Log in with RealMe

To access the Procurement online service, you need a RealMe login. If you've used a RealMe login somewhere else, you can use it here too. If you don't already have a username and password, just select "Log in" and choose to create one.

What's RealMe?

To log in to this service you need a RealMe login.

This service uses RealMe login to secure and protect your personal information.

RealMe login is a service from the New Zealand government that includes a single login, letting you use one username and password to access a wide range of services online.

Find out more at www.realme.govt.nz.

Rule 11:
Opt-out procurements

Primary requirement

  1. Agencies may opt-out of applying some Rules if the facts and circumstances meet one or more of the circumstances listed in Appendix 1.

Application

  1. Agencies must:
    1. be able to demonstrate that they have met the Principles and other procurement good practice guidance
    2. act lawfully and with integrity, be fair and transparent, achieve public value, and be accountable for their decisions.
  2. Agencies that wish to opt-out of applying the Rules must:
    1. obtain evidence of the facts and circumstances to verify the reason/s for the opt-out before    approaching the market, and
    2. document the rationale for the decision before approaching the supplier/s. 
  3. The rationale document must include:
    1. the name of the agency
    2. a description of the goods, services or works
    3. the maximum total estimated value (Rule 7) of the goods, services or works
    4. the specific opt-out that applies (from the list in Appendix 1)
    5. details of the facts and circumstances that justify the opt-out
    6. details that demonstrate that it will achieve public value; and
    7. the name and position of the person approving the decision to opt-out. 
  4. Agencies exercising an opt-out must apply Rule 2, Rule 3, Rule 5, Rule 8, Rule 27, Rule 35, Rule 36, Rule 45, and Rule 46, and the supplier complaint processes will still apply.
  5. Agencies exercising an opt-out must apply Rule 19, Rule 33, Rule 41, Rule 42, and Rule 43, when relevant.
  6. Agencies must publish a Contract Award Notice (Rule 32) on GETS for a procurement that it has exercised an opt-out.

More information

Appendix 1: Valid reasons for opting out of the Rules

Valid reasons for opting out of the Rules (Rule 11) are:

  1. Between government agencies: Any of the following agencies can purchase goods, services or works from each other:
    1. Public Service departments
    2. New Zealand Police
    3. New Zealand Defence Force
    4. agencies covered by the Whole of Government Direction
    5. Crown Research Institutes.

However, if the purchasing agency chooses to use an open competitive process it must apply the Rules. 

  1. Overseas: Goods, services or works purchased outside New Zealand for use outside New Zealand.
  2. Offices and premises overseas: Any procurement relating to constructing, refurbishing or furnishing New Zealand government offices and premises overseas.
  3. Non-contractual arrangement: Any non-contractual arrangement (e.g. a Memorandum of Understanding between two government departments) or any form of assistance including cooperative agreements (e.g. diplomatic assistance to another government).
  4. Land and buildings: Purchasing or renting land or existing buildings or other immovable property. This does not include refurbishment works or new construction works which are covered by the Rules.
  5. Conditional grant: Any form of conditional grant. However, an agency must not design or structure a procurement as a form of conditional grant to avoid applying the Rules.
  6. International development assistance: Providing international development assistance through multilateral or bilateral assistance, including aid in the form of conditional grants, budget support or any form of contribution or diplomatic assistance.
  7. International funding: Any procurement funded by an international grant, loan or other assistance or that must comply with an international organisation’s procedure where that procedure is inconsistent with the Rules.
  8. International organisation: Any procurement conducted under a procedure required by an international organisation or funded by an international grant, loan or other assistance that is inconsistent with the Rules.
  9. International agreements between countries: Agreements between countries for the joint implementation of a project.
  10. Public services: The provision of certain types of health services, education services and welfare services.
  11. Government's central financial control functions: Central banking control functions on behalf of government such as those carried out by the Reserve Bank, and Crown debt management functions such as those carried out by Treasury.
  12. Military and essential security interests: Measures necessary for the protection of essential security interests, procurement indispensable for national security or for national defence, the maintenance or restoration of international peace or security, or to protect human health, including:
    1. procurement of arms, ammunition or war materials, military equipment, support of military mission systems, or goods and services critical to the establishment or sustainment of strategically important military supply chains.
    2. stationing military or implementing a joint military project under an international agreement (for example, a peace-keeping deployment)
    3. procurement of a proven prototype co-developed or co-produced for military or essential security purposes using technical data or use cases or “know-how” that should not be exploited on the open market. 
    4. procurement of equipment, systems or services for military or essential security purposes to meet the intent of the AUS NZ Joint Statement on Closer Defence Relations, or to fulfil or enable the terms of international agreements, provided they operate in the context of New Zealand’s international trade agreements.
    5. a measure to protect: public morals, order or safety; human, animal or plant life or health; intellectual property; or relating to goods, services or works of persons with disabilities, philanthropic or not-for-profit institutions, and prison labour.

Opt-out decisions

The opt-out rule allows the government flexibility in the way it sources goods, services or works in certain situations.

It does not authorise having no process at all when it comes to awarding contracts. 

Opting out of a competitive process is strongly discouraged where there are suppliers that could be capable of delivering the contract. 

You should always consider your options and use good judgement to decide whether or not opting out of the Rules is the best way to meet your needs. 

Top