The 5th Edition Government Procurement Rules: What Changed and Why It Matters
On 1 December 2025, New Zealand government procurement changed more than it has in a decade. If you work with public sector clients, here's what you need to know.
The Problem
Over 900 submitters told MBIE the same thing: the procurement process was broken.
Too complex. Too slow. Actively hostile to New Zealand businesses.
Small and medium enterprises couldn't compete. The process rewarded whoever could navigate 71 rules and tolerate the most paperwork. Innovation died in documentation. Local businesses watched offshore providers win contracts they could have delivered better.
Treasury's Infrastructure Transactions Unit had a name for it: "sub-optimal public sector participation." Translation: good suppliers stopped bidding because the process wasn't worth it.
What Changed
1. They Cut the Rules by a Third
71 rules became 47. Not cosmetic. Actual simplification.
Fewer cross-references. Clearer language. Less time trying to figure out which sub-clause applies.
Does it work? We'll find out.
2. "Economic Benefit to New Zealand" Is Now Mandatory
For any procurement above $100,000 (goods/services) or $9 million (construction), agencies must assign at least 10% of evaluation weighting to economic benefit.
What counts:
- Using New Zealand businesses to deliver the contract
- Creating jobs for New Zealanders
- Training and upskilling local workforce
Below those thresholds? Award to capable local businesses unless there's a valid reason not to.
For agencies: You can't just evaluate on price and technical capability anymore. You need to build economic benefit into evaluation criteria from the start. That means asking suppliers: How many local jobs does this create? What's your training investment? Where's your supply chain based?
For suppliers: If you're New Zealand-based, this levels the playing field. You're not competing purely on who can bid lowest. You get credit for the fact that your profit stays here, your team lives here, and your work builds capability here.
Not NZ-based? You need to demonstrate genuine local value. "We'll hire locally" isn't enough. Agencies want specifics: how many people, what roles, what training, what pipeline.
3. Transparency Just Got Stronger
Agencies must make procurement policies and contract awards publicly available. Suppliers are entitled to debriefs on unsuccessful bids.
If you bid and didn't win, you deserve to know why. Was your technical approach off? Did you misread the weighting? Was there a capability gap you can fix for next time?
For agencies, this means your evaluation criteria need to be defensible. You can't award a contract and then struggle to explain the decision.
4. Te Tiriti Obligations Are Explicit
The rules now explicitly require agencies to give effect to the principles of Te Tiriti o Waitangi in all procurement.
Not new policy. Just clearer obligations.
Agencies need to consider how procurement decisions support Māori economic development, enable partnerships with Māori businesses and iwi, and contribute to equitable outcomes.
For suppliers: understand how your work connects to Te Tiriti outcomes. If you're bidding on a health IT project, how does your approach support kaupapa Māori health services? If you're delivering infrastructure, how does your supply chain create opportunities for Māori businesses?
5. Broader Outcomes Matter Now
Economic benefit is mandatory. But the rules also push agencies to consider environmental, social, and cultural outcomes.
This is a philosophical shift. Procurement isn't just about buying things anymore. It's a lever for delivering public value across multiple dimensions.
What This Means for Agencies
You Need Better Planning
Rule 11 is titled "Plan for great results." Not subtle.
Reactive procurement is over. You need a strategy. What are you buying this year? How does each procurement align to your outcomes? Where can you consolidate to reduce duplication?
The 5th Edition rewards agencies that think strategically.
You Need to Communicate Your Criteria Clearly
The 10% economic benefit weighting isn't optional. How you apply it is up to you.
Are you weighting job creation higher than training? Do you value regional suppliers differently than Auckland-based ones? Is te reo capability in your evaluation?
Whatever you decide, make it clear upfront. Suppliers can't respond to criteria they don't understand.
You Need to Justify Your Decisions
Transparency requirements mean your contract awards are public. Your debriefs are expected.
You need to be able to explain: "We chose Supplier A because they scored highest on technical capability (40%), economic benefit (15%), and cultural outcomes (10%), even though Supplier B was 5% cheaper."
If you can't explain it, your process wasn't robust enough.
What This Means for Suppliers
Tell Your Economic Benefit Story
If you're a New Zealand business, the 10% weighting is your advantage. Don't waste it.
Be specific.
Not: "We'll hire locally."
Better: "This contract will create 8 full-time roles in Wellington: 3 developers, 2 analysts, 2 project managers, 1 QA specialist. We'll recruit from local universities and provide 200 hours of on-the-job training."
Quantify your supply chain. If you're using New Zealand subcontractors, name them. If you're buying local services, explain how much.
Agencies need to justify their decision. Give them the data to do it.
Understand the Rules
At 47 rules instead of 71, you can actually read the framework in one sitting.
Do it. Understand what "broader outcomes" means. Know what Rule 9 asks agencies to consider. Read the Treaty obligations in Rule 7.
When you write your proposal, show you understand the framework the agency is working within. Reference the rules. Demonstrate how your approach aligns.
Most suppliers won't bother. You'll stand out.
Build Relationships Before the RFP
The simplified rules make it easier for agencies to engage with you early.
Don't wait for the tender to drop. Talk to agencies about their strategic challenges. Understand their outcomes. Offer insights on what's worked elsewhere.
When the RFP lands, you'll write a better response because you already understand what they're trying to achieve.
What Hasn't Changed
The Six Core Principles Are the Same
- Plan and manage for great results
- Be proportionate
- Be fair to all suppliers
- Get the right supplier
- Get the best deal for New Zealand
- Play by the rules
If you understood these before, you're still on solid ground.
Value for Money Is Still the Goal
The 10% economic benefit weighting doesn't mean agencies ignore cost or capability.
It means they balance value across multiple dimensions. A New Zealand supplier who costs 5% more but creates 10 local jobs and delivers training might represent better overall value than an offshore provider who's technically cheaper.
But if the cost difference is 40%? Or the offshore provider has demonstrably better capability? Economic benefit won't override that.
The goal is smart trade-offs, not checkbox compliance.
Relationships Still Matter
Procurement is done by people, for people. The rules create a framework, but execution depends on relationships.
Agencies: engage with your suppliers. Give them feedback. Tell them what worked and what didn't.
Suppliers: be easy to work with. Deliver what you promise. Communicate when things change.
The 5th Edition makes the process clearer. It doesn't make it automatic.
The Bigger Picture
New Zealand spends roughly $50 billion a year on government procurement. That's $50 billion that could build local businesses, create jobs, develop skills, and strengthen communities.
For too long, procurement rules made that hard. They created friction where there should have been partnership. They rewarded whoever could navigate complexity, not whoever could deliver value.
The 5th Edition won't fix everything overnight. But it's a signal: procurement should work for New Zealand, not just for the biggest bidders.
If you're an agency, this is your opportunity to procure strategically, not reactively.
If you're a supplier, this is your opportunity to compete on value, not just price.
The rules are simpler. The expectations are clearer.
What you do with it is up to you.