26/11/2025
On 17 November 2025, updates to the Commonwealth Procurement Rules (CPRs) came into effect. The updates aim to improve the competitive capability of Australian businesses participating in Commonwealth procurement.
How will the procurement process change?
There are now tighter requirements in the tendering process to encourage competition.
Non-corporate Commonwealth entities (NCEs) must only invite ‘Australian businesses’ to tender for government contracts for non-panel procurement between $10,000 and $125,000. The category of ‘Australian businesses’ is new under this update and is defined as:
- a business, including any parent business, that has 50% or more Australian ownership, or is principally traded on an Australian equities market and is an Australian resident for tax purposes; and
- is a business that has its principal place of business in Australia.
There is also a new requirement on NCEs for only Small and Medium Enterprises (SMEs), which includes Australian businesses with fewer than 200 full-time equivalent employees, to be invited to make submissions for Management Advisory Services (MAS), People, and DTA panel procurements under $125, 000.
A responsible official for the procurement may determine that approaching an Australian business or SME is not appropriate in the circumstances, but the reasons for this must be documented. Importantly, the consideration of Australian businesses and SMEs are secondary to compliance with the existing Indigenous Procurement Policy.
Another notable change is the increase of the procurement threshold from $80,000 to $125, 000. This is applicable to NCEs except in the procurement of construction services.
Does the process change for suppliers?
Suppliers are able to self-declare as an Australian Business using the Australian Business Declaration form. All businesses, regardless of whether they are members of the panel, can identify key characteristics such as whether they are considered an SME or Australian businesses using the newly launched Supplier Portal.
The process for suppliers remains the same once invitations for submissions are distributed as set out in the updated CPRs.
How do the new CPRs intersect with the new AI Plan for the APS?
The commencement of the new CPRs coincides with the Australian Government’s release of the AI Plan for the APS. The new Plan promises the addition of AI-specific guidance and clauses into the Commonwealth Contracting Suite, and the publication of guidance on the procurement of AI to help agencies meet their obligations under the CPRs and the Policy for responsible use of AI in government.
What should agencies do?
The new CPRs are currently in effect, but do not impact existing contracts. Agencies should review the rules and guidance available on the Department of Finance website and promptly update internal policies and procedures accordingly for approaches to market released from 17 November 2025.
If you have any questions or would like more information about how this may impact your organisation, contact our expert privacy and governance team to discuss further.