Mandatory Coverage of These Rules
7. These Rules must be applied by government departments, as listed in the Schedule to the State Sector Act 1988, plus New Zealand Police and New Zealand Defence Force, to procurement:
- by any contractual means, including purchase and rental or lease, with or without an option to buy, build-operate-transfer contracts, public works concessions contracts, and contracts accessed via third party commercial supply brokerage arrangements.
- with contract values at or above the following thresholds:
- Goods and services: NZ$100,0002
- Construction services:3NZ$10 million, except that a NZ$100,000 threshold applies for the purposes of paragraph 48 (GETS post-award notice) and paragraph 51 (Annual Procurement Plans).
8. Notwithstanding the higher threshold for mandatory application of these Rules to construction services procurement, departments are reminded that the Government expects them to conduct all their construction services procurement within the policy and good practice framework as stated in paragraph 4 above.
9. Mandatory coverage of these Rules is further defined and limited by the Exclusions and Exceptions listed in Appendix 1.
10. Notwithstanding the fact that only the entities referred to in paragraph 7 above are required to apply these Rules, the Government encourages their application in the wider public sector as appropriate.
Valuation of Contracts
11. In determining whether contract values are at or above the thresholds, departments must base the contract valuation on the maximum total estimated value of the procurement over its entire duration, including optional purchases, premiums, fees, commissions, interest and revenue streams or other forms of remuneration provided for in the contract. All forms of remuneration, including payments to an agent or supply broker, must be declared in the contract.
Non-Avoidance
12. Departments must not prepare, design or otherwise structure or divide at any stage any procurement in order to avoid the application of these Rules.
Procurement Managed by a Third Party
13. Use of a third party as an agent or consultant (not being the prime contractor) to advise on, arrange or manage a procurement process does not remove from departments the requirement to comply with these Rules, where applicable.
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