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Speaker 1: We know that the annual report's been released on the

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Speaker 1: Northern Territories by Local Plan.

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Speaker 2: It's completed by industry advocate.

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Speaker 1: Who plenty of you will know, mister Dennis Stedman, and

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Speaker 1: the review aims to evaluate the effectiveness of the scheme.

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Speaker 1: It also makes recommendations in respect to the Northern Territory

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Speaker 1: government's procurement. Now, the findings will state that government spending

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Speaker 1: in the last financial year have reached its highest level

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Speaker 1: since the initiative began in twenty seventeen, but concerns were

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Speaker 1: raised about the ability of agencies to adequately manage contracts

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Speaker 1: and monitor performance of contractors. Now, the author of that report,

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Speaker 1: Dennis Stedman, joins me on the line right now. Good

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Speaker 1: morning to you, Dennis.

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Speaker 3: Good morning Katie. How are you.

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Speaker 2: Yeah, really good? Thank you so much for your time

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Speaker 2: this morning.

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Speaker 3: Dennis.

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Speaker 1: What were the key findings of your most recent report.

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Speaker 3: Look, I think the key findings were that clearly there

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Speaker 3: has been improvement by the government in terms of the

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Speaker 3: application of the policy intent to the Buylocal Plan, which

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Speaker 3: when you boil it all down, is about trying to

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Speaker 3: preference territory businesses through the Northern Territory Government's procurement process.

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Speaker 3: So you know, I concluded this year for the first

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Speaker 3: time that there was a market improvement in that, and

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Speaker 3: I felt confident enough to say, oh, yeah, we have

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Speaker 3: we have improved, which is different to the first four

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Speaker 3: reports I've put out, where really I said the opposite.

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Speaker 1: And so, Dennis, by the sounds of it, we are,

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Speaker 1: you know, we are buying local more often, or we

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Speaker 1: are obviously you know, contracting locals more so than going

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Speaker 1: with interstate for different projects in the territory.

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Speaker 3: That's right, And you know, the statistics I published in

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Speaker 3: my report, you know, would indicate that ninety percent of

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Speaker 3: the money that was spent last morning into a year

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Speaker 3: by the territory government through procurement was with territory enterprises

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Speaker 3: territory businesses, so that you know, that's a fairly high

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Speaker 3: rate given that in past years it's sort of varied

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Speaker 3: between let's say the low seventy percents you know, through

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Speaker 3: to the mid eighties. So that's a fairly significant percentage increase,

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Speaker 3: which is fantastic.

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Speaker 2: And what do you reckon has really seen that changed, Dennis?

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Speaker 1: Is it the fact that you know that the government

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Speaker 1: is trying to make sure that they are engaging locals.

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Speaker 3: Look, I think that's partly it. You know, I've been

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Speaker 3: criticized in the past of being negative and all sorts

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Speaker 3: of things and unfair to the government about expectations. But

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Speaker 3: it's people like me bringing these matters to the attention

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Speaker 3: of government agencies, engaging with them and saying, hey, guys,

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Speaker 3: you know, is there a way that we can through

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Speaker 3: your procurement process you get that percentage up? Are the

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Speaker 3: things that we could be doing differently? And it's all

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Speaker 3: about education. And you know, five years ago or six

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Speaker 3: years ago now, when the Bylocal Plan came out, it

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Speaker 3: was pretty foreign to a lot of people in government

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Speaker 3: who were doing pro killment. So was it a prize

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Speaker 3: that it wasn't embraced as well? Perhaps is what I

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Speaker 3: should have been Not really, So there's been a fairly

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Speaker 3: long education process within government about hey, this is what

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Speaker 3: the bilocal plans is, this is what we should be

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Speaker 3: trying to do. And I've been having some over the

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Speaker 3: last eighteen months two years, some really good conversations with

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Speaker 3: the larger procuring agencies available. You know, what are the

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Speaker 3: benefits of supporting local business. And I think the message

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Speaker 3: is starting to get through, which from my perspective is

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Speaker 3: exactly what I'm looking for.

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Speaker 2: Dennis.

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Speaker 1: Obviously, we know what the positives are in terms of

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Speaker 1: local contractors and local businesses winning work. Are there any

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Speaker 1: sort of are there any negatives in the sense that

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Speaker 1: it can sometimes I don't know, can it sometimes be

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Speaker 1: a more expensive option for the Northern Territory government and

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Speaker 1: in turn the territory taxpayer.

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Speaker 3: Absolutely, there's any number of examples that I've seen that

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Speaker 3: I could point to to say, well, look we're actually

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Speaker 3: procured this good or service from this guy and it

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Speaker 3: was you know, maybe it was ten percent dearer than

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Speaker 3: the same good or service procured from someone else who

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Speaker 3: wasn't in the territory. But this is where it all

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Speaker 3: comes back to this whole concept of value for territory,

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Speaker 3: and that's what sits behind the bilocals. So that the

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Speaker 3: policy intent of the Bylocal plan is not you know,

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Speaker 3: we need to spend every single dollar with territory businesses

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Speaker 3: at all costs. It's about, well, we want to preference

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Speaker 3: territory businesses where the territory business can show that it

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Speaker 3: provides better value for territory than someone else. Now, the

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Speaker 3: value for territory is not just the price. That's what

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Speaker 3: other things does that business bring to the Northern Territory.

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Speaker 3: So there's things like employment, you know, Indigenous employment, training opportunities,

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Speaker 3: community support initiative, all sorts of things. The value that

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Speaker 3: is put on those is often hard to quantify, but

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Speaker 3: can well and truly exceed the additional amount you might

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Speaker 3: pay for the goods or service from that territory business. Therefore,

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Speaker 3: when you factor all that in together, even though you're

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Speaker 3: paying a little bit more for the goodsial service, you're

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Speaker 3: actually delivering a bigger benefit for the territory.

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Speaker 2: Yeah.

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Speaker 1: Now, Dennis, when you look at this year's report comparatively

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Speaker 1: to other years, are there any Are there any areas

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Speaker 1: where you sort of haven't seen a huge amount of progress.

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Speaker 3: Yeah. One of the major frustrations I have is around

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Speaker 3: the contractor reporting in contract managements, part of procurement. So

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Speaker 3: it's all, well, I'm fine to say, well, we're going

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Speaker 3: to give this contract to this particular company. That's not

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Speaker 3: the end of the process. You know, we as taxpayers

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Speaker 3: in the territory need to make sure that if we're

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Speaker 3: contracting to buy a box of green widgets that actually

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Speaker 3: get delivered green widgets, that they don't break the first

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Speaker 3: time we go to use them. So that is about

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Speaker 3: managing the contract properly to make sure that we're getting

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Speaker 3: what we've paid for, and then when we're not getting

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Speaker 3: what we've paid for, we can take some steps to

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Speaker 3: get that rectified along the way hopefully.

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Speaker 1: And Dennis, does that also sort of incorporate you know,

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Speaker 1: some of like larger projects where you know, where we

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Speaker 1: might you might have a contractor you know, set out

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Speaker 1: to deliver that project and the cost blows out.

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Speaker 2: Does that like, is that also part of its.

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Speaker 3: Contract Part of contract management will be management, you know

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Speaker 3: of variations. You know, variations are a significant subject for

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Speaker 3: discussion about. You know, when people are talking about other contractors,

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Speaker 3: you know they tend to this amount and then we

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Speaker 3: ended up paying fifty percent more or whatever. Now there

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Speaker 3: are good reasons why that might occur from time to time,

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Speaker 3: and if you have an effective contract management process in place,

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Speaker 3: then that will help limit the amount of variations or

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Speaker 3: cost blowouts that you might have on a project. Won't

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Speaker 3: stop them happening, because there will always be situations where

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Speaker 3: at the outset, we thought we wanted this, but as

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Speaker 3: time went on through the delivery, we actually decided well,

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Speaker 3: you know, we needed something else or something needed to

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Speaker 3: be changed, et cetera, et cetera. But contract management is

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Speaker 3: such a such a vital key to it. You know,

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Speaker 3: let's make sure we're getting what we've contracted to buy.

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Speaker 2: And so, Dennis, at the moment, are we not really

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Speaker 2: doing that? Because that is that is.

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Speaker 1: A big concern, making sure that we're you know, we're

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Speaker 1: getting like we're getting our bang for our buck.

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Speaker 2: I suppose.

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Speaker 3: I would argue that, no, we're not in all instances,

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Speaker 3: And you know, I've got the benefit of hindsight and

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Speaker 3: history to look back over the last five years say

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Speaker 3: and so, well, what does it look like today to

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Speaker 3: what it might have looked like five years ago. I

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Speaker 3: can say that with particular agencies, I can see significant

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Speaker 3: effort having been put in to improve that over the

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Speaker 3: last five years. With others, I can say probably little

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Speaker 3: or no effort. But across the government as a whole,

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Speaker 3: I think there has been more effort in addressing those

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Speaker 3: issues to make sure we are getting what we're what

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Speaker 3: we're paying for. Have we got to a point where

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Speaker 3: we can say, look, the job's done. But the answer

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Speaker 3: to that is no, are we likely to get to

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Speaker 3: that point, Probably not, because I think there will always

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Speaker 3: be instances where we can point to them and say, well,

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Speaker 3: and we didn't quite get it right on this one

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Speaker 3: or that one. But there is an improving trend, but

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Speaker 3: there's still work to be done. You know. One of

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Speaker 3: the things that really annoys me about poor contract management

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Speaker 3: and contractor reporting is that I've seen many instances of

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Speaker 3: contractors not delivering what they were contracted to do, and

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Speaker 3: because the contract wasn't properly managed and it wasn't reported

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Speaker 3: back to the contractor for whatever reason, that contractor goes

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Speaker 3: and wins another contract. Now, the poor performance on the

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Speaker 3: last contract is not taken into account because it hasn't

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Speaker 3: been documented. And so what are we actually doing when

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Speaker 3: that happens? All we rewarding contractors for poor behavior, and

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Speaker 3: we're actually reinforcing to that contractor, Hey, it's okay not

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Speaker 3: to deliver what you said you were going to deliver.

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Speaker 2: Because we'll give you another job.

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Speaker 3: Happens when that happens, why is he going to change?

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Speaker 2: Yeah, that's exactly right.

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Speaker 1: I find it quite astonishing because I think that, you know,

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Speaker 1: if if you were a private enterprise or even just

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Speaker 1: a you know, an everyday person who contracts somebody, let's say,

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Speaker 1: to build your house or to renovate your bathroom or whatever.

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Speaker 1: If they don't deliver on what you've employed, you know,

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Speaker 1: what you've contracted them to do.

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Speaker 2: You're not gonna You're not going to go back and

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Speaker 2: get them again.

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Speaker 3: No, that's exactly right.

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Speaker 1: Yeah, yeah, or Dennis, I find it fascinating. So where

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Speaker 1: to from here with your with your latest report. I

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Speaker 1: know that obviously you always do they always, you know,

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Speaker 1: get taken to the government or have to. I'm assuming

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Speaker 1: they've got to have a good read through things. Do

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Speaker 1: they take those recommendations on look, they do not all

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Speaker 1: of them.

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Speaker 3: There are things that I recommend that the government says, no,

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Speaker 3: we're not going to do that. I'll get that. That's

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Speaker 3: their prerogative. But there are a number of I think

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Speaker 3: I've made twenty one recommendations for approval, sorry, nineteen recommendations

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Speaker 3: from improven in my report. The government will look at

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Speaker 3: those and take the ones on board that they think

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Speaker 3: need addressing. And I have to say, and I mentioned

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Speaker 3: it in my report, there's actually a Procurement Framework review

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Speaker 3: being undertaken by an independent consultant at the moment, and

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Speaker 3: a number of the recommendations that I've made in my

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Speaker 3: report will be covered in that review. So at the

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Speaker 3: outcome of that review, which will be later on this

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Speaker 3: year sometime, perhaps the government will address some of the

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Speaker 3: issues I've raised, perhaps they'll reject some of the issues

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Speaker 3: I've raised. But I look forward to the completion of

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Speaker 3: that review so that you can get a pretty fair

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Speaker 3: idea of, you know, whether I need to stop being

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Speaker 3: on about a particular subject because the government's going well,

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Speaker 3: we're never going to change that.

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Speaker 2: Yeah, yeah, fair point.

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Speaker 1: Well, Dennis Stedman, the nt By local industry advocate. We

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Speaker 1: always appreciate your time so much for coming on and

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Speaker 1: having a chat with me this morning.

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Speaker 3: No, Katie, thanks for the opportunity.

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Speaker 2: Thank you,