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.

Integrating economic benefits in your procurement

Government procurement can be used to have a positive impact on New Zealand’s economy. Use this guide to apply Rule 8: Economic benefit to New Zealand.

What are economic benefits?

The concept of economic benefit to New Zealand refers to the positive impact that an activity, policy, initiative or investment has on the nation’s overall economic well-being. Within the context of Government procurement, agencies can determine economic benefit outcomes to achieve when procuring goods, services or works. Examples include, but are not limited to:

  • making better use of New Zealand resource, such as increasing workforce participation, providing training or apprenticeships, improving the pay or conditions of New Zealand workers or using spare industrial capacity 
  • using New Zealand businesses, including SMEs and regional businesses in delivering goods and services, either directly or as a subcontractor or in the supply chain 
  • creating export opportunities, boosting a businesses’ domestic supply chain and/or international competitiveness
  • developing New Zealand industry capabilities or capacity
  • developing and adopting innovative products or practices that benefit New Zealand communities 
  • considering the sustainability and or environmental benefit of the proposed solution
  • contributing to positive social and cultural outcomes in New Zealand communities.

Economic benefits fit within the assessment of public value. Public value means getting the best possible result from your procurement, using resources effectively, economically and responsibly. It means taking into account:

  • procurement’s contribution to the results you’re trying to achieve, including economic benefits
  • the total costs and benefits of a procurement (also known as ‘total cost of ownership’).

What is public value?

How to integrate economic benefits throughout the procurement lifecycle

Follow the steps below during the lifecycle of your procurement.

These steps are available to download in one diagram for your reference.

1. Before you start

Confirm whether you must apply economic benefits to your procurement.

Do you need to include economic benefits in your contract?

2. Plan to include economic benefits

  • Identify your strategic objectives.
  • Complete market analysis and engage with key stakeholders.
  • Identify economic benefits.
  • Determine the weightings of your economic benefits as a minimum of 10% for evaluation purposes.
  • Update your procurement plan.

Plan to include economic benefits in the procurement

3. Approach the market

  • Confirm your approach to the market.
  • Structure your approach to the market to be proportionate to the size, value and complexity of the procurement.
  • Avoid disadvantaging SMEs with complex procurement documentation.
  • Ensure information is clear and easy to understand.
  • Develop questions, supplier guidance and evaluation guidance.

Approach the market with economic benefits in mind

4. Evaluate responses

Assess whether the supplier’s response demonstrates that they will provide economic benefits.

Scoring economic benefits when evaluating the responses

5. Award the contract

Ensure your contract specifies desired outcomes from economic benefits, KPIs and reporting requirements.

Reflect economic benefits in the awarded contract

6. Manage your contract

  • Identify appropriate business leads to manage the delivery of economic benefits in your contract.
  • Monitor economic benefits.

Manage the contract to deliver economic benefits

1. Do you need to include economic benefits in your contract?

Determine the total value of your contract.

  • Is it $100,000 and above for goods, services and refurbishment works?
  • Is it $9 million and above for new construction works?

Yes – apply Rule 8.1

The strategic objective of Rule 8.1 is that procurement activities deliver economic benefits to New Zealand in the context of determining public value. You must seek economic benefits in every over-threshold procurement.

Your tender documents should focus on your desired economic benefits. Frame questions in such a way that both international and New Zealand businesses can respond. 

You must not discriminate against suppliers on the basis of their location (and other factors, as listed in Rule 4). This applies throughout the procurement process and while determining the economic benefits you’re seeking. For example, you can't require a primary contractor to be New Zealand-based or located in a specific region, but you can ask how they propose to use New Zealand businesses in any subcontracting.   

You must include a minimum 10% weighting on economic benefits for evaluation purposes in the procurement documentation (Rule 8.5(c)).

No – apply Rule 8.2

Rule 8.2 provides targeted support to New Zealand businesses by awarding government contracts to them where they have the capability and capacity to deliver to your requirements. This expectation sits alongside getting public value. 

You have considerable flexibility with below threshold procurements but are expected to follow good procurement practice and your agency’s procurement policies. 

Where you apply evaluation criteria to several responses (for example, cost, capability) and receive comparable scores, you should award the contract to a New Zealand business if they’ve demonstrated they can deliver at an acceptable price.  

Rule 8.2 applies to primary procurement. It does not apply to secondary procurement. The award of contracts under panel arrangements is governed by the method/s identified in the Panel Guide or panel arrangements. You should look for opportunities to select New Zealand business, including small and medium sized enterprises. 

Rule 8.2 is subject to the Australia New Zealand Government Procurement Agreement. This agreement gives Australian and New Zealand suppliers equal opportunity and treatment. The Agreement does not have value thresholds. It therefore applies to all procurements, which means that in applying Rule 8.2, you should consider capable Australian suppliers as well as New Zealand businesses.

What is a New Zealand business?

A New Zealand business:

  • is 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.  

For the purposes of Rule 8.2, your agency can rely on a self-declaration by a supplier for being a New Zealand or Australian business.

You can also do your own due diligence and make reasonable enquiries. This might include, for example, checking a business’s structure on their website or the New Zealand Companies Office website.

2. Plan to include economic benefits in the procurement

When you plan to include economic benefits in your procurement project, follow these steps:

  • Identify your strategic objectives.
  • Identify economic benefits.
  • Ensure economic benefits are specific and measurable.
  • Include reference to economic benefits in your procurement plan.

Identify your strategic objectives

Identify strategic priorities before you undertake a procurement process. These could be informed by:

  • the overarching strategic objectives and/or desired outcomes of your agency
  • the overarching strategic objectives of the project
  • specific context, such as:
    • the business case for the project or expenditure 
    • any relevant government policies or directions
    • strategies from the region or local community where the work will happen.

There may not be strategic objectives for lower value or transactional procurement. However, you can identify value adds based on the type of spend and apply the guidance under 'Identify economic benefits' below as the starting point.  

Identify economic benefits

Agencies can determine what economic benefits they want in a procurement. The first step is to group the economic benefits into main categories or themes.

An agency can make decisions that best balance both the objectives of seeking economic benefits that align the agency’s strategic objectives and the wider New Zealand economy.

For example:

  • Employment – Our project is based in the Northland Region. We have opportunities to create employment. The unemployment rates for young people not in employment, education or training (NEETs) is 16.2%, greater than overall unemployment of 4.8% in the region. We could focus on creating opportunities for younger workers to enter employment or an industry training programme.
  • SME Growth – We are seeking specialist IT support services over a 5-year period. This could be an opportunity to support New Zealand small and medium sized enterprises, including as subcontractors, to enable them to grow their revenue and track record with Government.

Economic benefits could then be prioritised or shortlisted based on:  

  • Proportion – Is the extent and scale of the desired outcome proportionate to size, risk and complexity of the procurement? A large-scale procurement would include more and/or ambitious economic benefits relative to a smaller procurement that is likely to have modest economic benefit requirements. You should only include economic benefits that you are sufficiently resourced to monitor or report against. This will be particularly relevant for smaller agencies.
  • Relevance – Is the desired outcome relevant to the nature of the procurement, the supply market or sector, and geography?
  • Impact – Does one economic benefit have potential to deliver greater impacts than another economic benefit?

Ensure economic benefits are specific and measurable

The following factors can be used to determine what economic benefits to seek and put in your procurement plan or RFx documents. They should be specific, comparable and measurable. 

Impact

What does success look like? Describe the high-level intent and/or logic.

Drivers

What are the strategic drivers? Describe any related strategies, policies that link or underpin this intent.

Baseline

What does the current state look like? Describe and link to information and evidence.

Outcomes

What outcomes are we seeking? What are the short, medium and long term outcomes that we're seeking and how do they fit together logically with the proposed activity?

Use active terms like increased, decreased, and improved to describe outcomes. 

Target or priority groups

Are there any target/priority groups? These could be particular demographics, locations or types of entities. Include the logic for these target groups. 

Rule 4: Non-discrimination and offsets

Scale

What is the scale of the outcome? For smaller procurements, the benefits are at a supplier or individual level. Larger procurements could impact at a regional or industry level.

Indicators

How will we know if change is happening? Describe potential indicators or measures we can use to see if the outcomes are occurring.

Include reference to economic benefits in your procurement plan

Reflect on these sections of your procurement plan for including economic benefits considerations. You should review:

  • background and objectives
  • market analysis
  • requirements and costs
  • key stakeholders and engagement plan
  • market engagement
  • evaluation methodology (note the minimum 10% mandatory weighting)
  • contract and performance mechanisms
  • risk management.

3. Approach the market with economic benefits in mind

Provide the necessary information

Agencies must include all the information that suppliers need to prepare and submit in each Notice of Procurement. This includes clear information on what economic benefits you are seeking and the evaluation criteria that will be used to assess the economic benefits specified your RFx document.

Rule 17: Notice of procurement

The type and amount of information collected should not create additional cost for respondents bidding for government contracts. It should not disadvantage businesses. Only ask for information that you intend to evaluate. For example, including unnecessary or onerous requirements in tender documentation could result in a proportionally greater burden on SMEs than larger businesses, as SMEs have fewer resources to demonstrate their capability to meet the requirements.

Provide relevant information and prompts, such as scenarios and examples, to help potential suppliers understand and respond to the economic benefits criteria.

Approaches to achieve economic benefits

Structure your approach to market and procurement process to support economic benefits, for example:

  • unbundling larger contracts into smaller packages (for example, regions). This gives SMEs greater opportunities
  • using interactive procurement techniques such as ‘face to face’ procurement to reduce supplier burden
  • providing supplier briefings and guidance for responding to a contract opportunity.

Tender questions

Agencies should develop questions and evaluation guidance that suppliers can use to prepare their responses. 

The number of questions and information being requested to support Economic Benefits from a supplier needs to be proportionate to the value, risk and complexity of the procurement.

Be clear about what you want from the economic benefit and assess this against track record, experience, capability and commitment to deliver.

4. Scoring economic benefits when evaluating responses

When scoring economic benefits, consider:

  • Specificity – the ability to provide concrete information on what the supplier is offering
  • Transparency – identifying known or potential issues and challenges and providing a degree of realism in proposed initiatives and actions
  • Partnerships – working with others may strengthen the approach to realising economic benefits
  • Commitment – clarity of priorities, prior experience and existing strategies/policies and practice support a strong commitment to economic benefits
  • Impact – The likelihood and impact of the proposed initiative contributing positively to the New Zealand economy. This criteria will assist when comparing different types of economic benefits.

It's important to provide evaluators with clear guidance and weighted criterion. Further information on evaluation methodology is available.

Evaluation methodology

5. Reflect economic benefits in the awarded contract

The economic benefit commitments set out in the successful tenderer’s submission should be appropriately reflected in the contract. The contract should include:

  • Desired outcomes – What economic benefits has the successful tenderer committed to?
  • Targets and KPIs – Are there specific targets or key performance indicators that need to be included in the contract (and ensure these are proportionate to the value of the contract)?
  • Measurement and reporting – How will we measure the benefits and how will we report them?

An example of economic benefit metrics to include in your contract

If your activity was:

Creating direct or indirect employment opportunities (part-time or full-time)

Your potential metrics could be:

  • number of new entrants into employment – part-time, full-time, level by group/cohort
  • training/work experience provided by group/cohort (in people-hours)
  • retention in training or employment at key time intervals, for example, 26 weeks or 52 weeks.

6. Manage the contract to deliver economic benefits

Economic benefits are generated during the delivery of a contract. For this reason, good contract management is important in ensuring the proposed outcomes are achieved.

Measure, report and improve

Your agency is required to report on the implementation of economic benefits as part of demonstrating compliance with the Government Procurement Rules.

To demonstrate compliance, the Government Electronic Tenders Service (GETS) will be updated by 1 December 2025 with new data capture.

  • When completing a Notice of Procurement, agencies must attest (yes/no) they are complying with the requirement to seek economic benefits to New Zealand and record the weighting.
  • When completing a contract award notice – there will be fields on high level categories of economic benefits that are being built into contracts.

This will provide a point-in-time central view that agencies are complying with the Rules and the types of benefits sought.

Benefits realised from contracts should be tracked over time and incorporated into regular procurement performance reporting.

Further guidance and templates to ensure effective contract management and planning are available: 

Understanding your contract management responsibilities

Introduction to supplier relationship management

Panels, collaborative procurement and secondary procurement

Agencies are not required to apply the minimum 10% evaluation criteria to secondary procurement.

Agencies are required to seek economic benefits in primary procurement, including when establishing a panel contract. Where they are negotiated as part of the primary procurement, the supplier will be expected to deliver them as part of further work done through secondary procurement.

For existing panels and contracts, there may be opportunities to incorporate economic benefits into future extensions. They must be considered in return-to-market activity.

More help with integrating economic benefits

Contact us for further advice on considering economic benefits in your procurement. 

Contact us

Examples of how to integrate economic benefits

These illustrative examples show how economic benefit objectives can be integrated into different types of procurements. They're not intended to prescribe a specific approach or process in all cases.

Top