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2.6 A Tender Process

It is important to have a clear and robust process for managing tenders. A poorly managed tender can compromise relationships with the bidders, and can leave the purchaser open to legal action on the basis of either a lack of fairness, or that the tender documents represent a contract. There are a number of steps that can be taken to minimise these risks:

  • A transparent process for dealing with tenders. This should include identifying in advance criteria that will be used to evaluate tenders, and allowing adequate time for key steps.
  • Make it clear that the lowest or any tender will not necessarily be accepted.
  • Have clear rules for dealing with late tenders, and non-conforming tenders (automatically rejecting non-conforming tenders may rule out innovative suggestions for achieving desired objectives).
  • A robust decision process, which could involve using a panel with the relevant skills. Where many of the users of the service are Maori it will be sensible to ensure that there is Maori representation. The panel needs to be constituted in such a way as to avoid any suggestion of a conflict of interest.
  • If a tender process and negotiations result in a significantly different specification to that in the original invitation to tender, it may be necessary to allow further bidding (for at least the short-listed bidders). Agencies should take legal advice in this situation.
  • Briefings for unsuccessful bidders on why their bid failed.

It is particularly important to have a way of managing the conflict of interest involved where the Government agency also delivers or may deliver the service to be purchased.

  • For more information on tender processes see Procurement: A Statement of Good Practice (Office of the Controller and Auditor General(

As part of the Government’s overarching procurement policy that seeks full and fair competition for domestic suppliers, the Government has adopted a policy of improved transparency of information on government contracts. This policy requires notification, to the Industry Capability Network (ICN), of the intended procurements of goods and services exceeding a value of $50,000 (excl. GST), and the publishing of contract award notices.

  • More information on implementing the ex-ante notification policy and the Post-Award Transparency Policy is available from the Ministry of Economic Development website (

Taking account of the exceptions in the guidance documents, Government agencies should consider if they have an obligation to notify intended procurements and/or publish contract award notices. Contracts for provision of public health, education and social welfare services are excluded from these policies.

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