The Ministry of Business, Innovation and Employment (MBIE) is creating new procurement rules that will replace the Mandatory Rules for Procurement by Government Departments that were endorsed by Cabinet in 2006. MBIE is currently reviewing submissions on the draft new rules, which are expected to come into force next year.

To a large extent, the new rules will not change the substance of the current rules, given that the current rules reflect New Zealand's international trade commitments (such as the P4 Free Trade Agreement). For example, there are no changes to:

  • The application of the rules to various public and state sector agencies (government departments, New Zealand Police and New Zealand Defence Force must comply with the rules, state service agencies should comply with the rules and state sector agencies are encouraged to comply with the rules)
  • The minimum threshold as to when the rules apply (i.e. where the maximum estimated value of the goods and services exceeds $100,000, or $10,000,000 for construction)
  • The exemption categories
  • The types of procurement the rules do not apply to (e.g. employing staff, gifts or statutory or ministerial appointments).

However, MBIE wants to improve the way in which the rules are expressed and provide additional guidance and examples for how the rules are to be applied.

While the substance of the current rules will be carried across into the new rules, there are a number of additional topics not covered by the current rules that will be addressed in the new rules. These include the introduction of e-auctions and rules dealing with "all of government" contracts, syndicated procurement, public private partnerships (PPP) and intellectual property. Other than e-auctions (where suppliers compete against each other in an online reverse auction), the rules for these new topics have not yet been proposed, but we suspect they will reflect other public sector guidance on these topics such as the OAG's procurement guidance for public entities.