The Australian Federal Government has announced amendments to the Commonwealth Procurement Rules (CPRs), reflecting a greater focus on prioritising Australian businesses.
For the first time in 20 years, the Government has increased the non-construction threshold for open tendering, raising this figure from $80,000 to $125,000, which means more contracts can be approached.
The changes – which will take effect from 17 November – will see Australian businesses exclusively invited to tender for non-construction contracts under the new threshold. For construction-based contracts, this extends to those valued below $7.5 million. The Indigenous Procurement Policy must still be applied, where relevant.
If local Australian firms fail to bid for work or if their terms are deemed not commercially reasonable, international companies may still be able to secure work that falls below the new $125,000 threshold.
These significant amendments mean Australian businesses will now be at the front of the queue for around 31,000 government contracts, valued at around $2 billion.
Ethics, integrity and value for money also climb further up the agenda, with an emphasis on First Nations businesses, women-owned businesses and small and medium enterprises (SMEs) through changes to the AusTender system.
SMEs alone will be invited to tender for Management Advisory Services (MAS), People Panel and Digital Transformation Agency procurements under $125,000.
Additionally, the Government’s new Supplier Portal will give suppliers the ability to control their own information, allowing them to state their business type and key characteristics. This will roll out gradually from October 2025, with full access expected by July 2026.
The updated rules explicitly include ethical conduct as part of the “value for money” assessment, and require scrutiny of supplier behaviour including labour standards, environmental impact and potential modern-slavery risks, regardless of contract value.
There are also new rules relating to when and how negotiations can be conducted for procurements that go over the relevant thresholds.
Senator Katy Gallagher, Minister for Finance, said the updated CPRs are about making sure more of the Commonwealth’s purchasing power flows directly to Australian businesses, creating local jobs and supporting the Australian economy.
“For the first time in more than two decades, we’re raising the tender threshold and prioritising Australian suppliers. That means small and medium enterprises will have better access to government contracts worth billions of dollars each year,” she said.
“The new Supplier Portal will also make it easier for businesses to put themselves forward, giving them more visibility and more opportunities. It’s a practical reform that will help level the playing field, including for First Nations businesses, SMEs and women-owned businesses.
“This is a big change in the way government does business, it’s about backing Australian capability and making sure taxpayer dollars support Australian jobs.”
Earlier this year, the Federal Government announced its definition of an Australian business, for use within the context of the Commonwealth procurement framework.
Businesses must meet three specific criteria to be considered an Australian business, showing they have 50 percent or more Australian ownership, or are principally traded on an Australian equities market.
They must also prove Australian tax residency and have their principal place of business recorded in Australia.
