Government Procurement Policy
The Government expects its departments, and encourages other public sector agencies, to be guided in their procurement by the following principles:
- best value for money over whole of life;
- open and effective competition;
- full and fair opportunity for domestic suppliers;
- improving business capabilities, including e-commerce capability;
- recognition of New Zealand's international trade obligations and interests; and
- requiring sustainably produced goods and services whenever possible, having regard to economic, environmental and social impacts over their life cycle.
The Government has also endorsed the 1999 APEC Non-Binding Principles on Government Procurement i.e. transparency, value for money, open and effective competition, fair dealing, accountability and due process, and non-discrimination. New Zealand's regime also meets the 2004 APEC Transparency Standards on Goverment Procurement.
The procurement policy approach supports the Government's economic transformation objectives, through enhanced identification of competitive opportunities for domestic enterprises and their capabilities to exploit those opportunities. It does not, however, impose on purchasing agencies a requirement to use their purchasing as a direct lever for industry or regional development, e.g. through domestic price preference or mandatory "offsets" (requirements on government buyers to obtain commitments from overseas buyers to assist domestic industry).3
As assurance that purchasers are affording full and fair opportunity to domestic suppliers, the Government now requires departments to include in their internal documentation basic, with senior management sign-off, reasons justifying the rejection of any New Zealand tender for contracts at or above $100,000.4
To ensure the transparency of its procurement market for domestic and international suppliers, the Government also requires departments to use the Government Electronic Tenders Service (GETS) for publication of all open approaches to the market, including invitations to tender for contracts at or above $100,000. Departments must also post on GETS brief award notices for all contracts at or above $100,000. Annual procurement plans must also be published on GETS. (See Mandatory Rules for Provcurement by Departments for details).
New Zealand also has a broader international interest in transparent and open government procurement markets for its exporters. New Zealand participates in continuing APEC work towards improved transparency and liberalisation of government procurement markets in the Asia-Pacific region. In the World Trade Organisation (WTO), New Zealand took part in earlier discussions to lay the groundwork for negotiation of a new multilateral agreement on transparency in government procurement. These discussions are not currently active, but officials are reviewing the case for New Zealand to join the existing WTO Government Procurement Agreement (see also Appendix 3).
New Zealand's own government procurement market is open and competitive, and the policy does not call for discrimination against foreign suppliers. This global non-discriminatory procurement policy approach is reinforced by mutual commitments to equal access and treatment for suppliers of free trade agreement partner countries. Details of these commitments are given in Appendix 3. The procurement policy does, however, also call for government purchasers to be able to show that they have not denied full, fair and reasonable opportunity to domestic suppliers to compete.
Agencies should also note that environmental issues are an increasingly important element in procurement policy, and they should ensure that their procurement is consistent with the environmental policies of the Government (see Environmental Issues). In response to recent decisions by the Government on sustainable development, officials are developing a broader "sustainable procurement" policy having regard to economic, environmental and social impacts.5
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