Principles, rules and the law

Government procurement is based on Principles, the Mandatory Rules of Procurement (where they apply) and good practice guidance. Collectively these provide a broad framework that supports accountability, sound practice and successful procurement results.

Procurement Principles

A refreshed statement of Principles of government procurement has been approved by Cabinet in July 2012 [Sec Min (12) 10/5]. The aim is to provide a plain English statement of Principles that is easier for both agencies and suppliers to understand and apply. It is essential that all government agencies take the Principles into account when buying goods and services. The new statement of Principles is as follows.

• View a more detailed explanation of the Principles [153 KB PDF]

The new statement of Principles forms the foundations of good procurement practice. 

There is an expectation that the new Principles will be reflected in how agencies plan and manage their procurements and achieve best value-for-money results.

The Government Rules of Sourcing

The Government Rules of Sourcing (the Rules) [1.1 MB PDF] represent the government’s standards of good practice for procurement planning, approaching the market and contracting. They come into effect from 1 October 2013.

• New Government Rules of Sourcing key messages [229 KB PDF]

Mandatory Rules for Procurement

Public Service departments, New Zealand Police and New Zealand Defence Force are subject to the Mandatory Rules of Procurement for Departments [88 KB PDF]. These Rules set out minimum requirements for certain types of procurements and must be followed.

The Rules replace the Mandatory Rules for Procurement by Departments. Cabinet has endorsed the Rules (CAB Min (13) 10/4A) and they come into effect from 1 October 2013.

Government procurement requirements

The Government, through a series of Cabinet Directives, has set specific requirements that apply to certain types of procurements. These requirements must be followed by agencies that are subject to Cabinet direction.

On this website

• Principles of Government Procurement in New Zealand – [475 KB PDF]
• Sustainable Government Procurement Project: Category reviews [470 KB PDF] 

On other websites

SSC: Cabinet Guidelines for IP from Public Service research contracts

MAF: NZ Timber & Wood Products Procurement Policy

SSC: Gateway Review Process (for high risk capital projects)

DOL: Principles for the Property Services Industry

Treasury: Guidance for Public Private Partnership (Cabinet approvals for large capital projects)

DPMC: Capital Asset Management – Expectations

Treasury: Better Business Cases for Capital Proposals

LINZ: Capturing economic benefits from location-based information

Statutes related to contracting

In addition to policy and rules, anyone involved in procurement must be aware of relevant statutes that relate to contracting, as well as the common law of contracts. Key statutes include:

Sale of Goods Act 1908 

Frustrated Contracts Act 1944

Public Bodies Contracts Act 1959

Minors' Contracts Act 1969

Illegal Contracts Act 1970

Contracts (Privity) Act 1982

Contractual Mistakes Act 1977

Contractual Remedies Act 1979

Sale of Goods (UN Convention) Act 1994

Construction Contracts Act 2002 

Archived material

The Principles for Procurement are derived from the previous Principles found in Government Procurement in New Zealand: Policy Guide for Purchasers - August 2007 [133 KB PDF] and are consistent with the basic principles that govern all public spending. The new statement of Principles came into effect from 1 October 2012.