PBD-2026-02 Engagement of professional services suppliers

Detailed Outline

This Direction deals with procurement of services by or for a government agency within the meaning of the Public Works and Procurement Act 1912 (as amended).

Definitions of Professional Services and Consultancy

Professional Services are a type of service where external individuals or companies are engaged on a temporary basis to provide expertise, experience, and specialised knowledge to help the client implement, manage, or improve a specific area of their business.

Consultancy is a subset of Professional Services.  A consultant is defined as a person or organisation engaged to provide recommendations or professional advice to assist decision-making by management.

Generally, consultants are distinguished from other professional services contractors by:

• the advisory nature of the work.
• the output reflects the independent view or findings of the consultant.
• the consultant's performance of the work is not, or mostly not, under the client’s direct supervision and direction.
• the consultancy being the sole or majority element of the contract in terms of relative value or importance.

Non-consultancy professional services generally involve:

• implementation or delivery of an existing proposal or strategy.
• output that does not represent the independent view of the professional services provider.
• more direct supervision and control by the client.

Professional services engagements sometimes involve both ‘consultancy’ and ‘non-consultancy’ elements. In such cases, agencies should classify the engagement based on the predominant component by value or split the engagement into separate ‘consultancy’ and ‘non-consultancy’ contracts. The classification must be indicated in every professional services engagement contract.

Behaviours when engaging consultants and professional services firms 

Value for money, probity and transparency are key objectives of government procurement.

When engaging an external consultant (and professional services firms more generally), agencies must ensure:

• the need to use a consultant, rather than other resource types, is defined.
• the duration of the consultancy is as short as possible to undertake the required work.
• any variations to the engagement contract have a clear and specific justification.
• the engagement is subject to appropriate confidentiality provisions.
• conflicts of interest (potential, perceived or actual) are declared and managed prior to and throughout the engagement.
• an assessment of the consultant’s work is performed.
• appropriate documentation and record keeping practices.
• clear identification of the consultant when working within government agencies, for example in e-mail systems, security passes, and staff directories.
• the consultant does not have decision-making authority in recruitment or selection processes for other consultants and contractors.

Reducing over-reliance on external resources and leveraging government internal expertise

Agencies must consider the requirements of the Core NSW Public Service Work Policy, which outlines the types of work that must be done by government sector employees and the types of work that should be done by government sector employees, some of which must not be done by external consultants.

The collection of Core Work procurement data is authorised under the Whole of Government Core Work Circular (C2025-05) and supports the Premier’s Department’s mandate for monitoring and reporting on Core Work capabilities across the government sector.

Agencies should consider whether the relevant expertise and advice can be sourced within government, for example via the NSW government’s Expert Advisory Network (EAN), before procuring from the external supply market.

Agency reporting requirements

All agencies are required to report ’consultant‘ engagement data to the Procurement Board through the Principal Department of an affiliated group of agencies. The inclusion of non-consultant professional services engagement data is recommended. The data collection field requirements are listed in Table 1 and may expand or be amended over time.

Table 1: Consultant Data Collection Field Requirements

All agencies are required to report ‘consultant’ expenditure in accordance with the Annual Report requirements in the Government Sector Finance Act 2018.

Advice sourced from within the NSW government, including advice sourced via the EAN, is outside the scope of these agency annual reporting requirements.

Services provided under the NSW Government Legal Services Panel are excluded from the definition of a consultant for annual reporting purposes only.

Whole-of-Government procurement arrangement owner reporting requirements

The responsible agency of whole-of-government professional services schemes or contracts are required to report annually to the Board and the Minister for Domestic Manufacturing and Government Procurement on use of the procurement arrangement.

This report will include a level of comparative analysis across agency portfolios on trends in the number of engagements, total spend, compliance with scheme requirements, and other insights regarding use of professional services suppliers under such whole-of-government professional services schemes or contracts.

Context

In NSW government’s devolved procurement model, there are several whole-of-government procurement arrangements covering different types of professional services including, but not limited to:

• Performance and Management Services Scheme (SCM0005) - Responsible agency: NSW Procurement / Treasury.
• ICT Services Scheme (SCM0020) and the ICT Professional Services Purchasing Arrangements (Panel Contract 1597) - Responsible agency: Digital.NSW / Department of Customer Service.
• Consultants in Construction up to $9 Million Scheme (SCM1191) and Consultants in Construction above $9M Procurement List (SCM10611) - Responsible agency: NSW Public Works / Department of Regional NSW.
• Government Architect's Strategy and Design Scheme (SCM0801) - Responsible agency: Department of Planning and Environment.
• Legal Services Panel (2021/001) and Regional and Rural Legal Services Panel - Responsible agency: Transport for NSW.
• Built Heritage Conservation Consultants Scheme (SCM3831) - Responsible agency: NSW Public Works, Department of Regional NSW.

Refer to info.buy.nsw (professional services), the NSW Government Procurement Policy Framework and any applicable Procurement Board Directions for further information and guidance on these arrangements.