Govt Tightens Oversight as New Procurement Rules Boost Opportunities for Kiwi Firms

Minister Willis says the changes reflect the Government’s determination to support Kiwi businesses by giving them a fairer shot at work funded by taxpayers.

The Government’s newly implemented procurement rules, which came into force today, will be closely monitored through six-monthly reports to ensure full compliance and to track their impact on Kiwi businesses. Economic Growth Minister Nicola Willis says the strengthened oversight underscores the Government’s commitment to making government procurement more accessible, competitive, and beneficial for New Zealand’s economy.

The reforms overhaul long-standing procurement processes used by public agencies when awarding government contracts—an area worth more than $50 billion each year. For decades, businesses have expressed frustration at the complexity, administrative burden, and lack of recognition of local economic contributions within the old system. Minister Willis says the new framework directly addresses these concerns.

A Major Reset of Government Procurement

Under the new rules, the number of mandatory requirements for government agencies has been significantly reduced—from 71 rules down to 47. This streamlining is intended to simplify tendering procedures, lower compliance costs, and remove bureaucratic barriers that previously discouraged smaller firms from competing for government contracts.

A key feature of the reform is the introduction of a compulsory economic benefit test. Agencies must now apply a minimum 10 percent economic benefit weighting when evaluating all tender bids. This means that beyond price and technical capability, agencies will formally consider how each bid contributes to New Zealand’s broader economic wellbeing.

What Counts as an Economic Benefit?

The new test is designed to encourage bids that uplift New Zealand’s workforce and strengthen the country’s long-term economic resilience. Examples of qualifying benefits include:

• Creating new jobs or increasing workforce participation

• Offering training, apprenticeships, or professional development

• Improving wages or working conditions for New Zealand workers

• Developing local supply chains or using domestic materials

• Supporting regional economic development

Minister Willis says this shift ensures government spending actively supports national prosperity rather than focusing solely on cost. Businesses have already described the rule changes as “game-changing,” noting that the new environment creates fairer opportunities for smaller domestic firms that historically struggled to compete with large multinationals.

Boosting Growth and Capability for Kiwi Firms

Securing government contracts can be transformational for New Zealand companies, enabling them to grow, invest in staff, and expand to a scale where they can compete internationally. Many firms have argued that the previous tendering process did not acknowledge these wider benefits and placed disproportionate emphasis on cost and exhaustive paperwork.

By simplifying requirements and recognising economic value, the Government aims to create a procurement system that works better for innovation-driven businesses, regional operators, and small-to-medium enterprises.

Strong Oversight Without Compromising Trade Obligations

The new rules have been designed to remain fully compliant with New Zealand’s international trade agreements. Overseas companies are not excluded; they can still compete for government contracts and may also demonstrate economic benefit to New Zealand through partnerships, local hiring, or investment commitments.

To maintain accountability, officials at the Ministry of Business, Innovation and Employment (MBIE) will produce six-monthly reports assessing how well agencies are applying the rules. These reports will track compliance trends, measure outcomes for businesses, and help ensure the reforms deliver on their promise.

A More Competitive, Fair, and Growth-Focused System

Minister Willis says the changes reflect the Government’s determination to support Kiwi businesses by giving them a fairer shot at work funded by taxpayers. By embedding economic value into procurement decisions, simplifying tendering processes, and strengthening oversight, the Government hopes to unlock innovation, improve workforce development, and deliver long-term benefits across the economy.

As the new procurement era begins, stakeholders across the business community will be watching closely to see how the reforms translate into real-world opportunities and growth.