Government procurement can and should be used to support wider social, economic and environmental outcomes that go beyond the immediate purchase of goods and services.
The Government agreed on 23 October 2018 to a set of priority outcomes for agencies to leverage from their procurement activities and identified specific contracts or sectors for initial focus.
This paper sought approval to use government procurement to support additional outcomes, focusing on four priority areas.
Cabinet minute (CAB-18-MIN-0516.01) from 23 October 2018, for the proposal to use government procurement to support additional outcomes.
Agencies are expected to collectively focus on four priority outcomes where the greatest benefit can be achieved for New Zealand.
Increasing access to government procurement contracts for New Zealand businesses, with particular focus on those less able to access opportunities and those working in priority sectors (such as ICT, Māori and Pasifika businesses and businesses in the regions).
Increase the size and skill level of the domestic construction sector workforce and provide employment opportunities to targeted groups.
Improve conditions for workers and future-proof the ability of New Zealand business to trade.
Support the transition to a zero net emissions economy and reduce waste from industry by supporting innovation.
Through the Government Procurement Rules, agencies must now target specifically designated contract areas for these four outcomes. The designated contract areas for each priority outcome are listed below, along with the minimum requirements that agencies must meet in order to comply with the Rules.
Agencies must conduct reasonable due diligence and manage the contract to ensure these priority outcomes are delivered.
|Outcome||Designated contract area||Minimum requirement|
|Priority outcome one: access for New Zealand businesses||ICT services/computer software||When purchasing ICT services or software, agencies must consider how they can create opportunities for New Zealand Businesses. A New Zealand business is defined as a business that originated in New Zealand (not being a New Zealand subsidiary of an offshore business), is majority owned or controlled by New Zealanders, and has its principal place of business in New Zealand.|
|Priority outcome two: construction sector skills and training||Construction||When procuring construction works over threshold, agencies must include questions in their tender documentation about the skills development and training practices of the supplier and their subcontractors. Reasonable consideration must be given to those questions, and they must be included as weighted criteria when a weighted evaluation model is used.|
|Priority outcome three: employment standards||Cleaning services, security services, and forestry contracts||When procuring cleaning services, security services or forestry services (with a focus on low wage employment), agencies need to ensure that suppliers demonstrate compliance with employment standards within their business and through the domestic supply chain delivering that service. The supply chain is defined as all employees of firms sub-contracted by the tier one supplier, who are employed as cleaners, security staff or forestry workers.
Information on Employment standards can be found on the Minimum rights of employees page on Employment New Zealand's website. For cleaning contracts Part 6A of the Employment Relations Act for protection of vulnerable workers also applies.
|Priority outcome three: health and safety||Health and safety:
All contracts with a particular focus on forestry contracts and construction contracts
|All agencies must comply with their responsibilities under Health and Safety at Work 2015.
For designated contracts (forestry and construction) agencies must require their suppliers to ensure and demonstrate that they, and their domestic supply chain, demonstrate good health and safety practice.
|Priority outcome four: reducing emissions||Light vehicles||When purchasing vehicles from the All of Government Motor vehicles contract, agencies need to purchase vehicles that are 20% below their current emissions profile. Agencies can find out what their current emissions profile is on the Reducing government fleet emissions.|
|Priority outcome four: reducing emissions||Stationary/process heating systems||When purchasing heating systems for a government building, agencies need to ensure that they are buying a low emission heating option. Agencies must not purchase coal boilers.|
|Priority outcome four: reducing waste||Office supplies||When purchasing office supplies from the All of Government Office supplies contract, agencies need to purchase items that produce low amounts of waste and/or are recyclable.|
Agencies also need to ensure that they proactively seek to identify Māori and Pacific businesses and social enterprises that provide goods and services they are looking to procure and identify opportunities to involve them in their supply chains.