Exemptions and preferences

Learn which government procurements qualify for exemptions, and when to give preference to some suppliers.
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What you need to know
  1. You may be exempt from using a government contract if your procurement is below a certain value.
  2. Special exemptions also apply when you use a small businesss, small to medium enterprise (SME), Aboriginal business or approved disability organisation.
  3. If the procurement is urgent or has Cabinet approval, you may be exempt from some NSW Procurement Board policies and directions.
  4. You must give preference to certain suppliers for some contracts.

Exemptions for whole-of-government contracts

The general rule is that you must use a whole-of-government contract wherever one exists.

However, there are some exemptions. You may qualify for an exemption due to the size or nature of the procurement or the supplier you choose to use.

Where you qualify for an exemption, you can often buy directly from a supplier. Even in this instance, you should always make sure you can still achieve value for money. For example, you should still be able to confirm the price you’re quoted is similar to market rates.

You should also check if your agency’s specific requirements or policies limit your use of exemptions due to concerns over safety, security or infrastructure.

Make sure you seek internal approval and follow your agency’s delegations manual.

List of exemptions

Check the list below to see if your procurement qualifies for an exemption.

ValueSupplier typeProcessPolicy or Board Direction

<$10,000

Any

You can buy directly from any supplier.

Approved procurement arrangements (PBD-2019-04)

<$50,000

Small business (up to 20 full-time equivalent employees)

You can buy directly from a small business.

SME and Regional Procurement Policy

Construction procurement opportunities for SMEs (PBD-2019-03)

<$250,000

Aboriginal business (recognised through an appropriate organisation)

You can buy directly from an Aboriginal business

Aboriginal Procurement Policy

<$1 million

SMEs, for innovative trials

If you’re accredited, you can negotiate directly for proof-of-concept testing or outcomes-based trials.

SME and Regional Procurement Policy

Construction procurement opportunities for SMEs (PBD-2019-03)

No limit

Approved disability employment organisation

You can buy goods and services via a single written quote.

Public Works and Procurement Regulation 2019

Exemptions for covered procurements

Where Enforceable procurement provisions (PBD-2019-05) apply, they take precedence over all other rules and arrangements. Procurements that are subject to enforceable procurement provisions (EPP) are called covered procurements.

However, even with covered procurements, exemptions exist.

Read more about covered procurements.

Exemptions for emergency procurement

In an emergency procurement, you don’t have to comply with Procurement Board policies or directions or your terms of accreditation. However, where possible, we encourage you to still achieve value for money and comply with the Procurement policy framework.

Only your agency head or their delegate can approve an emergency procurement. You must then report this emergency procurement as soon as possible to the NSW Procurement Board at nswp.policy@treasury.gov.au

Even where you’re engaging in an emergency covered procurement, you may be able to use a limited tender rather than an open approach to market. However, you must be able to prove unforeseen events caused extreme urgency.

Approved exemptions

In some cases, exemption may be granted by an authorising body.

Cabinet- or ERC-approved procurements

In some cases, the NSW Cabinet or the Expenditure Review Committee (ERC) will approve a procurement.

When this happens, you don’t need to comply with procurement board policies or directions if they are inconsistent with cabinet or standing committee decisions.

You still must comply with the procurement policy framework, board directions and other policies that don’t conflict with these decisions.

If you’re engaging in a covered procurement, you’ll also have to comply with Enforceable procurement provisions (PBD-2019-05).

Other government entities

You can buy goods and services from another government entity that supplies these as part of its principal functions.

However, the cost, terms, and conditions of the contract must be consistent with TPP 2002-01 Competitive neutrality principles (PDF).

Preference for suppliers from Aboriginal business, SMEs and regional businesses

There are times you must give preference to buying from certain suppliers, particularly Aboriginal businesses and small to medium enterprises (SMEs) or regional businesses.

This applies even when you’re buying goods and services (or construction services) that are available as part of a standing offer, panel, or prequalification scheme.

Goods and services contracts

Value Supplier typeProcess

<$250,000

SME or regional business
(up to 200 full-time equivalent employees)

When you’re permitted to buy directly from a supplier – that is you don’t need to get multiple quotes or issue a tender – you must first consider an SME or regional business.

<$250,000

Aboriginal business

You should first consider any Aboriginal business for procurements up to $250,000, even when there is a prequalification scheme or mandated whole-of-government contract in place.

You may also purchase directly from an Aboriginal business based on one quote. You can invite multiple Aboriginal businesses to apply in a selective tender.

Many Aboriginal businesses also qualify as small to medium enterprises (SMEs). If you choose to work with an Aboriginal business, you don’t also have to select an SME.

Read more about supporting Aboriginal businesses.

Read more about supporting SMEs and regional businesses.

Construction contracts

Value Supplier typeProcess

<$250,000

Aboriginal business

You may negotiate directly with suitably qualified Aboriginal businesses even where there is a prequalification scheme or mandated whole-of-government contract in place.

<$1 million

SME

You must make reasonable efforts to get a quote from an SME when you’re using these prequalification schemes:

The only exception is where no SME can provide a competitive quote.

<$1 million

Aboriginal business

You may invite multiple prequalified Aboriginal businesses to participate in a selective tender.

Read Access to government construction procurement opportunities by SMEs (PBD-2019-03).