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Principles, rules and the law

Government procurement is based on the five Principles, the Government Rules of Sourcing and good practice guidance. Collectively these provide a broad framework that supports accountability, sound practice and successful procurement results.


Procurement Principles

The Principles of Government Procurement were approved by Cabinet in July 2012 [Sec Min (12) 10/5]. They are the foundations for good practice at all stages of the procurement lifecycle, from initial planning through to the end of the contract / life of the goods purchased.

It is essential that all government agencies take the Principles into account when buying goods and services. The five Principles are:

  1. Plan and manage for great results
  2. Be fair to all suppliers
  3. Get the right supplier
  4. Get the best deal for everyone
  5. Play by the rules


The Government Rules of Sourcing

The Government Rules of Sourcing (the Rules) represent the government’s standards of good practice for procurement planning, approaching the market and contracting. They are mandatory for government departments, New Zealand Police, the New Zealand Defence Force, and most Crown entities. Other central and local government agencies are encouraged to apply them.


Government procurement and functional leadership

The Government established functional leadership to improve the effectiveness and reduce the overall costs to government of common business functions by establishing common standards and increasing cross government collaboration.

Functional leadership roles have been given to three chief executives to drive performance across the state services in procurement, ICT and property. The Functional Leaders are:

  • The Chief Executive of the Ministry of Business, Innovation and Employment, responsible for Government procurement reform and the Government National Property reform strategy.
  • The Chief Executive of the Department of Internal Affairs / Chief Government Information Officer, responsible for the ICT Strategy and Action plan.

Their mandate includes developing government-wide contracts for commonly needed goods and services.


Statutes related to contracting

In addition to policy and rules, anyone involved in procurement must be aware of relevant statutes that relate to contracting and buying goods and services, as well as the common law of contracts. Key statutes include:

Construction Contracts Act 2002

Contracts (Privity) Act 2002

Contractual Mistakes Act 1977

Contractual Remedies Act 1979

Frustrated Contracts Act 1944

Minors' Contracts Act 1969

Illegal Contracts Act 1970

Sale of Goods Act 1908

Sale of Goods (UN Convention) Act 1994

Commerce Act 1986

Health and Safety in Employment Act 1992

Last updated 17 May 2016