Earlier this month, Economic Growth Minister Nicola Willis proposed significant changes to the Government Procurement Rules (Rules), aimed at making it easier for New Zealand businesses to secure government contracts. The Rules govern public sector procurement in New Zealand and are therefore crucial for both the public sector as well as private sector suppliers. 

Key changes highlighted by the Minister include simplifying and reducing the number of Rules, and introducing an economic benefit test, replacing the current focus on “Broader Outcomes”. A change in focus to how government procurement can deliver economic benefits to New Zealand is evident in the change in title of the Rules from “Rules for sustainable and inclusive procurement” to “Responsible expenditure of public funds”.

The thresholds for when the Rules apply remain unchanged at $100,000 for procurement of goods, services and refurbishment contracts and $9 million for new construction works. 

The Ministry of Business, Innovation and Employment (MBIE) is currently seeking feedback on the proposed fifth edition of the Rules, before they are considered by Cabinet. 

Proposed updates to government rules

Key changes and updates in the consultation document include:

• New economic benefit test: Government agencies must consider the wider benefit to New Zealand when making procurement decisions – this replaces the concept of “Broader Outcomes” introduced in the fourth edition of the Rules. Specifically, agencies must require suppliers to demonstrate how they will deliver economic benefits to New Zealand. This requirement must be given a minimum weighting of 10% in the evaluation criteria. 

• Panel of suppliers: Changes are aimed at providing greater transparency on goods and services procured through panel contracts. Changes proposed include:

  • Agencies must develop a contract management plan and panel guide and discuss this with suppliers, unless there is a good reason not to.

  • Once the panel is established, agencies must identify a method for allocation of contracts and include this in the panel guide. The allocation method cannot simply indicate that all secondary procurement methods will be used.

  • Agencies must publish a contract award notice for any secondary procurement worth over $10,000.

• Minimum response time: The proposed new Rules require a minimum response time of 20 business days for all procurement processes, with no allowable deductions or different time periods for multi-step processes. Extra time must be provided if responses cannot be submitted electronically. This represents a potential increase in the minimum response time, as currently allowable deductions can reduce the various stages in a procurement process to between 8 to 15 business days.  

• Contract award notice for opt-out procurements: Where an agency has exercised an opt-out of applying the Rules, it must publish a contract award notice on GETS and specify the circumstances that justified the application of the “opt-out”. Currently, this publication requirement does not apply to an opt-out procurement.

• Procurement policies: Agencies must make their procurement policies publicly available.

• Supplier contracts: Agencies are required to include a supplier code of conduct in every contract but may refer to the New Zealand Government Procurement’s Supplier code of conduct. Prompt payment rules are similar to the new rule 51A introduced in January 2025, other than agencies must require their suppliers (as opposed to currently “should encourage suppliers”) to pay subcontractors on terms that are no less favourable than those they receive from the agencies. 

Next steps 

Submissions for feedback on the proposed Rules are due by 8 April 2025. Further information on submitting feedback can be found on the MBIE website. 

Please get in touch if you would like assistance with preparing feedback or would like to know more about the Government Procurement Rules.

This article was co-authored by Rebecca Neil, Solicitor in our Construction and Infrastructure team.