Enforceable procurement provisions

If your procurement is over a certain value, it may be subject to the enforceable procurement provisions.
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What you need to know
  1. If you’re procuring goods or services over a certain value, you usually must comply with PBD-2019-05 Enforceable procurement provisions.
  2. There are some exemptions to this, such as if you’re procuring health and welfare or education services.
  3. One of the most important requirements is that you must generally use an open approach to market.
  4. You also mustn’t discriminate against foreign suppliers or require them to have Australian experience.
  5. PBD 2019-05 also includes information you must include in your tender documents and specifies how you must advertise.

Find out if your agency is subject to enforceable procurement provisions

The Enforceable procurement provisions (PBD 2019-05) are legal requirements under Australia’s international procurement agreements.

This includes your obligations stemming from the World Trade Organisation Government Procurement Agreement (WTO GPA) and free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Enforceable procurement provisions (EPP) apply to goods and services procurements over a certain value. These procurements are called 'covered procurements'.

There are 41 NSW Government agencies that are subject to enforceable procurement provisions. You can find the full list of covered agencies in Schedule 2 of PBD-2019-05 (PDF).

Understand contract thresholds for enforceable procurement provisions

You generally need to comply with PBD 2019-05 if the estimated value of your procurement is more than:

  • $9.584 million (excl. GST) for construction contracts
  • $680,000 (excl. GST) for other goods and services.

You must assess every procurement before you approach the market to work out whether it meets these thresholds.

Estimate your contract value before you start procurement

To estimate the value of your procurement contract, you must include:

  • all goods and services you’re procuring
  • every form of remuneration you’ll pay suppliers, including premiums, fees, commissions, interest and other revenue streams
  • any options, extensions, renewals or other mechanisms that could be executed during the life of the contract.

Note that these values exclude GST.

Where you’re awarding a contract in multiple stages or parts, you must include the entire procurement. This remains true even where you’ll be using multiple suppliers.

If you can’t accurately estimate the contract value, PBD 2019-05 will be deemed to apply.

Check the exemptions for enforceable procurement provisions

Procurements of some goods and services are exempt from complying with PBD 2019-05, even where the value is above the threshold.

These include procurements for:

  • health and welfare services, including plasma fractionation services
  • education services
  • government advertising services
  • research and development services
  • fiscal agency or depository services
  • services related to the sale, redemption or distribution of public debt
  • land, including existing buildings, immoveable buildings and other property rights
  • foreign assistance
  • public employment contracts, including contracts for labour-hire
  • goods and services that will be consumed outside of Australia
  • motor vehicles
  • public passenger transport services
  • transport infrastructure.

These services are not defined in the international procurement agreements and are not defined in PBD-2019-05, so you should use their ordinary meaning when you’re deciding whether to apply PBD-2019-05.

You must be able to justify why you’ve excluded a procurement under these exemptions if a supplier lodges a complaint that they shouldn’t have been.

You can read the full list of exempt procurements in Schedule 2 of PBD 2019-05 (PDF).

Take an open approach to market

Australia’s international trade agreements centre on creating fair and open trade between party countries.

In line with this goal, PBD 2019-05 requires that you must use:

  • an open approach to market
  • a procurement panel established by an open approach to market
  • a procurement list established under the Direction.

In certain situations, limited tendering is used.

Use limited tendering in some circumstances

Limited tendering refers to circumstances where you directly invite one or more suppliers to participate in a procurement, such as through a request for quote (RFQ), request for tender (RFT) or expression of interest (EOI).

Inviting a supplier on a procurement list (or prequalification scheme) isn’t limited tendering.

You can only use a limited tender in the circumstances specified in clause 15 of PBD 2019-05. These include:

  • where you’ve already made an open approach to the market but:
    • didn’t receive any responses
    • didn’t receive any responses that met your evaluation criteria
    • you reasonably believe no response offered value for money
    • you determined it wasn’t in the public interest to award a contract, or
    • you reasonably believe a tenderer has colluded with someone in the procurement process.
  • only one supplier can provide the goods or services and, due to technical reasons, there’s no alternative or substitute
  • you need extra goods or services and a change of supplier:
    • would mean duplicating costs or cause you significant inconvenience
    • isn’t possible due to technical reasons, such as not being compatible with the equipment, software or installations you initially procured
    • isn’t possible due the original supplier’s warranty conditions.
  • unforeseen circumstances mean you need the goods or services urgently and you won’t get them in time using an open approach to market.

When you award a contract through a limited tender you must prepare a written report setting out the circumstances and conditions justifying a limited tender. You must also include the value and type of goods and services procured.

Read more about the Approach to market.

Above all, support fair and open trade

Other requirements in PBD 2019-05 that ensure your procurements are fair and open to our trade partners. These include:

  • not allowing you to discriminate against a supplier due to location, foreign affiliation or ownership or the origin of their goods and services
  • forbidding you from requiring a supplier to have Australian experience
  • prohibiting offsets. These are any condition or undertaking that requires you to use Australian content or an Australian supplier, as well as actions aimed at encouraging Australian local development or improving Australia’s balance of payments accounts
  • banning you from insisting on unnecessary specifications that act as obstacles to trade
  • setting minimum requirements for what you must include in the procurement documentation
  • setting minimum periods for advertising procurements and identifying where they must be advertised
  • not allowing you to exclude suppliers from a procurement except in some limited situations.