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.
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:
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:
Follow the steps below during the lifecycle of your procurement.
These steps are available to download in one diagram for your reference.
Confirm whether you must apply economic benefits to your procurement.
Do you need to include economic benefits in your contract?
Plan to include economic benefits in the procurement
Approach the market with economic benefits in mind
Assess whether the supplier’s response demonstrates that they will provide economic benefits.
Scoring economic benefits when evaluating the responses
Ensure your contract specifies desired outcomes from economic benefits, KPIs and reporting requirements.
Reflect economic benefits in the awarded contract
Determine the total value of your contract.
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)).
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.
A New Zealand business:
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.
When you plan to include economic benefits in your procurement project, follow these steps:
Identify strategic priorities before you undertake a procurement process. These could be informed by:
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.
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:
Economic benefits could then be prioritised or shortlisted based on:
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.
What does success look like? Describe the high-level intent and/or logic.
What are the strategic drivers? Describe any related strategies, policies that link or underpin this intent.
What does the current state look like? Describe and link to information and evidence.
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.
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
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.
How will we know if change is happening? Describe potential indicators or measures we can use to see if the outcomes are occurring.
Reflect on these sections of your procurement plan for including economic benefits considerations. You should review:
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.
Structure your approach to market and procurement process to support economic benefits, for example:
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.
When scoring economic benefits, consider:
It's important to provide evaluators with clear guidance and weighted criterion. Further information on evaluation methodology is available.
The economic benefit commitments set out in the successful tenderer’s submission should be appropriately reflected in the contract. The contract should include:
If your activity was:
Creating direct or indirect employment opportunities (part-time or full-time)
Your potential metrics could be:
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.
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.
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:
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.
Contact us for further advice on considering economic benefits in your procurement.
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.