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Procurement response measure

Rule 12A allows the Procurement Functional Leader to implement procurement response measures.

Rule 12A – Procurement response measure

Rule 12A is unique as a government procurement Rule. It will only affect agencies if the Procurement Functional Leader (PFL) declares a procurement response measure.

The Rule enables the PFL to respond to a policy priority, emergency or crisis by declaring appropriate procurement response measures (procurement measure), to help achieve specific outcomes and drive positive change across the government procurement system. The PFL is the Chief Executive of the Ministry of Business, Innovation and Employment Hīkina Whakatutuki.

The Rule does not have unlimited scope and it does not give the PFL unlimited or unchecked authority to intervene in procurements in an ad hoc manner without a good reason.

Purpose of Rule 12A

By declaring a procurement measure, the PFL can mandate and deliver targeted interventions at a national, sectoral or regional level. Procurement measures may be applicable to some or all mandated agencies and their procurement activities. They are put in place for a set period to support defined objectives.

Procurement measures cannot override legal obligations and must be consistent with New Zealand’s international agreements on government procurement.

Working with agencies, procurement measures help the PFL to:

  • drive system-wide change and improvements
  • undertake targeted interventions and remedial actions
  • be more responsive to circumstances/events eg natural disasters
  • help government procurement play its part in the economic and social recovery and growth of New Zealand.

Situations where a procurement measure can be used

There are four broad categories where this Rule can be used.

Category 1. To deliver benefits for the procurement system

For example, compelling agencies to implement a new system or process so that the benefits can be enjoyed across all of government.

Category 2. To promote government policy or strategy through procurement

For example, introducing specific procurement requirements to help deliver a government policy.

Category 3. To support crisis or emergency relief and recovery

For example, to help government agencies manage immediate recovery and crisis management in a state of emergency.

Category 4. To undertake targeted interventions and remedial actions

For example, to help an agency manage a high-risk procurement where issues have emerged.

Process for declaring a procurement measure

The PFL will follow a set process in order to declare a procurement measure under this Rule. Certain ‘trigger’ events could allow the PFL to bypass some of the sign off processes for efficiency and speed. These events will be assessed on a case-by-case basis and will be subject to review. An example of a ‘trigger’ event is a national Level 4 COVID-19 lockdown.

The finalised procurement measure will require approval by the Chief Executive of MBIE, as the PFL. In addition, we will inform the Minister for Economic and Regional Development.

There is a 12-month time limit on procurement measures. Any procurement measure that needs a longer period will be referred to Cabinet.

Factors to consider before declaring a procurement measure

Before declaring a procurement measure, the PFL will consider a number of factors (as applicable and as circumstances permit). The considerations, including how they have been taken into account, must be documented.

The PFL must consider:

  1. Whether the issue/opportunity can be resolved/achieved without declaring a procurement measure.
  2. The scale, scope and likely impact of the proposed procurement measure. This includes an understanding of the:
    1. long-term vs short term impacts, including benefits and drawbacks
    2. number of persons/agencies affected and the degree to which they may be affected by the proposed procurement measure
    3. impact on the supply market
    4. impact on Māori and mana whenua cultural values and their relationship to land, water and taonga.
  3. The potential risks of not declaring the proposed procurement measure, and the anticipated risks of declaring it.
  4. The financial consequences of the proposed procurement measure.
  5. Whether the proposed procurement measure has, or is likely to have, a significant level of community, agency or sectoral support.
  6. The ability of the PFL (through the government procurement system) to have adequate and necessary resourcing and capability to successfully deliver and monitor the proposed procurement measure.

The above list of considerations is not exhaustive. There may be other considerations that should also be weighed for a given procurement measure.

Funding and resources

Each procurement measure will be assessed on a case-by-case basis and a formalised action plan will set out the funding and resource requirements for the PFL and affected agencies.