Contract limits
- Your maximum contract value (MCV) depends on whether you’re accredited or unaccredited, as well as the nature of the contract.
- The MCVs for construction procurements are different to those for goods and services.
- If a contract is over your MCV, you need to seek concurrence before proceeding.
- The enforceable procurement provisions may also apply.
How to determine maximum contract value (MCV)
Before going ahead with any procurement, you must make sure the contract is within your maximum contract value (MCV). This will depend on the size and nature of the procurement and your agency’s accreditation level.
Don’t split up contracts artificially to avoid these limits. You must take the whole procurement into account.
Unaccredited agencies
If your agency is unaccredited and you want to procure goods or services not covered by a whole-of-government arrangement, the following MCVs apply.
| Contract value | What you must do |
|---|---|
| Less than $10,000 | You can buy from any supplier, so long as:
|
| Between $10,000 and $30,000 | You need to get at least 1 written quote |
| Between $30,000 and $650,000 | You need to:
|
| More than $650,000 | If your agency is covered by PBD-2019-05 you must comply with it, unless the goods or services are exempt. You must also get concurrence to your proposed procurement approach from an accredited agency within your cluster or NSW Procurement. |
Learn more about procuring low-value contracts.
Accredited agencies
Level 1 and level 2 accredited agencies have different rules about the size of contract they can procure.
Level 1 accredited agencies
If you’re procuring goods and services and your agency has level 1 accreditation, your authority to procure depends on the size of the contract and the level of risk involved. Generally, this means:
- Low-risk contracts. You can procure goods and services valued up to up to $50 million.
- Medium-risk contracts. You can procure goods and services valued up to $35 million.
- High-risk contracts. You can procure goods and services valued up to $20 million.
If your contract is above these values, you’ll need to seek concurrence from a level 2 accredited agency in your cluster or NSW Procurement. You can’t split contract values to get around these limits. You must consider the whole procurement.
Level 2 accredited agencies
Level 2 agencies have no maximum contract value and may procure within their budgetary limits.
Read more about the levels of accreditation and what they mean for your authority to procure.
Construction contracts
Limits for construction contracts are higher than for goods and services contracts.
Accreditation for construction procurement also falls under one of two different schemes, the Agency Accreditation Scheme for Construction (pre-2015) or the Agency Accreditation Scheme for Procurement (2015 onwards).
Read more about construction accreditation.
Unaccredited agencies
Generally, if your agency is unaccredited, the following rules apply.
| Contract value | Risk level | Action |
|---|---|---|
| Less than $1.3 million | Any | You have authority to procure |
| More than $1.3 million | Medium or high | You must:
|
| Between $1.3 million and $50 million | Low | You have authority to undertake the planning phase without support but for the delivery phase you must:
|
| Over $50 million | Low | You must:
|
Partially-accredited agencies
If your agency is partially-accredited, the following rules apply.
| Contract level | Risk level | Action |
|---|---|---|
| Less than $1.3 million | Any | You have authority to procure |
| More than $1.3 million | High | You must:
|
| Between $1.3 million and $50 million | Low, medium | You can undertake the phases you’re accredited for without external support but must: |
| Over $50 million | Low or medium | You must:
|
Covered procurements
If your agency is a ‘covered agency’ and your procurement is over the values listed below, it may be subject to the enforceable procurement provisions and is known as a ‘covered procurement’. Some types of procurement are exempt from the enforceable procurement provisions. Check the Board Direction for full details.
Covered procurements are subject to the rules contained in PBD-2019-05 Enforceable Procurement Provisions. These can impact the way you carry out your procurement.
There are 3 questions to determine if a procurement is covered:
- is your agency covered - refer to Schedule 1
- is it an exempt category or type of goods or services - refer to Schedule 2
- does it meet the thresholds:
- $657,000 (excluding GST) for goods and services procurements
- $9.247 million (excluding GST) for construction procurements
Related content
- Before you approach the market: Get an overview of what you need to do before approaching the market.
- Procurement planning obligations: Read about your obligations when it comes to planning a procurement.
- Government procurement arrangements: Discover what whole-of-government arrangements apply to procurement.
- Exemptions and preferences: Find out when you’re exempt from using a whole-of-government contract and which suppliers to give preference to.