Council Makes Right Call On Local Procurement But More Work To Be Done – 23 August

The Christchurch City Council have reached the right decision by choosing to include local preference provisions in their procurement policy say the New Zealand Manufacturers and Exporters Association (NZMEA). However, there is still work to be done on the exact process.

NZMEA Chief Executive John Walley says, “The Council need to be commended for their decision to maintain local preference as part of their procurement policy. While the Council is under debt pressure with a lot of infrastructure to rebuild, a focus on local preference will help to improve this situation in the long run by providing more long-term growth in the region and the related rates revenue. The task now is to pinpoint exactly how local preference will be implemented.”

“It is worth noting that a margin of 25% in price was considered appropriate in the buy American preference introduced in the first Obama stimulus package.”

“With New Zealand’s small population it is difficult for firms to attain the scale necessary before entering into export markets. The one area such scale does exist is in the public sector where contracts can be large enough to help firms to achieve some scale and drive innovation. One way to kill local innovation is to demand in any tender that only ‘proven’ solutions should be offered. The scale issue makes it even more important for our rates and taxes to be spent locally whenever possible.”

“A policy set that accommodates the impact of transient issues like exchange rates, the development and support of capability in the economy, the maintenance of capacity in economy, and lifetime costs such as service, upgrade and maintenance should be the goal of the Council.”

ENDS

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