By Darian Macey, June 28 2024
On the 18th of June, during her presentation to more than 300 delegates at the Hellenic Club in Canberra, Ese Rainey, Executive Director at Capital Facilities and Infrastructure Branch, Security & Estate Group, Department of Defence, highlighted two critical policies that will come into effect on the 1st of July. These policies, the Environmental Sustainable Procurement Policy (ESP) and the Australian Skills Guarantee Procurement Connected Policy (ASGPCP), are set to significantly impact Defence contractors. Here’s a detailed look at these policies and their implications for contractors.
Environmental Sustainable Procurement Policy
The ESP Policy is part of the Australian Government’s commitment to reducing the environmental impact of its procurement activities. Rainey explained, “The Environmental Sustainable Procurement Policy aims to ensure that government officials purchase goods and services that reduce greenhouse gas emissions, increase materials circularity, and promote environmental sustainability.” This policy applies to construction services projects valued at or above $7.5 million starting from 1 July 2024, and will extend to other categories such as textiles, ICT goods, and furniture by July 2025.
Key elements of the ESP Policy include:
- Sustainability Outcomes: Contractors must meet specific sustainability targets, including reducing greenhouse gas emissions and using recycled materials.
- Circular Economy Principles: The policy encourages practices that keep materials in use longer and reduce waste.
- Reporting Requirements: Contractors are required to report on their environmental performance, ensuring transparency and accountability.
Australian Skills Guarantee Procurement Connected Policy
The ASGPCP, an election commitment, is designed to address skills shortages and promote workforce development through government procurement. As Rainey outlined, “The Australian Skills Guarantee will introduce targets for apprentices, trainees, and cadets, applying to projects of ten million dollars or more with incremental increases in percentage targets.”
Key aspects of the ASGPCP include:
- Apprenticeship Targets: From 1 July 2024, 10% of all labour hours on major projects must be undertaken by apprentices and trainees. For projects valued over $100 million, the percentage commitments will be higher.
- Women’s Participation: The policy sets specific targets for women’s participation in apprenticeships and trades, with a goal of increasing these numbers annually.
- Compliance and Reporting: Contractors will be required to submit detailed project plans and regular updates on their progress. A new reporting system will be implemented, with data uploaded regularly to ensure compliance.
Implications for Defence Contractors
These policies are set to reshape how Defence contractors approach their projects. For the ESP Policy, contractors need to incorporate sustainable practices and materials into their projects, ensuring they meet the stringent environmental targets set by the government. For the ASGPCP, contractors will need to develop robust apprenticeship and training programs, particularly focusing on increasing the participation of women in trades.
Rainey explained that her team has been working with the Department of Employment and Workplace Relations on how to integrate the new policy into contracts with Defence moving forward, stating, “Our intent is to likely include that within the local industry participation response.”
Conclusion
The introduction of these policies marks a significant shift in how the Australian Government manages Defence procurement, emphasising sustainability and skills development. Defence contractors must adapt to these new requirements, integrating sustainable practices and focusing on workforce development to ensure compliance and continued success in securing government contracts.
For more detailed information on the ESP Policy and ASGPCP, contractors can refer to the official documentation provided by the Department of Climate Change, Energy, the Environment and Water and the Department of Employment and Workplace Relations.
Author: Darian Macey
Darian is a former Engineering Officer with the RAE with tertiary qualifications in Engineering and Project Management. He is a leading practitioner within Australia's NSI sector with previous employment in Government, project management and building contractor organisations.
