Legal Insights
A further update to the Commonwealth Procurement Rules
We explain the effect of recently enacted changes to the Commonwealth Procurement Rules, which commenced on 1 July 2022.
On 23 June 2022, we released an update detailing the changes to the Commonwealth Procurement Rules (CPRs) made by the then Federal Minister for Finance on 28 March 2022. As observed in our original update, these changes placed further emphasis on the engagement of small-to-medium enterprises (SMEs) in Commonwealth procurements.
On 29 June 2022, the Federal Minister for Finance, Katy Gallagher, made further updates to the CPRs. These changes took effect from 1 July 2022. Most significantly, these changes place a greater emphasis on:
- considerations of climate change in a value-for-money assessment
- the Australian Government’s commitment to sourcing goods and services from SMEs
- increasing competition in procurement processes.
What’s new?
Climate Change
The most recent updates to the CPRs modify the value for money assessment that must be undertaken by the official responsible for a procurement process. The CPRs continue to require officials to consider the environmental sustainability of the goods or services to be procured. However, the updated CPRs specifically mention the impacts of climate change as a potentially relevant factor in this assessment, in addition to environmental impacts more broadly [CPRs, r.4.5(e)].
SMEs
The updated CPRs enshrine the Australian Government’s strengthened commitment to sourcing goods and services from SMEs; now requiring that 20% of the total value of procurements undertaken by non-corporate Commonwealth entities are sourced from SMEs [CPRs, r.5.6]. This is a significant increase from the previous target of 10%.
Increased Competition
Lastly, the CPRs now recommend that officials should approach multiple potential suppliers when conducting procurements from panel arrangements [CPRs, r.9.14]. This aims to increase competitive tension in Commonwealth procurement processes and demonstrates an overarching commitment to ensuring the effective use of government resources through value-for-money procurements.
Where can I learn more?
The Department of Finance has released a table of changes detailing each change made in the recently updated CPRs.
Do you have specific questions on how these updates may affect your business or organisation? Please contact:
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