Economic Growth Minister, Hon Nicola Willis, released the updated Government Procurement Rules today. The number of rules has been reduced from 71 to 47 in an effort to make them more accessible and easier to navigate, to simplify the procurement process, and reduce application time and complexity. In addition to simplifying the rules, the changes are also aimed at making it easier for New Zealand businesses to compete for and win government contracts by introducing: 

• a new mandatory “economic benefit to New Zealand” test; and 
• an expectation that contracts below the specified thresholds will be awarded to capable local businesses. 

Key changes

A key feature of the update is the introduction of a new “economic benefit to New Zealand” test, which will apply to all procurements above the specified value thresholds (see new Rule 8). There has been no change to these thresholds. This means the updated rules will continue to apply to:

• goods, services, and refurbishment contracts valued over $100,000; and
• construction contracts valued over $9 million.

The updated rules will require that at least 10% of the procurement decision be based on the broader economic benefits a proposal offers to New Zealand. These benefits may include: 

• using New Zealand-based businesses to deliver contracts;
• creating local jobs; and
• providing training and development to upskill New Zealand workers. 

The test is expected to encourage both local and international suppliers to demonstrate how their proposals will deliver benefits to New Zealand. According to the Minister, this change is designed not only to level the playing field for New Zealand businesses, but also to ensure taxpayer money is spent responsibly and efficiently, while maintaining public trust. Importantly, the Government confirmed that the revised rules uphold New Zealand’s international trade obligations, ensuring continued access to global markets for local businesses.

The updated rules also set out a clear expectation to all agencies that unless there is good reason not to, agencies will be expected to award procurements below the specified value thresholds to New Zealand businesses that are capable and have capacity to deliver the contract.

A number of other changes have also been made to the updated rules, including:

• the operation of supplier panels and transparency of secondary procurement spend (see new Rules 22 and 23);
• focus on delivering value through effective contract management (see new Rules 34 and 35); and
• enhanced integrity, transparency and accountability requirements (see new Rules 1,2,3, 25 and 45). 

The updated rules agreed to by Cabinet will take effect on 1 December 2025.

Our view

With government procurement contracts collectively worth more than $50 billion a year the updated rules will be welcomed by local businesses, particularly small to medium sized businesses. The updated rules strike a balance between continuing to respect New Zealand’s international trade commitments and supporting local businesses. 

The changes outlined by the Minister should make it easier for New Zealand businesses to win more government contracts, either directly, or as subcontractors in the supply chain. However, the success of these changes will ultimately depend on how the rules are implemented and applied by agencies. 

Next steps

Agencies should familiarise themselves with the new rules and update procurement processes and evaluation criteria ahead of the 1 December 2025 commencement date. Suppliers should be ready to demonstrate how their proposals contribute to New Zealand’s economic development. 

The 5th edition of the Government Procurement Rules is now available on the New Zealand Government Procurement website. Procurement opportunities continue to be advertised on the Government Electronic Tenders Service (GETS) website.