Challenges and improvements of an SME-oriented procurement policy in the construction sector: A case of victoria's local jobs first policy

The Local Jobs First (LJF) Act/Policy supports small and medium-sized (SME) manufacturers in Australia through mandatory local-content requirements in public procurement. This law was enacted when cheaper imported products displaced domestically manufactured goods, raising concerns about the sustainability of domestic manufacturing. While head contractors in the construction sector submit complying bids, they often substitute locally manufactured materials with cheaper foreign imports post-contract, hindering the full institutionalization of the policy. This paper examines the challenges of the LJF Policy and proposes improvements. To achieve this aim, two research questions are answered using the institutional work paradigm to understand actors' collective efforts at the field level: (1) What sub-forms of maintaining work are adopted by actors to institutionalize a contested SME-oriented procurement policy? (2) How can the full institutionalization of a contested SME-oriented procurement policy be achieved? A qualitative research strategy was employed to collect data from 25 semi-structured interviews and one focus group discussion. Despite the adoption of policing, enabling and embedding and routinizing work, a mandatory procurement policy could be circumvented by actors, reflecting the contested nature of a competitive issue field and a dilemma of institutionalization for actors, who seek to avoid full institutionalization costs. The Victorian Government is advised to resolve the dilemma of institutionalization by deploying more resources to implement the LJF Policy and to address skills shortages using a bottom-up strategy. It is recommended that contractors comply with the LJF policy to maintain resilient supply chains, and that trade unions and manufacturers continue to monitor compliance.