Contract limits

You must make sure a procurement is within the maximum contract value of your agency's accreditation level before you approach the market.
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What you need to know
  1. Your maximum contract value (MCV) depends on whether you’re accredited or unaccredited, as well as the nature of the contract.
  2. The MCVs for construction procurements are different to those for goods and services.
  3. If a contract is over your MCV, you need to seek concurrence before proceeding.
  4. 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 valueWhat you must do
Less than $10,000You can buy from any supplier, so long as:
  • you meet safety and infrastructure requirements
  • the supplier charges normal rates
Between $10,000 and $30,000You need to get at least 1 written quote
Between $30,000 and $650,000You need to:
  • get at least 3 written quotes, or
  • get your agency head or an accredited agency within your cluster to approve your procurement process
More than $650,000If 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 valueRisk levelAction
Less than $1.3 millionAnyYou have authority to procure
More than $1.3 millionMedium or highYou must:
Between $1.3 million and $50 millionLowYou have authority to undertake the planning phase without support but for the delivery phase you must:
Over $50 millionLowYou must:

Partially-accredited agencies

If your agency is partially-accredited, the following rules apply.

Contract levelRisk levelAction
Less than $1.3 millionAnyYou have authority to procure
More than $1.3 millionHighYou must:
Between $1.3 million and $50 millionLow, mediumYou can undertake the phases you’re accredited for without external support but must:
Over $50 millionLow or mediumYou 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

Find out more about covered procurements.

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