The Commonwealth Procurement Rules (CPR) are the basic rule set for all Commonwealth procurements. The CPR govern the way in which Commonwealth entities including the Department of Defence undertake their own procurement processes.

Additional guidance has been developed around paragraphs 4.7 and 4.8 of the CPR, which require officials to consider the economic benefit of a procurement to the Australian economy when determining value for money.

Commonwealth entities have flexibility in the way in which they assess value for money depending on their business need and the nature and scope of the procurement. The new procurement policy guide provides further detail on how officials should identify and assess a direct economic benefit to the Australian economy as part of determining value for money.

The guide provides advice for procurement officials on how to collect information on economic benefit during a procurement activity, including a requirement to minimise excessive red tape and cost to ensure that small to medium enterprises aren’t disadvantaged.

What is a domestic economic benefit?

Generally, economic benefits to the Australian economy result when the goods or services being procured can:

  • make better use of Australian resources that would otherwise be under-utilised
  • increase productivity
  • provide broader benefits that support the development and sustainment of industry capabilities, such as enhancing key industry sectors through the Department of Defence’s Sovereign Industrial Capability Priorities

How do I find out more?

You can see the full procurement policy guide relating to consideration of broader domestic economic benefits on the Department of Finance website.