Public procurement is a major driver of economic activity, constituting 15% of GPD – higher than the OECD average of 11%. Through competitive tender processes, governments in Australia have awarded 13% of all public procurement expenditure to international bidders.
In awarding tenders for major projects, governments must balance public expectations with the need to ensure that major expenditure commitments represent value for money.
Often, the purported cost-savings associated with ‘offshoring’ major procurement is cited by policymakers as a rationale for awarding international bidders with major contracts instead of domestic bidders.
This report considers the merit of this argument, examining six major public procurement decisions by the NSW Government to determine whether the decision to offshore these projects was, ultimately, value for money after considering the broader economic benefits associated with domestic procurement.