Federal Lindsay MP David Bradbury's office recently confirmed the Government's special exemption.

``We wanted to make sure that smaller businesses could tender for the stimulus construction work,'' a spokesman for Mr Bradbury said.

``But they still have to be accredited under state occupational health and safety laws.''

He also said this exemption did not apply to any other Federal Government projects.

Emu Plains-based occupational health and safety specialist Maralyn Kastel whose company The Detail Devils advises businesses on work regulations said many local firms feared they would not be able to win federal contracts.

``Because I work with small to medium businesses I know how hard it is to comply with the guidelines, even at state level,'' Ms Kastel said.

``The onerous requirements of federal regulations make it almost impossible to get federal accreditation.''

She said all companies had to comply by 2012, when the Federal Government planned to harmonise occupational health and safety laws across Australia.

Penrith Valley Economic Development Corporation's CEO Bijai Kumer said something was being done, at least in Penrith.

He said the corporation was holding a free seminar on federal occupational health and safety next Wednesday at Penrith's JK Williams Centre.

``If our businesses can get accredited, they could tender for any project within Australia,'' Mr Kumer said.

``We must educate our businesses so they'll be aware of all the regulations.''