Guide 2:
Do you need to include economic benefits in your contract?
Find out which part of Rule 8 applies to the procurement you're planning.
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 to maximise public value. You must seek economic benefits in every procurement above these value thresholds.
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 based on their location (and other factors, as listed in Rule 4).
Rule 4: Non-discrimination and offsets
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)).
Panels and collaborative procurement have a different application of Rule 8.
How do economic benefits apply to panels and secondary procurement?
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 aligns with achieving 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.
Australian suppliers
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.