Commonwealth Procurement Rules 1 July 2024

Administered by Department of Finance

Legislation au F2024L00627 Rules Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

Issued by the authority of the Minister for Finance

 

Public Governance, Performance and Accountability Act 2013

 

Commonwealth Procurement Rules 1 July 2024

Purpose:

The Commonwealth Procurement Rules (CPRs) set out the rules that Commonwealth officials from non-corporate Commonwealth entities and certain prescribed corporate Commonwealth entities must follow when performing duties related to procurement. The CPRs are amended as required to give effect to government policy or improve their clarity. This update to the Commonwealth Procurement Rules is to reflect the Australian Government’s commitment to improving the competitive capability of small and medium enterprises when participating in Commonwealth procurement, considering the economic benefits of a broader range of procurements, and improving integrity and transparency on government and suppliers. The Commonwealth Procurement Rules 1 July 2024 also respond to various audit findings, senate inquiry reports and government initiated independent reviews and policy objectives.

Background:

The Commonwealth Procurement Rules incorporates the requirements of Australia’s international trade obligations and government policy in procurement into a set of rules which apply to Commonwealth procurement. The Commonwealth Procurement Rules are written in plain English, reflecting their purpose in being a set of rules procuring officials can and must refer to when undertaking relevant procurements. 

The Commonwealth Procurement Rules apply to procurements conducted by non-corporate Commonwealth entities and certain procurements conducted by prescribed corporate Commonwealth entities as listed in section 30 of the Public Governance, Performance and Accountability Rule 2014.

Division 1 of the Commonwealth Procurement Rules, excluding paragraphs [4.7, 4.8, and 7.26], contain the rules applying to all procurements regardless of their value or whether an exemption applies. Division 2 of the Commonwealth Procurement Rules contains additional rules applying to procurements valued at or above the relevant procurement thresholds.

Unless included below, the previous requirements of the Commonwealth Procurement Rules continue to apply.

This update includes the following revisions which:

  • enable Accountable Authorities to delegate the power to apply paragraph 2.6 measures and new footnote included to clarify that the Public Governance, Performance and Accountability Act 2013 (PGPA Act) continues to apply where paragraph 2.6 of the Commonwealth Procurement Rules has been applied. The footnote is in response to Recommendation 3 of Joint Committee of Public Accounts and Audit Report 498 Commitment Issues’ – An Inquiry into Commonwealth procurement (JCPAA Report 498);


  • amend the definition of procurement at paragraph 2.7, responding to Recommendation 1.a of JCPAA Report 498.
  • clarify that the Commonwealth Procurement Rules apply to officials and the roles and responsibilities of ministers throughout the procurement process. This change responds to recommendation 12.a of the Independent Review of Services Australia and NDIA Procurement and Contracting;
  • ensure consistency between the language around environmental sustainability and the revised Sustainable Procurement Guide;
  • reduce the value threshold for procurements requiring consideration of the economic benefits of the procurement;
  • increase the commitments for non-corporate Commonwealth entities sourcing goods and services from small and medium enterprises;  
  • include a new paragraph directing officials to prevent corrupt behaviour, and declares that paragraph as a relevant provision for the purposes of the Government Procurement (Judicial Review) Act 2018. This change responds to Recommendation 1 of the Australian National Audit Office’s (ANAO) performance audit report into Procurement Complaints Handling;
  • incorporates the Commonwealth Supplier Code of Conduct (Code). The Code outlines the Commonwealth’s minimum expectations of suppliers and their subcontractors while under contract with the Commonwealth. The inclusion of the Code into all Commonwealth forms of contract is mandated through this update to the Commonwealth Procurement Rules. The Code is available on the Department of Finance website.
  • clarifies the reporting thresholds at which contracts must be reported and reporting requirements for amendments to contracts. This change responds to Recommendation 6 of the ANAO performance audit report Management of the Australian War Memorial’s Development Project;
  • increases the threshold for Appendix A, Exemption 17, to allow relevant entities to directly engage small and medium enterprises for procurements valued up to $500,000;
  • includes minor changes to wording in relation to specifications, provision of information regarding an unsuccessful tender and information to be included in request documentation, to ensure Australia’s international obligations are accurately reflected. These changes are in response to Recommendation 1 of the ANAO’s performance audit report into Procurement Complaints Handling;
  • amends the definitions of ‘reporting threshold’, and ‘small and medium sized enterprises’;
  • includes new definitions for ‘amendment’ and ‘reported contracts’.

 

The Commonwealth Procurement Rules are supported by guidance available at http://www.finance.gov.au/procurement/.

 

Authority

The Commonwealth Procurement Rules are issued by the Minister for Finance under s105B(1) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). As per s105B(2) of the PGPA Act, the instrument is not subject to section 42 (disallowance) of the Legislation Act 2003. This instrument commences on 1 July 2024 and repeals the previous Commonwealth Procurement Rules 13 June 2023 (F2023L00766).

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

Commencement

The Commonwealth Procurement Rules 1 July 2024 commences on 1 July 2024.

 

Consultation

The Chief Procurement Officials Roundtable, comprising the Departments of Agriculture, Fisheries and Forestry, Employment and Workplace Relations, Defence, Health, Home Affairs, and the CSIRO, the Digital Transformation Agency, and the Murray Darling Basin Authority were consulted on the amendments.

The following entities were consulted on specific amendments:

  • the Department of Climate Change, Energy, the Environment and Water on changes to the section ‘achieving value for money’;
  • the Department of Defence on paragraph 2.6;
  • the Office of International Law in the Attorney-General’s Department regarding the Government Procurement (Judicial Review) Act 2018 paragraphs; and
  • the Australian Government Solicitor on paragraph 2.6, the small and medium enterprise definition, inclusion of the Code, and ministerial involvement in procurement.

The Department of Foreign Affairs and Trade was consulted to ensure the changes align with our international government procurement obligations.

Public consultation with, Commonwealth entities and industry has been undertaken in the development of the Commonwealth Supplier Code of Conduct.

The Minister for Finance approved the Commonwealth Procurement Rules 1 July 2024.

Updates on the changes will be provided through the Commonwealth Procurement and Contract Management Community of Practice, correspondence to Chief Financial Officers and updated guidance on the Department of Finance website to communicate the changes and assist entities.


 

ATTACHMENT A

 

Details of the Commonwealth Procurement Rules 1 July 2024

 

Section 1 - Foreword

 

This section provides information from the Finance Minister and states that the Commonwealth Procurement Rules 1 July 2024 (CPRs) is made under the section 105B(1) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and provides that the CPRs instrument commences on 1 July 2024.

 

Section 2—Procurement Framework

 

This section provides information on the procurement framework and the Commonwealth entities it applies to. This section also includes information on what is considered to be procurement for the purpose of the CPRs and additional policy, guidance and information that must be considered or complied with when procurement for the purposes of the CPRs is undertaken. A reference to Australia’s international obligations is included in this section.

 

Section 3—How to use the Commonwealth Procurement Rules   

 

This section explains which entities are covered by the CPRs and advises how officials within those entities must comply with the CPRs. It also sets out the government’s policy regarding ministerial involvement in procurement and the impact of applying an Appendix A exemption on the rules that then apply to that procurement process.

 

Division 1: Rules for all procurements

Section 4— Value for Money  

 

This section sets out the factors that comprise consideration of value for money, and the potential additional consideration of the broader benefits to the Australian Economy, depending on the estimated value of the procurement. This section also explains the requirement to apply procurement-connected policies, coordinated procurement and cooperative procurement where appropriate. Information on contract end dates and third-party procurement is also included.

 

Section 5— Encouraging competition  

 

This section establishes that the CPRs are non-discriminatory. This section also sets out the consideration an official should give regarding the potential impact on small and medium enterprises (SMEs) when establishing a procurement process and undertaking value for money considerations. This section also includes the Australian Government’s commitments to contract with SMEs.

 

Section 6— Efficient, effective, economical and ethical procurement  

 

This section sets out the Australian Governments requirement that procurements involve the proper use of public resources. It details the requirements on Commonwealth officials to act ethically throughout a procurement processes, as well as setting out the requirement to include the Supplier Code of Conduct in Commonwealth procurement contracts. It also sets out requirements for the management of procurement complaints by entities and the application of the Government Procurement (Judicial Review) Act 2018.

 

Section 7— Accountability and transparency  

 

This section explains the Australian Government’s commitment to ensuring accountability and transparency in procurement, including record keeping, providing information to the Parliament and public, treatment of confidential information and AusTender reporting.

 

Section 8— Procurement Risk  

 

This section reinforces the existing PGPA Act requirements for entities to manage risk and provides additional requirements and principles related to procurement,

 

Section/Item 9— Procurement Method  

 

This section sets out the requirement to estimate the value of a procurement, and the approach or method that must be applied in relation to the value of the procurement depending on the type of procurement being undertaken and entity type. Information regarding the use of standing offers is included in this section.

 

Division 2: Additional rules for procurements at or above the relevant procurement threshold

Section 10— Additional Rules  

 

This section sets out the additional rules for procurements that meet the thresholds set out in Section 9. These rules including the conditions required for a limited tender to be undertaken, the documentation required for approaches to market including the use of specifications, ability to modify evaluation criteria or specifications, conditions for participation, minimum timeframes for procurement processes, management and acceptance of submissions (tenders) and the awarding of contracts.

 

Appendix A: Exemptions

This section sets out that certain procurements which meet the criteria for one of the exemptions listed in this appendix are exempt from Division 2 of the CPRs, and from paragraphs 4.7, 4.8 and 7.26 of Division 1, where the exemption is applied.

 

Appendix B: Definitions

This section sets out defined terms used with the CPRs.

Overview

The Commonwealth Procurement Rules 2024, issued under the Public Governance, Performance and Accountability Act 2013, were enacted to provide a comprehensive framework for procurement processes within the Commonwealth. These rules, which came into effect on 1 July 2024, were introduced by the Minister for Finance and are designed to ensure procurement activities align with Australian government policy, enhance the competitive capability of small and medium enterprises (SMEs), and improve integrity and transparency in government procurement. The rules apply to procurement activities carried out by non-corporate Commonwealth entities and certain prescribed corporate Commonwealth entities, aiming to streamline procurement processes and incorporate international trade obligations. The revision of these rules reflects recommendations from various audits and inquiries, as well as policy objectives aimed at fostering a more competitive procurement environment and ensuring adherence to ethical procurement practices. The Commonwealth Procurement Rules 2024 also address specific concerns raised in audit findings, senate inquiry reports, and independent reviews, including recommendations from the Joint Committee of Public Accounts and Audit, the Australian National Audit Office, and the Independent Review of Services Australia and NDIA Procurement and Contracting. This update to the rules introduces changes such as enabling delegation of certain procurement powers, clarifying definitions, enhancing environmental sustainability considerations, adjusting procurement thresholds, and incorporating the Commonwealth Supplier Code of Conduct. These amendments are intended to improve the efficiency, transparency, and integrity of procurement processes across the Commonwealth, ensuring that procurement practices are fair, competitive, and in line with international obligations and government policy.

Scope and Application

The Commonwealth Procurement Rules 1 July 2024 apply to non-corporate Commonwealth entities and certain prescribed corporate Commonwealth entities, as defined in section 30 of the Public Governance, Performance and Accountability Rule 2014, when they perform duties related to procurement. These rules are designed to ensure procurement processes adhere to government policy, international trade obligations, and promote integrity, transparency, and value for money. Division 1 of the rules applies to all procurements regardless of their value or whether an exemption applies, while Division 2 contains additional rules for procurements valued at or above the relevant procurement thresholds. The rules incorporate Australia’s international trade obligations and government policy, and are written in plain English to facilitate ease of use by procurement officials. The rules are supported by guidance available on the Department of Finance website and are subject to amendment to reflect evolving policy objectives and audit findings. The Commonwealth Procurement Rules are issued under section 105B(1) of the Public Governance, Performance and Accountability Act 2013, and are not subject to disallowance under section 42 of the Legislation Act 2003. The rules commence on 1 July 2024, repealing the previous Commonwealth Procurement Rules 13 June 2024.

Key Provisions

The Commonwealth Procurement Rules 1 July 2024, issued under section 105B(1) of the Public Governance, Performance and Accountability Act 2013, provide a comprehensive framework for procurement activities within the Commonwealth. Section 2 outlines the scope of the procurement framework, detailing which Commonwealth entities are subject to the rules and the types of activities considered procurement under these rules. Section 3 explains how these rules apply to procurement officials and the role of ministers throughout the procurement process, ensuring alignment with both domestic and international obligations. Division 1 of the rules, including sections 4 through 9, sets out the foundational principles and requirements for all procurements, irrespective of their value. These sections mandate the consideration of value for money (Section 4), the promotion of competition (Section 5), and the ethical, efficient, and transparent conduct of procurement (Section 6). Section 7 further emphasises the importance of accountability and transparency in procurement processes, while Section 8 addresses the management of procurement risk. Section 9 details the methods and approaches for estimating and executing procurements, including the use of standing offers. The obligations imposed by the Act include ensuring that procurements are conducted in a manner that promotes value for money, competition, and the ethical use of public resources. Officials must act ethically and include the Commonwealth Supplier Code of Conduct in procurement contracts. Furthermore, they are required to manage procurement risks, maintain transparency, and ensure accountability through proper record-keeping and reporting. The Act also mandates that procurement processes be coordinated and cooperative where appropriate and that the procurement of goods and services from small and medium enterprises be encouraged. Additionally, officials must consider the broader economic benefits of procurement and comply with Australia's international trade obligations. Breaches of the Commonwealth Procurement Rules can result in various consequences, including civil or criminal penalties, depending on the nature and severity of the violation. For instance, intentional or reckless breaches of the rules may lead to criminal charges, with penalties including fines and imprisonment. Civil penalties may also apply for breaches that result in financial loss to the Commonwealth. The Act provides for the enforcement of these penalties through the courts, ensuring that violations are appropriately addressed. The maximum penalties for criminal offences can include substantial fines and imprisonment, reflecting the seriousness of non-compliance with procurement regulations.

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Public Governance
Procurement Law
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Regulation
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.