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Gov't introduces new procurement guidance to support suppliers amid COVID-19

The measures outlined in the new guidance include relaxing or waiving some contractual rights where appropriate to address COVID-19 circumstances

The federal government has issued new procurement guidance to its public entities in a bid to help support suppliers as they weather the disruptions caused by the ongoing coronavirus pandemic. 

“The COVID-19 disruption has had an adverse effect on the supply of equipment, materials and services required to carry out normal business processes for the government and the economy more broadly,” Minister for Finance Mathias Cormann said in a statement.

“To ensure they are making appropriate arrangements with suppliers impacted by the Coronavirus health crisis, the Department of Finance [has] set the expectations for engagement by government agencies.

“New guidance has been published asking Commonwealth departments and agencies to work collaboratively with suppliers to ensure business continuity and to take action, where appropriate, to ensure that supply chains are able to be maintained,” he said.

The measures outlined in the new guidance include relaxing or waiving some contractual rights where appropriate to address COVID-19 circumstances and generally avoiding the exercising of termination rights, liquidated damages or revised payment arrangements.

“The government also expects agencies to pay suppliers quicker than the maximum 20 day payment terms, and is making payments of electronic invoices within five days where suppliers and agencies have adopted e-invoicing consistent with the international standard,” Cormann said. 

“Small invoices under $10,000 should be paid immediately by card payment systems. This will assist businesses with their cash flow and support jobs,” he added.

Moreover, the Department of Finance and the Department of Defence, both big spenders on IT, have established a Procurement Hub, which sees the two departments work together to assist agencies with specific COVID-19 related procurement activities. 

“The Procurement Hub is providing assistance to agencies through advice, technical solutions and resources where required,” Cormann said, noting that the government will continue to look for opportunities to provide support to the Australian economy and to keep businesses afloat.