The New Zealand Government has updated its procurement framework with the 5th edition of the Government Procurement Rules, which comes into effect on December 1st 2025. These rules guide how government agencies spend tens of billions of dollars annually on goods, services and works, ensuring responsible expenditure of public funds while delivering maximum value to New Zealanders.
Overview of the Rules
At their core, the Government Procurement Rules are built on six fundamental principles:
- Plan and manage for great results
- Be proportionate and right-size the procurement
- Be fair to all suppliers
- Get the right supplier
- Get the best deal for everyone
- Play by the rules
These principles are complemented by the Government Procurement Charter, which sets out expectations for how agencies should conduct procurement to achieve public value. Together, they form a comprehensive framework that promotes responsible spending while supporting transparency, integrity, and accountability throughout the procurement lifecycle.
Scope and Application
The rules apply to all Public Service departments, New Zealand Police, New Zealand Defence Force, Crown agents, and various Crown entities when procuring goods, services or works. They cover the entire procurement lifecycle – from identifying needs and planning, through market engagement and supplier selection, to contract management and eventual disposal of assets.
One of the most significant aspects of the updated rules is Rule 8, which places a strong emphasis on delivering economic benefits to New Zealand through government procurement.
The rules require agencies to openly advertise procurement opportunities on the Government Electronic Tenders Service (GETS) when the value meets or exceeds $100,000 for goods, services or refurbishment works. This ensures fair competition and gives all capable suppliers the opportunity to compete for government contracts.
Key Updates in the 5th Edition
This latest edition focuses on three strategic priorities: economic growth, enhanced transparency and strengthened accountability. The updates enable a more cohesive procurement system while responding to feedback from key stakeholders.
Notable changes include stronger requirements around reporting for better transparency of government spending, tightened rules around panel contracts to ensure fair supplier engagement and a significant emphasis on economic benefits to New Zealand through procurement activities.
The Procurement Lifecycle
The rules address every stage of procurement: planning (including business cases, risk assessment, and market analysis), approaching the market (open advertising requirements, tender processes, evaluation criteria), awarding contracts (fair treatment of responses, contract award notices, supplier debriefs), and contract management (performance monitoring, payment terms, relationship management).
Agencies must maintain detailed records of procurement decisions, apply appropriate due diligence based on the value and risk of each procurement, and ensure all staff involved in procurement understand their obligations under the rules. The framework also includes provisions for emergency procurement, panel contracts, syndicated contracts, and All-of-Government contracts that enable agencies to leverage collective purchasing power.
Balancing Local Benefits with International Obligations
A critical aspect of the rules is how they balance New Zealand's international trade obligations with support for the local economy. While the rules incorporate New Zealand's commitments under various Free Trade Agreements and align with the World Trade Organisation Agreement on Government Procurement – which require non-discrimination against suppliers based on country of origin – they also explicitly enable agencies to consider and value economic benefits to New Zealand as part of their procurement decisions.
This balance ensures that New Zealand maintains its reputation as a fair and transparent trading partner while also ensuring that government spending creates opportunities for New Zealand businesses and delivers broader benefits to local communities.
The Game-Changer: Rule 8 – Economic Benefit to New Zealand
One of the most significant aspects of the updated rules is Rule 8, which places a strong emphasis on delivering economic benefits to New Zealand through government procurement.
What Rule 8 Requires
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Agencies must seek economic benefits to New Zealand in procurements above the value thresholds of $100,000 for goods and services, to be evaluated as part of the assessment of public value.
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Unless there is good reason not to, agencies are expected to award procurements below the value thresholds of $100,000 for goods and services to New Zealand businesses that are capable and have capacity to deliver the contract.
Key Requirements for Agencies
When conducting procurement above the thresholds, agencies must:
- Set clear expectations in their Notice of Procurement of the economic benefits they are seeking
- Include a minimum weighting of 10 percent for evaluation purposes for economic benefits
- Include contract provisions for delivering the agreed economic benefits
- Conduct sufficient monitoring to ensure that commitments made in contracts are delivered and reported on
Types of Economic Benefits
Agencies must consider opportunities to deliver economic benefit to New Zealand, such as making better use of New Zealand resources, including increasing workforce participation, providing training or apprenticeships, improving pay or conditions of New Zealand workers, using New Zealand businesses including SMEs and regional businesses, creating export opportunities, developing New Zealand industry capabilities or capacity, developing and adopting innovative products or practices, considering sustainability and environmental benefits, and contributing to positive social and cultural outcomes.
Government agencies will be expected to engage with businesses that deliver public value to New Zealand, including through increased employment, skills and training, and economic growth for local communities
Important Context
Rule 8 operates within the context of New Zealand's trade agreements, which require officials to treat all potential suppliers equitably and not discriminate based on size, location, or ownership. This means suppliers demonstrate economic benefits through information about their business operations, such as operational location, employee demographics, and subcontractor arrangements.
How Service Dynamics Fits These Criteria
As a certified New Zealand service provider, Service Dynamics is well-positioned to deliver the economic benefits that government agencies are now required to seek under Rule 8.
Our Economic Benefit Credentials
New Zealand Owned and Operated: Service Dynamics is a registered Buy NZ member, demonstrating our commitment to the New Zealand business community and our status as a genuine local service provider. This directly supports Rule 8's emphasis on using New Zealand businesses.
Local Employment and Capability: As a New Zealand-based service provider, we contribute to local workforce participation and skills development – key economic benefits that agencies must now consider in their procurement evaluations.
Regional Business Support: Our operations support the New Zealand economy by maintaining local employment, paying New Zealand taxes, and contributing to the domestic supply chain – all factors that agencies can now credit in their procurement decisions.
Capacity to Deliver: Being registered with Buy NZ demonstrates that we meet the standards expected of quality New Zealand service providers, giving agencies confidence that we have both the capability and capacity to deliver contracts effectively.
What This Means for Government Procurement
The updated rules represent a significant shift toward prioritising local economic impact alongside traditional value-for-money considerations. Government agencies will be expected to engage with businesses that deliver public value to New Zealand, including through increased employment, skills and training, and economic growth for local communities, creating greater opportunities for New Zealand's small and medium sized enterprises, including regional businesses.
For businesses like Service Dynamics that are genuinely New Zealand-based and committed to contributing to the local economy, these rules create a more level playing field and recognise the broader value that local businesses bring beyond just price.
Looking Forward
The 5th edition of the Government Procurement Rules signals a maturation of New Zealand's procurement framework – one that balances international trade obligations with a pragmatic recognition that government spending should, where possible, benefit New Zealand's economy and communities.
For government agencies, this means more strategic thinking about procurement outcomes. For New Zealand businesses, it means opportunities to demonstrate not just competitive pricing, but genuine economic value to the country.
As a Buy NZ certified service provider, Service Dynamics is ready to work with government agencies to deliver both excellent service outcomes and meaningful economic benefits to New Zealand.
To learn more about the Government Procurement Rules, visit www.procurement.govt.nz. To learn more about Service Dynamics' Buy NZ certification, visit our membership page.