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 for goods and services procurement, and to what level.
  2. If a contract is over your allowable maximum contract value (MCV), you need to seek procurement assurance.
  3. The enforceable procurement provisions apply to both goods and services and construction procurement.

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:
    • $680,000 (excluding GST) for goods and services procurements
    • $9.584 million (excluding GST) for construction procurements

Find out more about covered procurements.

Construction Procurement
  • Covered procurements apply to both goods and services and construction procurement
  • Limits for construction contracts are higher than for goods and services contracts.

Read more about construction accreditation.

How to determine maximum contract value (MCV) for goods and services

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.

How unaccredited agencies procure goods and services

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 $680,000You 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 $680,000If 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.

How accredited agencies procure goods and services

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.