From Compliance to Capability in NSW Local Government Procurement

Introduction: A Turning Point for Local Government Procurement in NSW

Procurement in New South Wales local government has long been seen as a compliance exercise — a checklist of quotations, thresholds, and tender procedures under the Local Government Act 1993 (NSW) and Local Government (General) Regulation 2021.

But as community needs grow more complex and resources tighten, councils are being asked to deliver more value, more innovation, and more impact — without more funding.

This shift is forcing a rethink: procurement can no longer just be about compliance; it must be a strategic capability.

1. The Traditional Compliance Lens

Many NSW councils still treat procurement as a risk-control mechanism rather than a value-creation tool.

Procurement teams are often positioned as “process gatekeepers” — ensuring tenders comply with regulation, evaluation reports are watertight, and contracts are signed off correctly.

While compliance remains critical (and non-negotiable), this narrow view can limit the ability of councils to use procurement strategically to:

• achieve better social, environmental and economic outcomes;
• engage early with the market to drive innovation;
• build partnerships that deliver value over the contract life, not just at the point of award.

The result is that procurement becomes reactive, transactional, and disconnected from the council’s broader strategic priorities.

2. Procurement as a Strategic Enabler

Leading councils across NSW — and nationally — are reframing procurement as a strategic enabler rather than a procedural function.

A strategic procurement function:

• aligns with the council’s corporate and community strategic plans;
• uses data and forward planning to forecast demand and coordinate purchasing across departments;
• engages early with suppliers and regional partners to shape the market, not just respond to it;
• Measures performance and outcomes, not just compliance;
• Integrates ESG, Aboriginal participation, and local economic outcomes into procurement strategies.

This requires a cultural and structural shift — one that sees procurement staff not as rule enforcers, but as commercial advisors and strategic partners to service delivery teams.

3. The Capability Challenge

To make this shift, councils must build new capabilities across governance, strategy, and commercial practice.

Procurement teams need support to:

• develop category management and pipeline planning skills;
• understand risk allocation and contract performance management;
• build confidence to engage early with the market while maintaining probity;
• use data and technology to improve visibility and reporting;
• collaborate across councils and regions to leverage scale and shared expertise.

At the governance level, executives and councillors also need to see procurement differently — as a lever for innovation, efficiency, and regional development.

4. Moving from Policy to Practice

Many councils already have sound procurement policies that refer to “value for money,” “sustainability,” and “strategic alignment.” The challenge is turning those words into action.

That means embedding procurement into:

• Early project design — ensuring procurement strategies are developed at the concept stage, not after budgets are set;
• Integrated planning and reporting frameworks — linking procurement planning to the Delivery Program and Operational Plan;
• Performance measurement — capturing not just spend and compliance, but also savings, social outcomes, and innovation metrics.

5. The Role of Leadership and Governance

Ultimately, elevating procurement requires leadership. General Managers, Directors, and Audit & Risk Committees must reinforce that good procurement is good governance.

Strong leadership can shift procurement from being seen as a compliance burden to being valued as a driver of trust, efficiency, and community benefit.

Conclusion: From Gatekeeping to Value Creation

The evolution of local government procurement in NSW is not about relaxing compliance — it’s about layering strategic capability on top of it.

Councils that invest in procurement capability and culture are better positioned to achieve tangible outcomes:

• Better supplier performance
• More resilient local economies
• Greater transparency and trust
• Sustainable, measurable community impact

In short, the councils that move procurement from “tick box” to “toolbox” will be the ones best equipped to meet the next decade’s challenges.

How Muscat Tanzer Can Help Councils Elevate Procurement Capability

Muscat Tanzer partners with councils across New South Wales to move procurement from compliance to strategic impact.

We help build the legal, governance, and commercial frameworks that enable councils to plan, engage, and contract with confidence — while staying fully compliant with the Local Government Act 1993 (NSW) and the Local Government (General) Regulation 2021.

Our support includes:

• reviewing and modernising procurement policies and frameworks
• advising on early market engagement and probity-safe innovation
• designing contracting and risk management strategies that reward performance, not just process
• providing training for councillors and staff to strengthen capability and governance

We help councils transform procurement from a procedural necessity into a strategic tool for community value and trust.