New Zealand Government Procurement Rules changes - Awarding to New Zealand businesses

The New Zealand Government Procurement Rules are changing. The fifth edition goes live on the 1st December. While a lot of the changes are cosmetic – making the language less bureaucratic, merging rules where they were repetitious, or moving information that was in the rules into guidance, there are a few points which suppliers need to be aware of.

One of the ongoing challenges and complaints I hear from suppliers is being “locked out” of government contracts. This was also highlighted in last year’s Auditor General’s report back to the Select Committee on his office’s audit of government procurement.

Competing for contracts is expensive, and smaller businesses find it harder to justify the time and cost of bidding for open tenders, where they may be competing against a large number of suppliers. Helping smaller businesses compete in closed processes (where they know they are only bidding against three to five others) will not only improve their chances of success, but also increase the experience of bidding for work, leading to greater confidence when competing in the open competitive market. And a knock-on bonus – hopefully improving the quality of bids in general to make the evaluation teams’ lives easer, too!

Similarly, for the ‘below three quotes’ value threshold, working directly with local businesses rather than automatically going to a larger multinational will help increase the general capability and capacity of New Zealand businesses to work with government.

By setting the expectation that New Zealand businesses will get priority consideration when awarding low value contracts, we should see a greater number of contracts going to local organisations. The direct impact is not only supporting those businesses, but ensures money stays on-shore with taxes paid in New Zealand and local people being employed.

In previous versions of the rules, the wording specifically directed agencies to respond to suppliers’ questions about a procurement. This updated version simply states that agencies must respond to queries from suppliers. I interpret this to mean agencies must be responsive to questions and communications from suppliers, even if they aren’t involved in an active procurement process.

I will be expecting to see agencies providing options for suppliers to proactively contact them, including a monitored email address advertised alongside their published procurement policy (more about this updated rule in a future article!).

If you are a smaller NZ business, looking to get your foot in the ‘government’ door, then do your research. Investigate the agencies you would like to supply to – check out their websites and understand their core business. Make sure that what you are offering is something they’d be interested in buying.

Get in touch with the agency to let them know you exist. There should be a centralised email address (such as "procurement@..."). Make sure your email is clear about who you are, what you sell and how you can help support the agency. If valid, include that you are a NZ business! Warning - don't make your email overly wordy or stuffed full of sales-speak and brochures - you want the agency to quickly and easily understand what you do, and why you should be invited to bid for relevant work.

Check out whether the services you offer are already covered by an All of Government contract. Sadly, if you aren’t already on the panels, you do need to wait until they are readvertised before you can apply. If you are already on an AoG panel, then make sure you include that information in your communication with the agencies.

While I appreciate a significant proportion of low value contracts go through the All of Government panels, which dictate which organisations agencies can approach for certain services / goods, there are still plenty of options for engaging with smaller organisations. I’d like to throw down a challenge to all agencies (whether or not they are mandated by the rules) to include at least one new-to-them organisation for every below threshold or closed AoG process. They can’t take part in a process if they don’t know about it, and they can’t win bids if they aren’t given a chance.