The Move to Regional / Shared Services Procurement in Western Australia

Why collaboration is becoming essential for value, capability, and compliance in local government procurement.

Across Western Australia, local governments are facing mounting pressure to deliver more with less — tighter budgets, higher community expectations, and increasing compliance obligations. Against this backdrop, regional and shared services procurement is emerging as one of the most practical ways for councils to achieve efficiency, probity, and innovation without sacrificing local control.

Shared procurement is no longer just about buying office supplies together — it’s about strategically pooling resources, expertise, and market leverage to deliver better outcomes for ratepayers.

1. The Drivers for Shared Procurement

Several factors are pushing Western Australian councils toward more regionalised approaches:

Efficiency and Scale

Smaller and mid-sized councils often struggle to achieve competitive pricing or attract high-quality suppliers on their own. By aggregating demand, regional groups can access better rates, higher-quality providers, and more complex services that individual councils could not procure alone.

Capability and Resourcing

Procurement compliance requires specialist expertise that many councils cannot justify maintaining internally. Shared procurement arrangements — whether through regional subsidiaries, alliances, or hosted services — allow councils to share skilled staff, probity advisors, and systems, improving governance and consistency.

Compliance and Risk Management

The Local Government Act 1995 (WA) and Functions and General Regulations set detailed tendering and transparency obligations. Shared procurement allows councils to centralise compliance oversight, reduce duplication, and improve record-keeping — critical in an era of increased scrutiny from the OAG and CCC.

Innovation and Market Engagement

Regional collaboration creates a larger, more attractive market opportunity for suppliers — encouraging innovation and long-term partnerships that benefit all participating councils. Early market engagement at a regional level can also drive sustainable and social procurement outcomes.

2. Models of Shared Procurement in WA

Shared procurement can take several practical forms, depending on governance appetite and maturity:

• Regional Local Government Alliances or Consortia — Informal agreements between neighbouring councils to collaborate on specific tenders or categories (e.g. waste services, fleet, ICT).
• Lead Agency Models — One council runs the procurement process on behalf of others under a shared MOU or inter-council agreement.
• Regional Subsidiaries or Corporate Entities — Formal joint entities established under Part 3 Division 4 of the Local Government Act to deliver shared procurement, project management, or service delivery.
• Third-Party Aggregators — Some councils engage WALGA, regional development commissions, or private aggregators to manage tenders and contract panels regionally.

Each model presents different governance, risk allocation, and accountability considerations — and councils must ensure compliance with the Act, their procurement policy, and their individual delegations.

3. The Legal and Governance Challenges

While collaboration delivers clear benefits, it also brings legal complexity:

• Delegation and Authorisation — Councils must ensure that shared procurement decisions remain within their legal powers and are properly delegated.
• Contractual Relationships — Clarity is required on which entity is the contracting party, how liability is shared, and how disputes are resolved.
• Probity and Transparency — Joint procurements can blur accountability. Councils must maintain a clear audit trail and ensure consistent documentation across participants.
• Policy Alignment — Inconsistent procurement policies between councils can create procedural gaps or unfairness if not harmonised at the outset.

These issues are not barriers — but they require careful design and legal oversight to ensure the collaboration remains compliant and defensible.

4. How Councils Can Make It Work

Successful regional procurement begins with a strategic framework, not just an MOU. Councils should:

1. Identify shared categories with high spend or common suppliers.
2. Align procurement policies and delegations to support collaboration.
3. Establish clear governance structures — decision-making, probity roles, dispute management.
4. Develop standard templates and evaluation criteria for consistent, transparent processes.
5. Engage early with suppliers to design scalable, region-friendly contracts.

Building trust between participating councils is critical — both politically and operationally — to avoid territorial issues or inconsistent implementation.

5. The Future of Regional Procurement in WA

The trend toward shared services is accelerating, supported by State initiatives promoting collaboration and capability building. In the coming years, we are likely to see more regional procurement hubs, joint contract management teams, and shared panels for high-value categories like waste, ICT, and infrastructure maintenance.

The councils that act early — and invest in sound governance and legal frameworks — will be best placed to lead this transition and capture the benefits of scale without losing local accountability.

6. The Takeaway

Regional and shared services procurement is not about outsourcing local decision-making — it’s about building stronger, smarter, and more resilient councils.
By collaborating strategically, Western Australian local governments can strengthen compliance, achieve better value for money, and deliver higher-quality outcomes for their communities — together.

As Western Australian councils seek to deliver more with less, collaboration is becoming not only practical — but essential. Our firm helps councils design, implement, and govern shared procurement and regional service arrangements that are legally sound, strategically aligned, and operationally efficient.

How Muscat Tanzer can help

At Muscat Tanzer we understand the practical realities of local government procurement — and the unique challenges of collaboration. We help councils establish the right legal and governance structure to enable collaboration and capture the efficiencies of scale —while maintaining local integrity and community trust.

Legal Framework and Governance Structuring

• Advice on forming Regional Local Governments under Part 3 Division 4 of the Local Government Act 1995 (WA)
• Drafting and negotiation of inter-council agreements, MOUs, and joint procurement frameworks
• Advice on delegations, decision-making authority, and accountability lines
• Risk and liability allocation between participating councils

Shared Procurement Policy and Framework Development

We ensure your shared procurement activity aligns with legislative requirements and your internal governance expectations.

• Development or harmonisation of procurement policies across participating councils
• Frameworks for shared tendering, evaluation, and contract award
• Clear documentation and approval pathways to maintain transparency and probity
• Guidance on WALGA or regional subsidiary procurement alignment

Regional Tendering and Market Engagement

We provide end-to-end legal and probity support for collaborative procurement processes.

• Preparation and review of regional tender documents and evaluation criteria
• Advice on early market engagement and pre-tender consultation
• Oversight of joint evaluation panels to ensure fairness and defensibility
• Drafting regional contract templates and shared contract management protocols

Establishment of Regional Subsidiaries and Shared Entities

When councils want to go beyond informal collaboration, we assist in creating formal entities to manage shared procurement or service delivery.

• Preparation of regional subsidiary charters and constitutions
• Advice on Ministerial approval and compliance processes
• Governance advice for regional boards and management teams
• Ongoing corporate, contractual, and probity support

Training and Capability Building

We help procurement and governance teams build the confidence to operate collaboratively while maintaining compliance.

• Governance and probity workshops for regional procurement teams
• Councillor and executive briefings on shared services legal frameworks
• Training on conflict management, audit trails, and documentation standards

Legal Assurance and Probity Audits

We provide independent probity and compliance reviews to safeguard participating councils.

• Independent audit of joint procurement processes
• Probity advice during live tenders
• Post-award reviews to identify lessons and improvement opportunities