Purchasing Principles

What principles must government buyers follow when purchasing?

Government purchasing is based on the four principles of:

  • Value for money
  • Open and effective competition
  • Compliance with ethical standards and legislative requirements and observation of relevant codes
  • Enhancing opportunities for local business
What does value for money mean?

Value for money means getting the desired outcome at the best possible price. This does not necessarily mean choosing the cheapest price.

When assessing value for money the buyer will weigh up the benefits of the purchase against the cost of the purchase. Some of the factors that a buyer may include to assess value for money are:

Value for Money picture
What does open and effective competition mean?

Government buyers must ensure that the purchasing process is impartial, open and that competitive offers are encouraged.

Open and effective competition is achieved through:

Open Competition picture
What standards, legislative requirements and codes apply?

Government buyers must ensure that all purchasing is undertaken in a fair and unbiased way and in the best interests of the State. Certain legislative requirements, ethical standards and codes are required to be met both by buyers and suppliers. These are detailed in the Treasurer's Instructions, however, as an example, as a supplier, you can be assured that:

  • You are provided with the same information as other suppliers upon which to base your tender or quotation. You are provided with the same amount of time as other suppliers in which to prepare your tender or quotation.
  • Fair and equal consideration is given to all tenders and quotations.
  • Your dealings with the Government are kept confidential.

From a buyer's perspective:

  • Decisions must be made in the best interests of the State and must not be influenced by self-interest or personal gain.

Government buyers cannot accept gifts or any other benefits from suppliers.

  • Conflicts of interest are to be identified and dealt with.
  • Purchasing must be undertaken in accordance with the Government's Purchasing policies.

If successful in being awarded a contract, you will be required to comply with applicable legislative requirements such as workplace health and safety.

In relation to construction related procurement, suppliers may also be required to comply with various Codes including the National Code of Practice for the Construction Industry, the Tasmanian Annexure to the National Code of Practice for the Construction and the Australian Standard Code of Tendering (AS 4120-1994). Where the Australian Government provides funding to projects that meet its contribution value thresholds, compliance with the Building Code 2013 and/or the Australian Government Building and Construction OHS Accreditation Scheme may also be required.

Compliance requirements and information will be set out in the procurement documentation.

What does enhancing opportunities for local business mean?

Government buyers must ensure that local businesses that wish to do business with the Government are given the opportunity to do so and must comply with the requirements of the Buy Local Policy. Bids must be actively sought from local businesses, particularly from those businesses that have previously requested the opportunity to bid. It is important that you make yourself known to Government buyers. Follow the link to find out How to get known.

Note: enhancing opportunities for local business is not the same as giving preference to local business. Under various international free trade and cooperative agreements that bind Australia, government buyers cannot discriminate against suppliers from other states, territories, New Zealand, the United States, Chile, Japan or South Korea. Government buyers in those places must also ensure that they do not discriminate against Tasmanian suppliers or favour local suppliers.

Which government entities do these principles apply to?

These purchasing principles apply to inner-budget agencies. See Who are the Buyers for further information on the government agencies that are required to adopt these principles.


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