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Each year, the NSW Government spends approximately $34 billion on procuring goods and services, including construction. Senior executives should be fully aware of the NSW Government procurement framework, understanding that government agencies must balance limited budgets against the increasing cost of goods and services.
Senior executives must ensure that their agency undertakes procurement activities within the agreed parameters of the agency's accreditation status. Board directions and policies must also be followed.
Information about NSW Government procurement
NSW Procurement - within the NSW Treasury provides consultancy and advisory services; category management; policy and analytical support; access to procurement-enabling technologies; and support for governance groups like the NSW Procurement Board (Board).
buy.nsw is the central source of information for NSW Government procurement.
As a senior executive, you should particularly note the following topics available on buy.nsw:
- NSW procurement laws
- Procurement Board Directions
- NSW Procurement Policy Framework
- NSW procurement policies, including the Small and Medium Enterprise (SME) and Regional Procurement Policy and the Aboriginal Procurement Policy
- Accreditation Program for Goods and Services Procurement and the Agency Accreditation Scheme for Construction.
NSW Government procurement objectives
- Value for money - this is the overarching objective in the procurement of goods, services and construction
- Fair and open competition - competition improves outcomes for NSW by broadening access to government procurement, especially for SMEs and regional businesses
- Easy to do business - NSW aims to be the easiest state to start and stay in business
- Innovation - the marketplace is a great source of innovation and can assist government to work smarter and deliver better services
- Economic development, social outcomes and sustainability - government procurement can help to support economic participation, social outcomes, develop skills and create jobs for the citizens of NSW.
Using NSW Government contracts
The Procurement Policy Framework explains the Government's current procurement policies. Agencies must also apply the SME and Regional Procurement Policy and the Aboriginal Procurement Policy when procuring goods and services.
Whole of government contracts
NSW Government whole of government contracts are arrangements made with suppliers to supply or dispose of specific goods and/or services for a specific price and a specified period (usually three to five years). Some contracts may draw from a panel of suppliers that can provide goods and services; in other cases, the contract may involve a sole supplier. Government agencies must use whole of government contracts to procure goods and services, where available, although there are exceptions in specific circumstances (see below).
View the list of contracts on buy.nsw
Whole of government prequalification schemes, also known as multi-use lists, approved lists or procurement lists, allow suppliers to prequalify for business opportunities with NSW government agencies. Agencies have the option to use prequalification schemes or find other ways to procure unless Board directions indicate otherwise (see PBD 2019-04 Approved procurement arrangements).
Prequalification scheme user guides include lists of resources that meet relevant experience and qualification standards. This makes the process of sourcing and engaging external expertise less time consuming. Pricing is not confirmed when suppliers become prequalified so agencies must still conduct value for money assessment when using prequalification schemes. Suppliers are able to register at any time, or in some cases, periodically, which allows new and emerging businesses to access government procurement opportunities.
View the list of prequalification schemes on buy.nsw.
Where no whole of government contract or mandated scheme is available, agencies can undertake their own procurement in accordance with the approved procurement methods set out in the NSW Procurement Policy Framework, the terms of the agency's accreditation and NSW Procurement Board Direction PBD 2019-04.
For more information about current procurement policy, contact the NSW Procurement Centre.
Devolved procurement model
NSW Government procurement operates within a devolved model, whereby agencies are responsible for their procurement activities. This devolved model is supported by the Agency Accreditation Program. The Board accredits agencies to undertake procurement up to certain risk and value thresholds, based upon their demonstrated procurement capability and capacity.
The devolved procurement model focuses on:
- bringing government procurement practice and contracts in line with modern practice
- building procurement capability across government
- supporting the participation of small and medium enterprises in government procurement
- introducing innovation in government procurement to stimulate a diverse and vibrant state economy
- allowing the best positioned agencies to lead and manage specialised procurement categories.
NSW Government procurement governance arrangements
NSW Procurement Board
Procurement in the NSW government sector is covered by Part 11 of the PWP Act.
The PWP Act established the Board as a statutory body tasked with:
- simplifying procurement processes and reducing administrative costs
- ensuring value for money in procurement by and for agencies
- improving competition and access to government business for the private sector, especially by SMEs and regional enterprises.
The Board members are the Secretaries of each Department listed in Part 1 of Schedule 1 in the Government Sector Employment Act 2013 or their approved delegates (generally Deputy Secretary). The PWP Act appoints the Secretary of the Treasury as the Chair, although the role has been delegated to the Deputy Secretary, Commercial, Commissioning and Procurement in the Treasury.
Attending NSW Procurement Board meetings as an agency representative
As a senior executive, you may be required to represent your agency at a meeting of the Board. The Board is responsible for:
- overseeing the procurement of goods and services by government agencies
- issuing procurement-related directions to government agencies
- developing and implementing procurement policies
- monitoring compliance by government agencies with the requirements of the PWP Act, policies and directions
- investigating and dealing with complaints about agencies' procurement activities.
Procurement Leadership Group
The Procurement Leadership Group is established under the Board as a government procurement executive group. It is responsible for identifying and resolving sector-wide issues, and advising the Board on strategic matters concerning government procurement of goods and services (including construction).
The Procurement Leadership Group comprises senior procurement personnel and financial and business experts from Departments.
Category Management Working Groups
Category Management Working Groups lead a category management approach to whole of government and category specific matters. They advise the Procurement Leadership Group and the Board on matters relevant to managing particular categories of goods and services.
Enforceable procurement provisions
Procurement Board Direction PBD 2019-05 Enforceable Procurement Provisions (EPP Direction) establishes legal requirements for NSW Government agencies arising from international procurement agreements. The EPP Direction started on 29 November 2019.
Under the PWP Act, a supplier may lodge a complaint with the head of a government agency alleging that the agency has contravened or proposes to contravene an enforceable procurement provision in the EPP Direction. The agency head must investigate and attempt to resolve this complaint in accordance with the provisions of the PWP Act.
The supplier lodging a complaint can apply to the Supreme Court for an injunction to stop the agency from contravening an enforceable procurement provision, or requiring the agency to take action to avoid or remedy a situation that contravenes an enforceable procurement provision. The supplier can also apply to the Supreme Court for an order for the agency to pay limited compensation.
Senior Executive Insights
If a whole-of-government contract exists, am I required to use it?
Yes, a government agency (within the meaning of the PWP Act) must use whole-of-government contracts when obtaining goods or services to which those contracts apply.
Whole-of-government contracts have been established to provide the best value for money. Depending on the contract terms and conditions, you may be able to negotiate with the supplier. You may also choose to obtain multiple quotes from different suppliers.
For more information, see the buy.nsw list of whole-of-government contracts.
Are there any exceptions?
There are some exceptions to government agencies’ use of whole-of-government contracts and mandated prequalification schemes, including:
- purchases under $10,0000
- purchases up to $50,000 from a small business (business with <20 full time equivalent (FTE) staff)
- purchases up to $250,000 from Aboriginal businesses
- purchases up to $1 million from SMEs when conducting innovative outcomes-based trials or proof -of-concept testing
- purchases of any value from Australian Disability Enterprises.
When procuring goods or services, how many quotes do I need to get?
Goods and services procurement (excluding construction)
Accredited agencies set their own procurement rules on the level of competition required when undertaking procurement, consistent with the terms of their accreditation.
Unaccredited agencies must comply with Procurement Board Direction 2019-04, which requires the following minimum levels of competition for procurement where no government contract or prequalification scheme exists:
Purchase from any supplier, subject to agency safety and infrastructure requirements and provided rates are reasonable and consistent with normal market rates.
|Value||$10,000 - $30,000|
Obtain at least one written quote.
|Value||$30,000 - $650,000|
Obtain at least three written quotes, or
Conduct an appropriate procurement process approved by the agency head or an accredited agency within the cluster.
Comply with the EPP Direction provisions if your agency is listed in Schedule 1 and the good are not exempt under Schedule 2, and
Conduct a procurement process endorsed by an accredited agency within the cluster (preferred) or NSW Procurement.
Agencies that are not accredited, or are partially accredited to conduct construction procurement under the Agency Accreditation Scheme for Construction, may conduct construction work valued up to $1.3 million (refer to PBD 2014-03C Threshold for unaccredited work).
For construction work valued over $1.3 million, agencies must:
- use the construction contract templates and guidelines available on buy.nsw, and/or
- get assistance from an external provider or an accredited agency as detailed in the tables below (based on project value and risk profile):
Must obtain external support and use the contract templates and guidelines on buy.nsw.
May undertake phases for which the agency is accredited without external support, and
Must use the contract templates and guidelines on buy.nsw.
Must get external support and use the contract templates and guidelines on buy.nsw.
May undertake planning phase without external support, and
Must obtain external support and use the contract templates and guidelines on buy.nsw for delivery phase.
Senior executive obligations
The NSW Cabinet system
Service delivery enablers