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Considering engaging contractors and consultants

COVID-19 continues to have a significant impact on the New Zealand labour market, including the contingent workforce that many public and state service agencies engage to support their work.

Given this environment, when you are engaging contractors and consultants and where employee pay restraints are clearly visible in the public sector, it may be timely to consider whether the rates paid for contractors and consultants are reasonable and relevant to New Zealand’s current economic conditions.

Things to consider could include:

  • Reviewing options i.e. whether the role is needed and/or whether an employee either within your agency or from the wider public service could be redeployed to perform the role.
  • Negotiating the proposed fee rate to ensure it reflects New Zealand’s current market conditions and public value.
  • Whether it is appropriate to extend the State Services Commission's (SSC) key principles and guidance on applying pay restraint in the public sector to contractors and consultants by suspending any increases to fee rates for contract renewals or extensions through to June 2021.
  • Designing the role so that the contractor or consultant trains agency employees to perform the role, thereby allowing a transition of services in-house and a building of long-term organisational capability.

Agencies often have a genuine need to engage contractors and consultants to deliver on work programmes and deliver value to New Zealand and in line with State Services Commission (SSC) guidance, it is not about constraining this legitimate expenditure. It also would not apply to the engagement of vulnerable contractors (e.g. contractors providing cleaning, security, onsite catering, grounds maintenance or laundry services).

You should also bear in mind that the economic impacts of COVID-19 create challenges for contractors and consultants and being consistent with Government’s expectations, agencies should pay 95% of domestic invoices within 10 business days.

Contractors and consultants guidance - Te Kawa Mataaho Public Service Commission

Pay restraint in the public sector [PDF, 341KB] - Te Kawa Mataaho Public Service Commission