Exemptions and preferences

Sometimes you won’t have to use a government procurement arrangement, other times you need to use certain suppliers.
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What you need to know
  1. You may not need to use a government contract if your procurement is below a certain value.
  2. Special exemptions also apply when you use a small businesss, SME, Aboriginal-owned business or approved disability organisation.
  3. Sometimes you don’t have to follow Procurement Board policies and directions, especially if the procurement is urgent or has Cabinet approval.
  4. You must preference certain suppliers for some contracts.

Exemptions from 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. However, you should always make sure you’re still achieving value for money.

You may be able to do this, for example, by confirming 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 these 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

ValueSupplier typeProcessPolicy or Board Direction



You can buy directly from any supplier.

PBD-2019-04 Approved procurement arrangements


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

You can buy directly from a small business.

SME and Regional Procurement Policy

PBD-2019-03 Construction procurement opportunities for SMEs


Aboriginal-owned business (recognised through an appropriate organisation)

You can buy directly from an Aboriginal-owned business

Aboriginal Procurement Policy

Aboriginal Participation in Construction 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

PBD-2019-03 Construction procurement opportunities for SMEs

No limit

Approved disability employment organisation

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

Public Works and Procurement Regulation 2019

Covered procurements

Where PBD-2019-05 Enforceable Procurement Provisions covers your procurement, it takes precedence over all other rules and arrangements. However the enforceable procurement provisions exempt some types of procurements, and the exemptions align with these.

Read more about covered procurements.

Exemptions from following policies

Sometimes, you don’t have to comply with NSW Government procurement policies, including Board Directions. This could be, for instance, because there is an emergency situation and your procurement needs to be conducted quickly or because you’ve received approval from Cabinet.

Emergency procurements

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 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.

Cabinet- or ERC-approved procurements

Sometimes Cabinet or the Expenditure Review Committee (ERC) will approve a procurement. When this happens, you don’t have to comply with Procurement Board policies or directions to the extent that they’re 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 PBD-2019-05 Enforceable Procurement Provisions.

Other government entities

You can buy goods and services from another government entity that supplies these as part of its principal functions. However, the price you pay, as well as the terms and conditions must be consistent with TPP 2002-01 Competitive neutrality principles (PDF).

Preference for certain suppliers

There are times you must give preference to buying from certain suppliers, particularly Aboriginal-owned businesses and SMEs. This applies even when you’re buying from a standing offer, panel or prequalification scheme.

There are different preference rules for goods and services procurements and construction procurements.

Goods and services procurements

Value Supplier typeProcess


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.


Aboriginal-owned business

You should first consider any Aboriginal-owned business on a prequalification scheme. You may also purchase directly from an Aboriginal-owned business based on one quote. You can invite multiple Aboriginal-owned businesses to apply in a selective tender.

Many Aboriginal-owned businesses are also SMEs, but sometimes you will need to choose which business type you prefer. If you choose an Aboriginal-owned business, you don’t also have to choose an SME.

Read more about Aboriginal-owned businesses.

Read more about supporting SMEs and regional businesses.

Construction contracts

Value Supplier typeProcess

<$1 million


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.


Aboriginal-owned business

You may negotiate directly with suitably qualified Aboriginal-owned businesses.

<$1 million

Aboriginal-owned business

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

Read Aboriginal Procurement in Construction Policy.

Read PBD-2019-03 Access to Government Construction Procurement Opportunities by SMEs.

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