW Government plans to consult extensively with industry stakeholders to develop the regime, aiming to bolster transparency and protect taxpayer funding from unscrupulous operators.
