New government procurement rules major step forward

15 October

New rules for government procurement are a major step forward for the Government and the wellbeing of New Zealanders, says Metals New Zealand.

The Rules of Procurement (4th Edition) came into effect this month [October 2019] following a period of industry consultation. They mandate how government agencies should procure products and services.

Nick Collins, Chief Executive of Metals New Zealand, the pan-sector body for metals manufacturers and producers, says the new rules shift from a least-cost basis to align procurement with wellbeing outcomes.

“We congratulate the Government on the new Rules of Procurement. The focus on broader outcomes and defining public value is a significant step forward to ensure New Zealand businesses are not disadvantaged in government procurement.

“Alongside the fact that decisions will now be based on whole of life costs, rather than on least capital cost, the Government has adopted an overall holistic perspective of sustainability across economic, social, environmental and cultural outcomes.”

Mr Collins says New Zealand’s building and construction sector will gain much-needed stimulus and support in building a skilled workforce through the requirement for government agencies to include construction skills deliverables as part of contract terms.

“We very much welcome this requirement, which is pertinent for the construction sector where procurement is one of government’s key deliverables to the Construction Sector Accord,” says Mr Collins.

“However, we would encourage agencies to learn from the recent Kiwibuild debacle of a ‘one- solution-solves-all’ approach to affordable housing problems across New Zealand. New Zealand needs a region-by region needs analysis across each of our trades to ensure that we meet the current skills needs.”

Mr Collins says the metals industry also applauds the work done by the Ministry of Business Innovation and Employment in developing a robust and comprehensive tool kit of Construction Guidelines to support the procurement rules.

“We acknowledge the work of the MBIE procurement team who have taken the time to consult with the construction sector, to listen and understand the challenges which are unique to New Zealand’s building and construction sector.

“The question now is, what happens next? Where is the strategy to ensure uptake that will deliver to the Government’s agenda of broader outcomes and construction skills?

“New Zealand, and the construction sector especially needs government to work collaboratively with the sector to define outcomes, establish milestones along the way to ensure that the new rules of government procurement have the intended outcomes. And that New Zealand reaps the resulting benefits.”

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