Nov 3 / Joanne Toon

New Zealand Government Procurement Rules changes - Principle 2

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.

In this series of articles, I want to highlight some of the more significant changes for suppliers, and outline any actions which you should be doing to get ready.

In this article, I’m highlighting not a rule change, but a new Principle. For those who aren’t aware, the Principles are a set of six values which underpin all procurement, whether or not the rules apply. The new Principle has been brought in at number 2.

Why this change?

For busy government agencies, running multiple procurement processes in parallel, it can be very easy to fall into a templated approach, following the same processes and asking for the same information, whether the end contract is high risk / high value or low risk / low value. After all, it reduces time and effort to just change a few pertinent details and get the next RFP / RFT out in the market.

However, this doesn’t make it easy for bidders, particularly those smaller ones who don’t have a dedicated bid team (In fact, having been part of a dedicated bid team in the UK, a ‘one size fits all’ approach didn’t make it easy for us, either!)

If the process is too detailed for a low value / low risk contract, it puts an unfair cost burden on an organisation, and makes it more likely they will choose not to bid. It also makes it more expensive for an agency to run and evaluate!

If the process is too light for a high value / high risk contract, the agency could be putting the end outcomes in jeopardy. Unforeseen risks could creep in, causing additional cost and effort for both the agency and the supplier.

While “Make it easy for all suppliers (small and large) to do business with government” was previously part of Be Fair to All Suppliers, the new Principle has pulled this part out and expanded it, setting more detailed expectations on how “making it easy” should be applied.



What does this mean for me?

It will be interesting to see how agencies interpret this principle, both in updates to their policies and procedures, and then how it gets applied in their processes.

I hope to see more streamlined approaches for low value / low risk procurement processes, including greater use of alternatives to an ‘essay style’ response. Where appropriate, particularly for ‘people based’ contracts, I would hope we’d see more focus on presentations and meeting the people who will be engaged in the work, compared to requesting “War and Peace” up front.

I also hope to see more up front market engagement and research, so agencies can have a better idea of how many suppliers could have an interest in bidding (rather than the very common approach of "we’ll see how many suppliers there are when we see who responds…”). This would lead to a better use of the Expression of Interest approach to short list, rather than expecting all suppliers in a crowded market to complete a large scale RFP/RFT.



What do I need to do now?

From a supplier perspective, there’s not much preparation which can be done up front. However, as agencies publish their procurement policies, it will be worth taking a look for any information on how they intend to put this principle into practice. 

Additional commentary

While I appreciate the change of the wording from
  • Make it easy for all suppliers (small and large) to do business with government
to
  • Make it easy to do business with government
allows for agencies to consider their own needs as well as those of suppliers, I am disappointed that the emphasis has been removed from explicitly making it easy for small suppliers to do business with government.

Particularly when considering the changes to including a weighted evaluation of economic value and the requirement to contract with New Zealand businesses for below threshold contracts make no explicit mention of consideration for smaller organisations, there is a risk the changes make it more likely agencies will award more contracts to larger businesses, rather than supporting smaller ones.

I therefore want to push agencies to include explicit consideration of supporting smaller businesses in their policies and procedures, rather than leaving it to chance.

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