The Government believes contractors now have an easier shot at winning government contracts as a result of changes to government procurement rules which take effect on December 1, 2025, mandatory for central government but only optional for councils.
Economic Growth Minister Nicola Willis says her Government reviewed 900 submissions during consultation on the new rules earlier this year. “We heard loud and clear that the paperwork, time and complexity were making it hard for small to medium-sized businesses to apply for government contracts.” Government contracts are collectively worth more than $50 billion a year, she says, adding that in addition to the new economic benefit test, the number of rules has been slashed from 71 to 47 for all goods, services, and refurbishment contracts worth more than $100,000 and all construction contracts over $9 million.
The new economic benefit test means that when government agencies decide who to buy from, they must assess the wider benefit to the country as well as price and quality. The new rule that says at least 10 per cent of the decision must be based on how much a business’ proposal benefits our broader economy.
Changes are in the fifth edition of the Government Procurement Rules, available on the government’s Procurement website, with procurement opportunities advertised on the Government Electronic Tenders Service (GETS) website.
New Zealand’s civil construction industry has welcomed the changes that simplify government procurement and clearly set out what’s required from suppliers.
CCNZ Chief Executive Alan Pollard says the association has regularly engaged with MBIE on the review of the procurement rules – through workshops, proactive contact around issues and a submission in response to consultation.
“Procurement has long been unclear and inconsistent for contractors tendering on government work, so it’s good to see positive steps taken that streamline procurement and provide a better focus on benefit for businesses and communities.”
However, Pollard adds that there is still work to do. “It’s great to have clearer and more efficient rules. But there’s still work to do in making sure that the procurement process adds value and is a good use of time for those looking to tender on government contracts.
“It is one thing having clear rules, but we need to make sure that they are applied consistently across central and local government entities and in a manner that is commercially reasonable and sound.”
Significant further benefit can be achieved through early supplier engagement, he says, and increased forward works briefings by client organisations so that suppliers can be prepared and better understand client expectations when tenders came to market.
Parting words from Jeremy Sole- a final column