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What is a LIPP – Local Industry Participation Policy?

A Local Industry Participation Policy (LIPP) in local government procurement, particularly in the Australian Capital Territory (ACT), aims to ensure competitive local businesses, including Small and Medium Enterprises (SMEs), have the opportunity to respond to procurement opportunities offered by the ACT Government. The policy sets specific guidelines for different procurement values:

1. Procurements between AUD 25,000 and AUD 200,000: These require obtaining three quotes, with at least one quote from a business in the local Canberra region and one from an SME.

2. Procurements between AUD 200,000 and AUD 5 million: Respondents must complete an Economic Contribution Test (ECT), which is allocated a 10% weighting in the evaluation process.

3. Procurements above AUD 5 million: These require a Local Industry Participation Plan, also allocated a 10% weighting in the evaluation process.

Local Industry Participation Policies (LIPP) in Australian local government procurement aim to promote the use of local businesses and suppliers in government projects and contracts. Different states and territories have implemented their own versions of these policies, with specific guidelines and requirements.

In Australian local government procurement, Local Industry Participation Policies (LIPPs) are implemented to ensure local businesses, particularly small and medium-sized enterprises (SMEs), are given opportunities to participate in government contracts. These policies vary across different regions in Australia, including the Australian Capital Territory (ACT), South Australia, and Western Australia. Here’s a detailed look at these policies:

Canberra Region Local Industry Participation Policy (ACT)

• Implementation: As of 1 January 2017, all Territory entities in the ACT must consider local capability and economic benefits for the Canberra Region when determining the best procurement outcome.
• Procurement Thresholds: For procurements $200,000 or above (GST inclusive), LIPP requirements are stated at the initial invitation stage. Businesses responding to a Territory entity procurement between $200,000 and $5 million are required to complete an Economic Contribution Test (ECT). For procurements $5 million and above, respondents must submit a Local Industry Participation (LIP) plan​​.

South Australian Industry Participation Policy

• Compliance: State Government Agencies and private parties contracting to the Government of South Australia must comply with this policy and its supporting procedural and reporting guidelines. This policy includes completing an Industry Participation Plan for certain contracts​​.

Western Australian Industry Participation Strategy (WAIPS)

• Focus on SMEs: WAIPS aims to provide locally based businesses with better access to and competition for Western Australian Government supply contracts, primarily focusing on SMEs.
• Participation Plan Requirements:
  • Types of Plans: Prospective suppliers must submit a participation plan as part of their WA Government tender bid. Depending on the contract value, they may need to prepare either a core or full participation plan.
  • Core Plan: Requires estimates of workforce numbers, demonstrations of local economic benefits, and opportunities for local industry. Information on subcontractors over $20,000 is also sought.
  • Full Plan: Requires the same information as the core plan, with additional details on subcontractor requirements and supply packages above $100,000.
  • Thresholds: Applies to goods and services in metropolitan areas for contracts $1 million and above, and in regional areas for contracts $500,000 and above. For housing and works, the thresholds are $3 million in metropolitan areas and $500,000 in regional areas.
• Assessment and Weighting: Participation plans are used in the tender bid evaluation process, with their assessment based on the likelihood of achieving local participation commitments, the offering of full, fair, and reasonable opportunities to local businesses, and the willingness to work with the government on supply chain and import replacement opportunities. They are weighted at either 10 or 20% in the tender bid evaluation, depending on the procuring agency’s discretion​​.

These LIPPs across different regions of Australia reflect a commitment to fostering local industry, especially SMEs, in government procurement processes. They ensure that local businesses are not only given the opportunity to participate in government contracts but also that their involvement is factored into the evaluation of tender bids, thereby promoting local economic development and job creation.

If this all sounds too much, and you need LIPP or WAIPS writing help or tender preparation help or assistance, please do not hesitate to call Michael on 0411717460 or email info@myconsulting.com.au.