Detailed Outline

This Direction applies to the procurement of goods and services of any kind, including construction, by a government agency within the meaning of the Public Works and Procurement Act 1912 (the Act) except as noted. All values are exclusive of GST.

Requirements for goods, services and construction procurement

Order splitting

An agency must not split orders to avoid procurement threshold levels and/or governance requirements.

Use of whole of government contracts and prequalification schemes

A government agency must use whole-of-government contracts for obtaining the goods or services to which those contracts apply, except where specific exemptions are provided by Procurement Board policies, directions or the Public Works and Procurement Regulation 2019. View the list of whole of government contracts.

A government agency must also use the following whole of government prequalification schemes to obtain the goods or services to which those schemes apply:

• Contingent Workforce

• Financial Services Prequalification Scheme (as required by PBD-2013-01C Financial assessments), unless the agency undertakes its own financial assessments of suppliers

• ICT Services

• Motor Vehicle Acquisition

• Office Furniture Prequalification Scheme

• Operational Telecommunications Equipment, Infrastructure and Services (as required by DFSI-2019-01 NSW Government Operational Communications Strategy)

• Prequalification Scheme for General Construction Works when procuring construction work valued up to $1 million covered by the categories in the scheme (as required by PBD-2014-04C), except:

  • if the agency issues an open tender, or

  • if the agency engages a local contractor for a one-off contract valued under $30,000 and formally invites the contractor to become prequalified.

Limited exceptions to the use of applicable mandatory whole-of-government procurement arrangements (contracts and prequalification schemes) are permitted where no other exemptions apply and the conditions set out below are met. Exceptions are permitted when an existing mandatory whole-of-Government procurement arrangement meet an agency’s requirement but the agency believes it will not meet their requirement optimally, and where existing exemptions do not apply. Where exemptions processes exist for mandatory whole of government procurement arrangements e.g. exemption process for the whole of government ICT Services Scheme, those processes take precedence over these conditions.

• Maintaining probity and fairness, and value for money All procurements that are exceptions must meet the probity and fairness requirements defined in s.176(1)(c) and s.176(2) of the Public Works and Procurement Act 1912, and ensure value for money is achieved (applying Section 1 of the Government Procurement Policy Framework as appropriate).

• Appropriate authorisations (1) The cluster Secretary or delegate must approve all exceptions, (2) An agency not intending to use a mandatory whole-of-government arrangement must notify the owners of the arrangement in advance.

• Reporting to the PLG All procurements that are exceptions to mandatory whole-of-government arrangements must be reported to the PLG at the next scheduled meeting.

• Enforceable Procurement Provisions Agencies should note that the transitional provision in clause 29 in the Enforceable Procurement Provisions Direction (PBD-2019-05) applying to existing contracts (in place before the commencement of the EPPD Direction) does not apply if an agency purchases outside of those existing contracts, and a covered government agency may need to comply with PBD 2019-05 for that transaction.

Procurement approved by responsible Minister, Cabinet or any Cabinet Standing Committee

On 18 May 2021, the Minister for Finance and Small Business directed the NSW Procurement Board to require agencies to obtain approval from their responsible Minister, before entering into whole-of-government contracts, with the relevant Minister to make an assessment as to whether Cabinet consideration is necessary.

Where the procurement of goods and services by an agency has been considered and approved by Cabinet or a Cabinet Standing Committee, this board direction does not apply to the extent of any inconsistency. This includes where Cabinet or a Cabinet Standing Committee approves the undertaking of a procurement process to implement its decision.

In undertaking the procurement approved by Cabinet or a Cabinet Standing Committee, the agency is to have regard to the Procurement Policy Framework, Board Directions and other policies of the Board to the extent they are consistent with the Cabinet decision, including the need to achieve value for money.

If the procurement is covered by PBD-2019-05 Enforceable Procurement Provisions, the agency must comply with the enforceable procurement provisions.

Supply by government entities

An agency may obtain goods or services directly from any government entity that provides those goods or services in the exercise of its principal functions.

The government entity providing the goods and services (i.e. the supplier) should ensure its pricing and other terms and conditions are consistent with the competitive neutrality principles in the Treasury Policy and Guidelines Paper TPP02-1 Policy Statement on the Application of Competitive Neutrality.

Procurement valued up to $10,000

Unless an agency has specific requirements related to safety and infrastructure, any agency may enter into an arrangement with any supplier for the procurement of goods and services valued up to $10,000 even if the goods or services are available on whole of government procurement arrangements. The procuring agency should ensure the rates are reasonable and consistent with normal market rates.

Accredited agencies – goods, services and construction

An agency that is accredited under the NSW Procurement Board’s Accreditation Program for Goods and Services Procurement or Accreditation Program for Construction Procurement may enter into an arrangement with a supplier for the procurement of goods and services consistent with its terms of accreditation.

Requirements for goods and services procurement only

Unaccredited agencies - goods and services procurement

An agency that is not accredited under the NSW Procurement Board’s Accreditation Program for Goods and Services Procurement may procure goods and services that are not available on whole of government procurement arrangements using the following methods.

These requirements do not apply to construction procurement.

A process diagram is attached.

Requirements for construction procurement only

Unaccredited agencies - construction procurement

The maximum value of construction work that can be undertaken by an agency that is not accredited under the Accreditation Program for Construction Procurement is $1.3 million.