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.

Over the coming weeks Muscat Tanzer will be turning our attention from Western Australia to New South Wales and delivering an article Series we have called Procurement as a Strategic Enabler – Strengthening Council Capability Across NSW.

Procurement within NSW local government has historically focused on compliance — ensuring transparency, probity, and value for money. However, this narrow focus can unintentionally limit innovation, market engagement, and long-term planning.

The NSW Government and the Office of Local Government now encourage councils to take a more strategic approach, positioning procurement as an enabler of:

• Efficient service delivery
• Economic development and regional resilience
• Sustainability and social outcomes
• Governance and community trust

Strategic procurement aligns decision-making with long-term planning under the IP&R Framework and turns procurement from an administrative function into a core capability for strategic delivery.

This Series focusses on strategic procurement as driver of capability, innovation and regional value, and how councils can move from compliance to leadership.

Why Procurement Needs to Evolve

1. Compliance is the Baseline — Not the Strategy

While adherence to policy and regulation is non-negotiable, compliance alone does not deliver better outcomes. Councils must move from procedural assurance to proactive planning and performance measurement.

2. Procurement as a Driver of Economic and Social Value

Procurement is one of the largest levers councils hold to support local business participation, Aboriginal engagement, environmental outcomes and regional collaboration.

3. Market Engagement and Capability Building

Strategic procurement involves earlier and more open engagement with suppliers — within probity boundaries — to shape markets, encourage innovation, and attract better competition.

4. Governance, Risk and Transparency

Elevating procurement governance ensures consistency in decision-making, reduces probity exposure, and builds public trust in how ratepayer funds are spent.

What Strategic Procurement Looks Like

A strategically mature council will:
✅ Integrate procurement planning into its Resourcing Strategy and Delivery Program
✅ Develop a forward procurement pipeline to signal opportunities to the market
✅ Use data and spend analysis to inform decisions and demonstrate performance
✅ Align evaluation criteria with community and sustainability outcomes
✅ Build internal capability and accountability frameworks for procurement staff and managers

Key Enablers

1. Policy and Framework Alignment
   Update procurement policies and delegations to align with IP&R objectives and the Local Government Regulation 2021.
2. Market Engagement Protocols
   Develop structured early engagement protocols to encourage supplier dialogue without compromising probity.
3. Capability and Training
   Build staff confidence and professional development pathways to ensure consistency and accountability.
4. Data and Technology
   Use procurement systems, dashboards and analytics to manage pipelines, contracts and supplier performance.

Our upcoming article topics include:

1. From Compliance to Capability: Elevating Procurement as a Strategic Function – Most NSW councils still treat procurement as a procedural task. This article reframes it as a strategic lever for achieving corporate objectives and community outcomes, aligning with the Office of Local Government (OLG)’s focus on integrated planning and reporting, helping councils evolve governance and policy frameworks.
2. Local Economic Development Through Strategic Procurement – How councils can structure procurement to strengthen regional supply chains, small and medium-sized enterprise (SME) participation, and local content, within NSW probity and competition laws. Ties procurement directly to community wellbeing and economic sustainability.
3. Procurement Planning Under the Integrated Planning and Reporting Framework: The Missing Link – Explores how councils can integrate long-term procurement planning with delivery and operational plans, to link spending with measurable outcomes. Brings procurement into the core of the council’s strategic planning cycle, not an afterthought.
4. Collaborative and Shared Procurement Models: Delivering Scale Without Losing Control – Reviews the legal, governance and efficiency benefits of regional procurement alliances and shared service models between councils. Highly topical for smaller councils under fiscal pressure and the OLG’s encouragement of resource-sharing.
5. Early Market Engagement: Getting Ahead of the Tender –How NSW councils can safely conduct pre-tender market sounding and information sessions to drive innovation and competition. Connects probity and innovation, two themes often seen as conflicting.
6. Outcome-Based Procurement: Paying for Results, Not Activities – how councils can link contract payments to measurable performance outcomes within the legislative framework. Supports councils pursuing performance-based funding and continuous improvement agendas.
7. Building Procurement Capability: From Policy to Practice – Focuses on training, templates and governance structures that enable staff to apply strategic procurement consistently. Addresses the gap between procurement frameworks and practical capability; a common council pain point.
8. The Role of Legal and Probity Advisors in Strategic Procurement – Outlines how external advisors add value through early engagement, governance, probity, and drafting fit-for-purpose contracts. Proactive partners in strategic implementation, not just compliance.
9. Embedding Environmental, Social, and Governance (ESG) and Circular Economy Principles in Procurement – How councils can use procurement to achieve sustainability goals, manage climate risk, and stimulate the circular economy. Perfect alignment with NSW Government policy priorities and community expectations.
10. Procurement in Infrastructure Delivery: Managing Risk Across the Lifecycle – Discusses integrated procurement strategies for major works under the Local Government (General) Regulation 2021 and public works exemptions. Appeals to councils with large capital programs or regional infrastructure pipelines.

Keep an eye out for this soon to be released Series, and if you would like more information in the meantime in relation to any of these topics, please let us know.

How We Can Help

At Muscat Tanzer we work with NSW councils to embed procurement as a strategic and compliant function.

Our services include:

• Procurement framework and policy reviews
• Governance and probity advice
• Early market engagement and pipeline planning
• Contract design and outcome-based models
• Council training and capability building

We help councils move from procurement as process to procurement as performance — strengthening governance and delivering measurable community benefit.

As always, the draft Queensland Procurement Policy (QPP) 2026 does not apply to local governments, including councils. For many councils, this may suggest that the policy is largely irrelevant to their day-to-day procurement operations under the Local Government Act 2009 and Local Government Regulation 2012. However, while the QPP does not impose any direct obligations on councils, it still has practical influence, strategic relevance, and offers several opportunities for councils to leverage.

Why the QPP doesn’t directly apply to Councils

Councils remain governed by their own legislative procurement framework, which requires councils to:

• ensure value for money;
• promote open and effective competition;
• act ethically and fairly;
• manage risks; and
• consider the local government principles.

The QPP is developed for Queensland Government departments and statutory bodies, not councils. This separation preserves the independence of councils to set procurement policies suited to their scale, markets and regional priorities.

Why the QPP still matters to Councils

Even though the QPP doesn’t apply directly, State Government policies often set directional expectations for the public sector. Councils interact with these expectations whenever:

• industry compares council procurement approaches to State Government standards;
• joint or collaborative procurement activity involves both State agencies and councils;
• suppliers expect a degree of alignment across government tiers; or
• funding programs expect alignment with State policy objectives.

For these reasons, the QPP can influence how stakeholders view the maturity of a council’s procurement framework.

Key impacts on councils

Supplier and industry behaviour

Contractors operating across Queensland increasingly benchmark public buyers against QPP-style requirements, particularly around sustainability, social outcomes, and ethical supply chains. Councils may face pressure to respond to similar expectations.

Funding and grant alignment
State-funded infrastructure and community programs may reference QPP-style standards, meaning councils that mirror or partially adopt QPP principles may find compliance simpler.

Procurement modernisation
The QPP’s emphasis on early market engagement, capability uplift, digital procurement tools and social impact procurement can serve as a useful benchmark for councils seeking to update procurement policies or systems.

Opportunities for councils

Voluntary alignment where it adds value
Councils can selectively adopt QPP principles, such as supplier transparency, sustainability criteria or enhanced probity, without being bound by the full obligations.

Stronger collaborative procurement
Alignment with QPP methodologies can make it easier for councils to partner with State agencies or neighbouring councils on shared infrastructure, sustainability initiatives, or strategic procurement pipelines.

Supplier attraction and market confidence
Where councils adopt (or adapt) QPP-aligned practices, suppliers receive consistent signals across State and local government, reducing bid costs and increasing participation, particularly for major capital projects.

Demonstrating procurement maturity
Referencing QPP-style objectives in local procurement policies can help councils showcase robust governance and industry-best practice without adopting rigid State-based rules.

How Muscat Tanzer can assist Councils

We help councils translate QPP developments into practical, council–specific solutions, including:

• reviewing and updating council procurement policies to align (where useful) with key QPP principles;
• designing procurement strategies that leverage early market engagement and supply chain improvements;
• advising on joint procurement or State-local government collaborations;
• providing probity, evaluation and documentation support for major procurements.

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

Across Western Australia, local governments are facing increasing scrutiny over procurement integrity, transparency, and governance. Audit reports, CCC investigations, and local inquiries consistently reveal the same pattern — councils have strong procurement policies on paper, but inconsistent implementation in practice. Procurement governance failures rarely stem from bad intent; they arise from weak systems, unclear roles, and cultural complacency. Understanding where councils get caught is the first step to strengthening probity and performance.

1. The Common Governance Pitfalls

a. Policy–Practice Gaps

Many councils have up-to-date procurement policies, but staff operate on outdated templates or informal workarounds. This leads to inconsistent application of thresholds, exemptions, and documentation — creating exposure even where the intent is compliant.

b. Poor Record Keeping

Failure to maintain clear audit trails — particularly around evaluation scoring, conflict-of-interest declarations, and approval pathways — remains one of the most common findings in OAG and CCC reviews. Inadequate records make it difficult to defend decisions when challenged, and can undermine community confidence.

c. Lack of Separation of Duties

Combining roles — such as specification drafting, evaluation, and contract management — creates a perception (or reality) of bias. Smaller councils are particularly at risk due to limited resources, but must still demonstrate procedural independence and probity controls.

d. Overuse of Exemptions and Variations

Procurement exemptions, direct sourcing, and post-award variations are legitimate tools — but when poorly justified or undocumented, they signal governance breakdown. Repeated use of the same suppliers without market testing can attract allegations of favouritism or anti-competitive behaviour.

e. Weak Contract Management

Even well-run tenders can fail if the contract phase is not properly governed. Missing KPIs, poor performance monitoring, and ad hoc extensions all dilute accountability and erode value for money.

2. The Governance Foundations That Work

Clear Frameworks

A strong procurement framework sets out the link between legislation, policy, procedures, and delegated authority. Councils should ensure their documents are consistent, accessible, and periodically reviewed.

Defined Roles and Responsibilities

Councils should formally assign procurement responsibilities to distinct officers or panels — ensuring checks and balances between the requester, approver, and evaluator.

Transparent Decision-Making

All key decisions — particularly regarding exemptions, evaluation results, and contract awards — should be documented and capable of public scrutiny. Transparency is not just a compliance measure; it is a cornerstone of trust.

Probity Oversight

Independent probity advisers or internal reviewers can add rigour to higher-risk or high-value procurements. Their role is to monitor fairness, not to slow the process — a distinction that must be made clear to staff and elected members.

Training and Capability

Governance failures often reflect gaps in capability. Councils should invest in regular procurement and probity training, particularly for staff involved in specification drafting, evaluation, or negotiation.

3. The Role of Leadership and Culture

Governance is not just about process — it is about leadership tone and organisational culture. Where CEOs and senior managers actively reinforce the importance of probity and fairness, staff are empowered to speak up when something doesn’t look right. Embedding governance into performance metrics, induction programs, and risk registers ensures procurement integrity becomes part of how councils do business — not a compliance afterthought.

4. How to Stay Off the Watchlist

To avoid governance failure and external scrutiny, councils should:
1. Conduct annual internal audits of procurement activity.
2. Review exemption and variation trends for red flags.
3. Engage independent probity support for high-risk procurements.
4. Ensure councillors are briefed on their role and boundaries in procurement decisions.
5. Strengthen contract management systems to track performance, extensions, and spend.

5. The Takeaway

Most procurement governance failures are preventable. They result not from corruption, but from a lack of alignment between policy, people, and practice. By tightening systems, clarifying roles, and reinforcing culture, councils can safeguard both probity and performance — ensuring procurement decisions stand up to scrutiny and deliver tangible value to the community.

How Muscat Tanzer Helps Councils Strengthen Procurement Governance

At Muscat Tanzer, we help councils move from compliance risk to confident governance. We understand the operational pressures local governments face — tight timeframes, limited resources, and public scrutiny — and provide practical legal and strategic support to make procurement both compliant and effective.

1. Procurement Framework and Policy Review

We assess your procurement and contract management policies against the Local Government (Functions and General) Regulations 1996 (WA), State Supply Commission Guidelines, and probity expectations.

• Gap analysis and improvement roadmap

• Integration of sustainable and social procurement objectives

• Updated thresholds, delegations, and approval pathways

2. Probity and Governance Support

Independent probity advice that helps protect decision-makers without slowing the process.

• Probity advice for high-risk or complex procurements

• Conflict-of-interest management

• Documentation and audit trail review

• Governance advice for councillor and CEO roles

3. Procurement Process Design and Evaluation Support

We help design compliant, defensible procurement processes from planning to award.

• Drafting and review of RFQs, RFTs and evaluation criteria

• Oversight of evaluation and recommendation processes

• Advice on negotiation, tender clarifications, and debriefing

4. Contract Governance and Lifecycle Management

We ensure that post-award performance is properly governed and documented.

• Contract template and KPI development

• Advice on variations, extensions, and renewals

• Compliance audits and corrective action plans

5. Training and Capability Building

Tailored workshops for procurement, governance and leadership teams.

• Procurement and probity training

• Councillor briefings on governance and legal boundaries

• Lessons learned and continuous improvement programs

6. Independent Procurement Audits

Objective, external review of your procurement activity to identify systemic risks and demonstrate transparency.

• Annual or targeted audits

• Review of exemption and variation trends

• Practical recommendations for improvement

Welcome to the sixth and final article in our series on council-owned corporations. In this article, we discuss the legislation and regulations that all council-owned corporations should consider.

Operating in both the public and corporate spheres, council-owned corporations occupy a unique position in Australia’s regulatory environment. They are expected to perform commercially, generate public value, and uphold the high standards of transparency, accountability, and integrity that underpin local government. Navigating this dual framework requires a clear understanding of the intersecting legal obligations under the Corporations Act 2001 (Cth), the Local Government Act 2009 (Qld), and other state-based legislation.

An effective council-owned corporation must not only comply with these requirements but also embed them into its governance framework and culture. This means developing practical compliance tools, clear policies, and transparent reporting mechanisms that demonstrate both commercial discipline and public accountability.

Understanding the Legislative Framework

At the core of the regulatory landscape the two key pieces of legislation are the Corporations Act 2001 (Cth) (Corporations Act) and the applicable local government legislation (such as the Local Government Act 2009 (Qld)).

The Corporations Act sets out directors’ duties, financial reporting obligations, and corporate governance standards applicable to all Australian companies, including council-owned corporations.

Local government legislation establishes the principles of transparency, accountability, and effective governance that guide all local government entities.

A council-owned corporation must operate in compliance with both, meaning directors and officers need to understand their dual obligations, as company officers under the Corporations Act and as stewards of public resources under the local government framework.

Reporting and Disclosure Obligations

Transparency is central to a council-owned corporation’s accountability. Under the Corporations Act , council-owned corporations must prepare audited financial statements and meet statutory reporting requirements. At the state level, local government legislation defines additional disclosure obligations. Other states have similar mechanisms, such as corporate plans, annual reports, or strategic plans, which serve the dual purpose of providing accountability to the council and the community while clarifying operational priorities.

Publishing key performance indicators, compliance updates, and sustainability outcomes further reinforces transparency and builds community confidence. This approach is consistent across Australia, reflecting the growing expectation that public entities operate openly while delivering efficient and commercially viable outcomes.

Audit and Risk Committees

Audit and risk committees are an essential feature of good governance. They support the company’s board in overseeing financial reporting, risk management systems, and internal and external audits.

Queensland legislation, via the Auditor-General Act 2009 (Qld), outlines specific expectations for audit processes, but the broader principles such as independence, competence, and clear reporting lines, apply across all Australian jurisdictions. Committees monitor compliance, internal controls, and risk management, ensuring that both statutory and operational risks are appropriately managed.

Conclusion

Operating a council-owned corporation within Australia’s complex regulatory environment requires strategic alignment between corporate governance, public accountability, and community outcomes. By understanding the intersection of the Corporations Act, local government legislation, and ethical governance standards, councils can establish entities that are both commercially effective and publicly trusted.

Queensland’s framework provides a useful example of how clarity in governance, structured reporting, and robust risk oversight can set a strong foundation for success. However, the same principles apply Australia wide under the applicable local government legislation.

If your council or council-owned corporation is seeking guidance on establishing or refining a compliance and governance framework, our team can assist with practical tools, documentation, and strategies to ensure your operations remain compliant, transparent, and effective.

Local governments across Western Australia are under increasing pressure to deliver greater value, efficiency, and accountability in their procurement. Traditional input-based contracts — where councils pay for time, materials, or specified outputs — often fail to incentivise performance or innovation.

Outcome-Based Contracting (OBC) offers a smarter way forward: paying for measurable results, not just activity.

From “Scope and Hope” to “Deliver and Demonstrate”

In many council projects — particularly in infrastructure, maintenance, and community services — the traditional model focuses on tightly defined scopes. Contractors deliver what’s written, but not necessarily what’s needed.

This can result in “scope and hope” contracting — councils define deliverables upfront, then hope they achieve the desired community outcomes.

Outcome-based contracts instead focus on what success looks like — and link payment to performance against those outcomes.

For example, rather than paying for the number of trees planted, payment might be tied to the survival rate and canopy coverage after 12 months.

The Benefits of Outcome-Based Contracting

1. Performance and accountability: Payments are made only when agreed results are achieved.
2. Innovation and flexibility: Contractors are empowered to determine the best method to achieve outcomes.
3. Value for money: Focus shifts from lowest cost to best long-term value.
4. Transparency: Performance metrics create clearer audit trails and community reporting.

How Councils Can Apply OBC Safely

While attractive in theory, OBC must be carefully structured to manage risk and maintain compliance with the Local Government Act 1995 (WA) and associated regulations. Councils can safely adopt outcome-based models by following several key steps:

1. Define outcomes clearly: Frame outcomes in measurable, evidence-based terms (e.g. reduced maintenance incidents, improved user satisfaction, energy savings).
2. Use balanced performance measures: Combine quantitative (e.g. uptime, costs saved) and qualitative (e.g. community satisfaction) indicators.
3. Allocate risk appropriately: The supplier should control only the risks they can influence — avoid pushing external risks (like weather or policy change) onto them.
4. Integrate with probity and governance: Engage legal and probity advisers early to ensure fairness, transparency, and compliance.
5. Pilot and scale: Test OBC on smaller projects (e.g. cleaning, maintenance, or landscaping) before scaling up.

Avoiding Legal Exposure and Administrative Burden

Councils often worry that outcome-based contracts will increase administrative overhead or create legal disputes over interpretation of results. In practice, these risks are mitigated through sound contract design, including:

• Clear performance frameworks with objective data sources
• Agreed baselines and targets
• Tiered payment mechanisms (e.g. partial payments for partial achievement)
• Early dispute resolution processes
• Use of contract management software to monitor outcomes

The Future of Procurement — Paying for Impact

Outcome-based contracting reflects a broader shift in public procurement — from compliance to value creation.

As Western Australian councils pursue strategic procurement under the State’s reform agenda, OBC provides a framework to ensure every dollar spent delivers measurable community benefit.

By moving from scope and hope to deliver and demonstrate, councils can unlock better performance from suppliers, drive innovation, and achieve outcomes that truly matter to their communities.

How Muscat Tanzer Can Help Councils Implement Outcome-Based Contracting

Muscat Tanzer assists local governments to design and implement outcome-based procurement and contracting frameworks that deliver measurable community value while maintaining full probity and compliance with the Local Government Act 1995 (WA) and associated regulations.

We provide end-to-end support to help councils transition from traditional input-based procurement to modern, performance-driven models.

Our Services Include:

• Contract Design & Drafting – Develop outcome-based contract templates and performance frameworks linking payment to measurable results.
• Governance & Compliance – Ensure compliance with procurement and tendering requirements while allowing flexibility for innovation.
• Risk Allocation & Legal Safeguards – Structure balanced risk-sharing and clear performance measures to reduce disputes.
• Market Engagement & Probity Advice – Support early supplier engagement, evaluation criteria design, and probity oversight.
• Pilot Project Support – Assist councils to trial outcome-based contracting in selected services (e.g. maintenance, waste, community programs) before wider rollout.
• Training & Capability Building – Deliver tailored workshops for procurement teams and managers on outcome-based contract management and monitoring.

The Result

A robust, legally sound approach to procurement that:

• Drives better performance and innovation from suppliers,
• Improves accountability and transparency, and
• Ensures every dollar spent delivers measurable community outcomes.

Introduction

Welcome to the fifth article in our series on council-owned corporations. This article explores how council-owned corporations can drive sustainable economic development and support long-term community outcomes.

Council-owned corporations are increasingly being leveraged as strategic tools to drive economic development. By operating through a corporate structure rather than traditional council mechanisms, councils can pursue infrastructure and development projects more efficiently, attract private capital, and balance public accountability with commercial sensitivity.

Reducing Red Tape

One of the most significant advantages of using a council-owned corporation is the ability to operate with less bureaucracy than a council.

Council processes are often constrained by extensive regulatory and internal approval frameworks, which can slow down project delivery and limit flexibility. For example, engaging contractors for a development project would typically require:

• preparation of detailed tender documentation that complies with council procurement policies and procedures;
• public advertising of the tender;
• formal evaluation panels to assess submissions against pre-determined criteria;
• internal reporting and approvals, often involving multiple departments (procurement, legal, finance, governance, business units etc.); and
• Council resolution or approval at executive and/or committee level before awarding the contract.

In contrast, council-owned corporations can make decisions more quickly within delegated authority limits without requiring council resolutions for routine matters. This allows council-owned corporations to streamline the procurement and contracting processes and respond flexibly and with agility to market and commercial opportunities, such as negotiating land transactions, entering joint ventures, or engaging contractors.

This reduced red tape allows council-owned corporations to act with a degree of commercial independence while remaining accountable to the council as the shareholder. This increased efficiency enables them to seize emerging opportunities promptly, without the delays that often accompany traditional council approval processes.

Effectively Leveraging Corporate Vehicles for Infrastructure and Development

By operating through a corporation, councils can structure and deliver projects in a commercially disciplined way, allowing them to access specialist expertise, manage complex funding, assets and project arrangements, and pursue projects that might otherwise not be possible the same way for the council directly.

Whilst there is a more comprehensive policy framework that we would recommend for a council-owned corporation, to effectively leverage corporate vehicles for infrastructure and development, we would recommend putting in place dedicated frameworks for governance and accountability, such as:

• Board Charter
• Corporate Governance Framework
• Delegations of Authority
• Procurement and Contracting Policy
• Treasury & Investment Policy
• Risk Management Policy
• Financial Management & Reporting Policy

These frameworks help ensure projects are financially sound, risks are identified and managed, and reporting standards are met. Using Australian standards such as AS ISO 31000 for risk management and tailoring the policy for your company’s objectives and risk appetite can further strengthen decision-making processes.

Council-owned corporations can focus on multi-year projects, managing assets and debt over their lifecycle to maximise value for both the council and the community. For example, a council-owned corporation could manage the development of a transport hub or mixed-use precinct, coordinating funding, design, construction, and leasing activities under a corporate governance framework while keeping the council informed of progress and risks.

Attracting Private Capital and Co-Investment

One of the key strategic advantages of council-owned corporations is their ability to leverage private investment to co-fund projects. Traditional council structures may face constraints in attracting private sector participation due to procurement rules, political considerations, or administrative processes. In contrast, council-owned corporations can operate more commercially to:

• form public-private partnerships for infrastructure and urban development projects
• attract co-investment in commercial developments with shared risk and returns
• access financing and corporate credit facilities that may be unavailable to councils directly

These arrangements can increase the scale and scope of economic development initiatives while sharing part of the financial and operational risks with the private sector. For example, a council-owned corporation might partner with a private developer to build a commercial precinct, where the corporation contributes land and planning approvals while the private partner provides construction financing and expertise. Clear governance frameworks ensure the partnership is structured fairly and delivers value to the community.

Driving Sustainable Economic Development

When structured and managed effectively, council-owned corporations can be powerful drivers of sustainable economic growth. They enable councils to deliver projects efficiently, support local employment and attract private investment, while maintaining transparency to the community.

By combining commercial agility with robust governance, council-owned corporations can pursue development initiatives that may be difficult within traditional council frameworks. Their flexibility allows innovation, responsiveness to market demand, and alignment with broader community and environmental goals.

Council-owned corporations are also well placed to embed sustainability into procurement and project delivery, ensuring economic growth is environmentally and socially responsible. As explored in our Sustainability in Procurement Article Series, integrating sustainability considerations such as circular economy principles, life-cycle costing, and supplier engagement can help councils and their related entities achieve smarter, more resilient outcomes. In this way, council-owned corporations contribute to both immediate economic recovery and long-term sustainable prosperity.

Conclusion

Council-owned corporations provide councils with a flexible and commercially capable tool for economic development. By operating within robust governance, financial and compliance frameworks, councils can use these entities to deliver infrastructure, attract private investment, and stimulate economic growth while still maintaining transparency and accountability.

Suggested policies such as Board Charters, Corporate Governance Frameworks, Financial Management & Reporting, Risk Management, Procurement & Contracting, and Transparency Policies help councils manage risk, uphold public trust and achieve long-term value for the community.

When thoughtfully structured and supported by appropriate policies, council-owned corporations combine the agility of a commercial enterprise with the accountability of public service, making them powerful vehicles for sustainable and impactful economic development.

Councils seeking to accelerate sustainable development should consider how a council-owned corporation model can unlock new opportunities while delivering lasting community and environmental benefits.

If you would like to discuss the establishment of a council-owned corporation for property development and/or investment purposes or need assistance with the development of a governance and policy framework, please reach out to our authors.

Moving From Tendering to Early Market Engagement & Procurement Pipeline Strategy

In this article we consider why innovative suppliers are lost when councils go to market too late – and how WA councils can safely do strategic, pre-tender engagement.

For many Western Australian councils, procurement still begins when a specification is finalised and an invitation to tender is released. By that point, the most innovative suppliers – those with creative solutions, new technologies, or unique delivery models – have already moved on to other opportunities. The result is predictable: tenders that attract conventional bids, limited differentiation, and a “lowest-price wins” outcome. Not because the market lacked innovation – but because the process started too late to invite it.

The Missed Opportunity: Procurement as a Market-Shaping Tool

Strategic procurement reframes the question. Instead of “How do we run a compliant tender?”, leading councils ask:
“How can we use procurement to shape the market, build capability, and achieve better community outcomes?”

Early market engagement and procurement pipeline planning are the key. They allow councils to inform, test and shape the market before locking in scope and price expectations. This doesn’t breach probity – when done properly, it actually strengthens it.

Why Councils Lose Innovation When They Go to Market Too Late

1.  The scope is already frozen – once specifications are finalised, suppliers can’t offer alternative approaches or technologies.
2. Innovators need lead time – emerging or regional suppliers may need months to prepare capacity or partnerships.
3. Procurement becomes transactional – the focus shifts to compliance and risk avoidance.
4. The best suppliers disengage – they prioritise clients who engage early and show strategic intent.

How Councils Can Safely Engage Early — Within the WA Legal Framework

Under the Local Government Act 1995 and Local Government (Functions and General) Regulations 1996, nothing prevents councils from engaging the market early – provided it’s done transparently, fairly and without preferential treatment.

• Publish a forward procurement pipeline – share indicative project pipelines to give industry visibility and confidence.
• Hold pre-tender briefings or supplier information sessions – explore technologies and delivery models without commitment.
• Use Request for Information (RFI) or market sounding – gather intelligence to inform procurement design.
• Document and manage probity – keep consistent records and messaging.
• Align internal governance – ensure early engagement is part of strategic planning, not an afterthought.

The Strategic Payoff

Councils that plan and engage early gain tangible advantages:

1. Better competition and innovation – more suppliers can participate.
2. Better value – informed scoping reduces risk premiums and pricing uncertainty.
3. Better governance – decisions are evidence-based.
4. Better community outcomes – solutions are aligned to real needs.

The Bottom Line

The most innovative suppliers aren’t waiting at the end of the process – they’re shaping opportunities at the start. Councils that move from reactive tendering to proactive, transparent engagement will attract innovation and strengthen compliance, reputation and public value.

In Western Australia, the legislative framework already allows this – councils simply need to use it strategically.

How Muscat Tanzer Can Help

At Muscat Tanzer, we help councils move beyond reactive tendering to implement proactive, strategic procurement approaches. Our team advises on legally sound early market engagement, the development of forward-looking procurement pipelines, and governance frameworks that drive value for money, transparency, and community outcomes – while ensuring compliance with the Local Government Act and regulations.

Introduction

For public and private sector organisations alike, procurement decisions directly impact financial performance, service delivery and reputation. Achieving value for money (VfM) goes beyond selecting the lowest-cost supplier – it requires balancing cost, quality, risk, sustainability and broader organisational objectives. This article considers the principles and practical steps to achieving value for money when procuring goods and services.

What Does Value for Money Mean?

Value for money is commonly defined as obtaining the best possible outcome from available resources. It requires a holistic assessment of both financial and non-financial benefits of a procurement and considers:

• Price and cost-effectiveness: The upfront and lifecycle costs of goods and services.
• Quality and performance: The ability of a supplier to meet or exceed the required specifications.
• Risk management: The likelihood of delays, defects or supply chain failures.
• Sustainability and social outcomes: Environmental impacts, ethical sourcing and local community benefits.

Key Principles in Achieving VfM

Clearly Define Needs

Precise specifications prevent over-purchasing and ensure suppliers understand expectations. Early market research helps identify innovative solutions that may better serve organisational needs.

Consider Whole-of-Life Costs

The cheapest option at the point of purchase may be more expensive in the long term due to maintenance, energy consumption or disposal costs. A total cost of ownership analysis provides a more accurate comparison.

Encourage Competition

Transparent tendering and open market engagement create opportunities for diverse suppliers. A competitive process helps secure more favourable terms and pricing.

Assess Non-Financial Factors

Supplier capability, reliability and track record can significantly influence value. Incorporating environmental, social and governance (ESG) considerations ensures procurement aligns with broader organisational policies and values.

Apply Proportionate Risk Management

Risk assessments should be proportionate to the size and complexity of the procurement. Contract structures (e.g. performance guarantees) can mitigate potential issues.

Engage Stakeholders and End Users

Procurement decisions should involve consultation with those who will ultimately use or benefit from the goods or services.

Monitor and Review Contracts

VfM does not end at contract award – ongoing performance monitoring is essential. Regular reviews ensure suppliers remain accountable and adaptive to changing needs.

Practical Strategies for Organisations

• Implement procurement policies and procedures that require justification for selection beyond price alone.
• Use evaluation criteria that weight quality, risk and sustainability alongside cost.
• Ensure transparency.
• Build long-term supplier relationships to encourage collaboration and innovation.

Evaluation Criteria

Evaluation criteria provide a structured framework for assessing supplier proposals. They should balance cost, quality, risk, sustainability and organisational objectives. Weightings can be adjusted depending on the nature, complexity, size and strategic importance of the procurement. For example, a high-value ICT procurement might allocate more weight to technical capability and risk, while a facilities services contract may focus more on whole-of-life cost and service delivery.

Evaluation criteria might include:

• Price and Whole-of-Life Cost
• Technical Capability and Quality
• Supplier Experience and Capacity
• Risk Management
• Sustainability and ESG Outcomes
• Contract Management and Service Delivery Approach
• Innovation and Value-Add

Conclusion

Achieving value for money in procurement requires balancing price with broader outcomes, including quality, sustainability and risk management. By adopting structured procurement processes and applying a whole-of-life perspective, organisations can secure not just the cheapest option, but the most beneficial and sustainable outcome for the resources invested.

Our Services

Muscat Tanzer helps organisations achieve VfM in their procurement activities by combining legal and governance expertise. Our services support transparent, efficient and sustainable procurement outcomes that deliver more than just the lowest price, and include:

• Procurement Strategy and Policy Development
  • Designing procurement frameworks that balance price, quality, risk and sustainability.
  • Drafting or reviewing procurement policies and procedures to ensure compliance with legislative requirements and support the achievement of VfM outcomes.
  • Advising on whole-of-life and VfM assessment frameworks.
• Tender Preparation and Evaluation Support
  • Preparing procurement documentation (RFTs, RFQs, EOIs) that clearly define evaluation criteria.
  • Advising on probity, fairness and transparency in tendering.
  • Assisting with evaluation processes, including developing scoring matrices and documenting decisions.
• Contract Drafting and Negotiation
  • Drafting tailored contracts (goods, services, ICT, construction, facilities management, etc.) with appropriate risk allocation.
  • Negotiating with suppliers to secure favourable terms without compromising VfM.
  • Embedding performance measures that ensure accountability.
• Risk and Compliance Management
  • Identifying procurement risks, from supply chain vulnerabilities to ESG obligations.
  • Advising on governance frameworks that support ethical and sustainable procurement.
  • Ensuring compliance with local government, state, or Commonwealth procurement rules (as relevant).
• Supplier Relationship and Contract Management
  • Helping organisations set up monitoring frameworks to track supplier performance.
  • Providing tools for effective contract management, reporting and continuous improvement.
  • Advising on dispute resolution and contract variations while maintaining VfM.
• Training and Capacity Building
  • Delivering workshops for procurement teams on best practice procurement and VfM assessment.
  • Equipping staff with practical tools such as evaluation templates, checklists and negotiation guides.
• Sustainability and ESG Integration
  • Advising on how to incorporate social procurement, Indigenous engagement and environmental sustainability into evaluation criteria.
  • Supporting organisations to meet ESG reporting requirements through procurement.

Our Value

By engaging us, organisations gain:

• Transparency in procurement processes.
• Efficiency through streamlined documentation and evaluation.
• Risk mitigation via robust contracts and governance.
• Sustainability by embedding ESG and community benefit into procurement.
• Confidence that every procurement delivers not just the lowest cost, but the best overall value.