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As Procurement Functional Leader, I am pleased to introduce the Government Rules of Sourcing. The Rules represent the government’s standards of good practice for the sourcing stages of the procurement lifecycle.

Government agencies spend billions every year buying goods and services from third-party suppliers and providers, accounting for around 18% of New Zealand’s GDP. These goods and services are often critical to our country’s economic and social well-being. Effective procurement helps us deliver better public services and realise value for money.

The Rules give us the foundations. By applying them we demonstrate that our government is open, transparent and accountable. The Rules help us to design processes that are robust and build confidence in government procurement practices. This will build greater public trust that our spending is well-planned and well-executed.

Government procurement can also contribute to economic growth. By seeking continual improvement and innovation, we can help those who win contracts become more competitive in international markets, increasing exports and supporting New Zealand’s economic growth.

The Rules make it easier for suppliers and providers to learn about contract opportunities, and introduce consistent, principled practices across government so that they can get on with delivering effective solutions.

David Smol
Chief Executive



The Rules were first published in October 2013, replacing the Mandatory Rules for Procurement by Departments issued by the Ministry of Economic Development in 2006.

The second edition of the Rules came into effect on 26 May 2014, to reflect Cabinet's decision to rescind Rule 67. This rule required agencies to source cleaning services only from members of the Building Services Contractors Association.

The third edition resulted from a general review in October 2014. It includes minor changes to provide greater clarity and reflects the following policy decisions:

  • extending the mandatory application of the Rules to a wider range of agencies (Rule 6)
  • applying certain Rules to opt-out procurements (Rule 13)
  • extending the opt-out for procurement between departments to a wider range of agencies (Rule 13)
  • making it clear that when a government agency is using weighted evaluation criteria to select a supplier, it must include the weightings in its Notice of Procurement (Rule 35)

The third edition has been approved by the Ministers of Finance and State Services and was endorsed by Cabinet on 30 March 2015. It has applied since 1 July 2015.


Focus on sourcing

The term ‘procurement’ covers all aspects of acquiring and delivering goods, services and works (refurbishment and new construction). It starts with identifying the need and finishes with either the end of a service contract or the end of the useful life and disposal of the asset. This is called the procurement lifecycle. The Guide to Mastering Procurement explains the 8 stages of the procurement lifecycle.

The Rules focus mainly on the process of sourcing. Sourcing is only part of the procurement lifecycle. It covers planning your procurement, market research, approaching the market, evaluating responses, and negotiating and awarding the contract.



The purpose of the Rules is to:

  • provide a refreshed, plain English format that is easier for agencies and suppliers to use
  • modernise the government’s approach to procurement to align with good international practice and provide better value for the New Zealand public
  • encourage agencies to use more strategic approaches and commercial expertise when procuring – including e-procurement
  • encourage agencies to engage early with the market to stimulate competition and innovation, and work with suppliers to develop better solutions
  • include Cabinet-directed procurement requirements and legislation.


Application to agencies

The Rules are mandatory for the agencies listed in Rules 6.1 and 6.2. For these agencies, where the Rules use the term must, the Rule is compulsory and non-compliance is a breach of the Rules. Where the Rules use the term should, this indicates good practice. Agencies referred to in Rule 6.3 must apply the Rules relevant to the commitments contained in, and the procurement covered under, the WTO Agreement on Government Procurement and other free trade agreements. For more information about trade agreements see the Access to export markets page.

A range of mechanisms are used to bind agencies to applying the Rules. An example is a Whole of Government Direction under s107 of the Crown Entities Act 2004.

These agencies may be audited for compliance with the Rules. Suppliers have a right to complain if they think that such an agency has not complied with the Rules. See the Guide to supplier feedback and complaints [412KB PDF].

Other agencies in the wider public sector are expected or encouraged to apply the Rules as good practice (see Rules 6.4 and 6.5). These agencies can interpret must as should.


Using the Rules

The Rules are a flexible framework designed to help agencies to make balanced procurement decisions.

Before you choose a procurement process, make sure you understand the nature of the market for the goods, services or works you need and the best way to source your requirements, then consider how the Rules apply.

Accompanying each Rule are blue boxes with more information, definitions, links to guides, tools and templates, and examples. These do not form part of the Rules. They can be used, along with the background information in this section and Chapter 1, to assist with interpretation and to give greater context for the reader. Section and paragraph headings are not part of the Rules and should not be used to assist with interpretation.

Words and phrases that have a special meaning are marketed in italics, (eg Request for Tender and new construction works). Special meanings are explained on the Definitions page.

When ‘includes’ or ‘including’ is used before a list in a Rule, or examples are provided, it means that the relevant Rule may cover things that are not specifically identified in the list or examples.

References to Acts or Regulations include any amendments made to them and any Acts or Regulations that succeed them.

Individual Rules should not be read in isolation from each other and the Principles of Government Procurement. An interpretation of each Rule that best fits its purpose within the Rules as a whole should be adopted.

Agencies can refer to the Rules as the single source of all New Zealand’s international commitments on government procurement. Readers do not need to refer directly to these treaties and agreements. Chapter 6 contains a summary of New Zealand domestic requirements for government procurement. Readers are directed to additional sources and will be required to refer to them directly.


Tools and resources

To help you transition to the Rules, the following resources are available:


Archived material


Last updated 5 October 2015