Hon Nicola Willis
Minister for Economic Growth

New Zealand businesses will have a better shot at winning government contracts as a result of changes to government procurement rules, Economic Growth Minister Nicola Willis says. 

“The new rules agreed to by Cabinet will take effect on 1 December.

“More than 900 submissions were received during consultation on the new rules earlier this year,” Nicola Willis says.

“Businesses shared that the lack of weighting for New Zealand’s interests in the evaluation criteria was holding them back. That’s why we’re introducing a new economic benefit to New Zealand test that will apply to every procurement to ensure we are creating value and jobs for Kiwis. 

“We want to see taxpayer money supporting Kiwi businesses to grow, hire, and thrive.

“We also 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. We’ve listened and these updated, simpler rules will make it easier for businesses to follow and apply the rules.

“Government contracts are collectively worth more than $50 billion a year. The purpose of these changes is to make it easier for New Zealand businesses to win more of these contracts, either directly, or as subcontractors in the supply chain.

“In addition to the new economic benefit test, the number of rules has been slashed  from 71 to 47, making them more accessible and easier to navigate.

“The new rules will apply to all goods, services, and refurbishment contracts worth more than $100,000 and all construction contracts over $9 million.

“Contracts below these thresholds are expected to be awarded to capable local businesses.

“The economic benefit test is intended to not only support more Kiwi businesses to compete for government work but to encourage international companies bidding for government contracts to demonstrate a commitment to creating value in New Zealand.

“These changes not only help level the playing field but help ensure that taxpayer money is spent responsibly and efficiently and maintains public trust as well as supporting local businesses. 

“New Zealand respects its international trade commitments and the settings in the Rules continue to uphold our obligations. This is important to ensure that Kiwi businesses continue to benefit from open access to large international markets.”

The 5th edition of the Government Procurement Rules is available on the New Zealand Government Procurement website. https://www.procurement.govt.nz/government-procurement-framework/government-procurement-rules

Businesses can find Government procurement opportunities advertised on the Government Electronic Tenders Service (GETS). GETS - Government Electronic Tender Service | Current tenders

Notes:

The new economic benefit test means that when government agencies decide who to buy from, they must assess the wider benefit to New Zealand 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's proposal benefits the economy. That means giving extra weight to things like:

• Using New Zealand businesses to deliver contracts
• Creating jobs  
• Offering training and development to upskill New Zealand workers

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