By Scott Alden, Partner and Jorden Perry, Legal Assistant

On 17 November 2025, changes to the Commonwealth Procurement Rules (2025 CPRs) will take effect, replacing the 1 July 2024 CPRs (2024 CPRs). These changes are timely and important, but arguably some could have gone further.

In addition, the Commonwealth will establish a Supplier Portal to assist relevant entities in undertaking procurements by enabling them to identify certain attributes of these business such as Australian owned, Indigenous, and whether it is a Small to Medium Enterprise. The Supplier Portal will be available to all businesses, regardless of their status as members of a panel.

2025 CPRs – Key Changes

Below we set out some of the more relevant key changes to the 2025 CPRs.

Tender Threshold

The procurement threshold that triggers an open Approach to Market (ATM) for non-construction procurements by non-corporate Commonwealth entities (NCEs) will increase from $80,000 to $125,000 (CPR 9.7(a)).

All other procurement thresholds remain unchanged.

This is the first time the thresholds have been changed in 20 years, and notably changes one category of procurement (non-construction) for NCEs only. The criteria to trigger an open approach by other governments is quite different, or higher, in some jurisdictions and this may have been a missed opportunity to fully reconsider this issue.  This consideration could have included:

• increasing the threshold further, beyond the $45,000 increase that has occurred, to bring it more in line with other government thresholds around Australia (for example $250,000);
• revising all thresholds, rather than just for non-construction procurement for NCEs;
• adopting a risk based/ business case approach to determine the procurement method rather than just the value of the procurement.

Buy Australia/ Support SMEs

CPR 5.4 requires NCEs to only invite Australian businesses to make submissions for procurements (not from a standing offer arrangement) with an expected value at or above $10,000 (GST inclusive) and below $125,000.

The requirements under the Indigenous Procurement Policy must be satisfied before an Australian business is approached (CPR 5.4(a)).

Further, NCEs are required to only invite Small to Medium Enterprises (SMEs) for Management Advisory Services (MAS), People and DTA Panel procurements under the threshold amount (CPR 5.5). Again, the Indigenous Procurement Policy must be applied where relevant. This change will provide Australian businesses, including SMEs, priority access to around 31,000 contracts per annum, with a value of almost $2 billion.

For these ‘Buy Australia/ Support SMEs’ changes:

• where there are no submissions, or the submissions received do not demonstrate Value For Money (VFM), a standard procurement method may be used; and
• the responsible official may determine that it is not appropriate, in which case such determination must be documented.

Whilst the ‘Buy Australia’ changes may appear to be at odds with Australia’s international obligations, particularly international free-trade agreements, the CPRs confirm that these are implemented domestically by legislation and/ or Commonwealth policy, and that relevant obligations have been incorporated into the CPRs (CPR 2.15 and 4.8).

Definition of Value for Money and Ethical considerations

Value for money is the core rule of the CPRs (CPR 4.4 to 4.6). Continuing the focus on ethical conduct of suppliers (see for example the recently implemented Supplier Code of Conduct obligations and policy) the new CPRs have added evidence of ethical conduct as a factor when assessing Value for Money. It remains to be seen how this is implemented in a procurement process in terms of obtaining from suppliers evidence of ethical conduct (or absence thereof), such that it can be included and properly assessed.

Negotiations

CPR 10.6(e) requires ATM documentation to include the relevant entity’s intention to conduct negotiations (where relevant).

CPRs 10.18 and 10.19 provide further rules around when negotiations may be undertaken, and how to conduct them in terms of elimination of participating tenderers (where relevant). 

General

In addition to the changes above, the CPRs also contain a number of general clarification amendments, which include:

• CPR 3.7 clarifies that dollar values include GST. This is something that was often asked of procurement or probity officers and which has now been clarified.
• CPR 9.14 makes it clear that approaches using a standing offer should include more than one supplier. This clarification is necessary and timely given that procurement officers have, until now, remained uncertain as to whether they should invite more than one supplier from Standing Offer arrangements.  This is the case despite previous Department of Finance and ANAO commentary and advice in this regard.
• CPR 10.9 makes it clear that specifications or conformance procedures must not be for the purpose or effect of creating unnecessary obstacles to trade. This will be an important amendment in light of some procurements being subject to criticism for such practices, and officials will need to be particularly vigilant in this regard going forward so as not to breach, or be accused of breaching, the CPRs which may lead to a Government Procurement (Judicial Review) Act 2018 (Cth) (GP(JR) Act) complaint.

Guidance Material

The Department of Finance has prepared guidance documents relating to the new CPRs to assist with understanding and compliance.  The guidance material currently includes:

• Which CPRs apply to my procurement;
• Guidance on the definition of an Australian or New Zealand businesses ;
• Consideration of Australian business for procuring entities ;
• Contract negotiations ; and
• Application and verification of standards.

Next Steps

How the new CPRs will affect your procurement

It will be important to identify which CPRs apply to your procurement. This will depend on the date the ATM is released.

If the incorrect CPRs are applied to a procurement, it may lead to a breach of the applicable CPR and subsequent action under the GP(JR) Act.

Relevant Commonwealth entities should continue to be diligent in understanding and implementing the new requirements of the 17 November 2025 CPRs. In particular entities:

• will need to be able to understand where and how to apply the Buy Australia/ Support SME obligations – the new Portal will assist with this;
• how to bring a supplier’s ethical conduct into the consideration of value for money – consideration of tender schedules and updates to evaluation plans and methodologies will be necessary to achieve this; and
• how to properly conduct negotiations in order to be compliant with the new requirements – the guidance material developed by Finance will assist in this regard.

Mills Oakley

This article highlighted the key changes to the Commonwealth Procurement Rules, coming into effect 17 November 2025. Understanding these changes are essential to a viable procurement, whether as a Commonwealth Government entity, or a supplier.

At Mills Oakley, we have extensive experience working in the Government procurement space. Namely, Scott Alden, Partner specialises in Government and Commercial Law with a specific focus on probity and procurement. With over 30 years’ experience, Scott Alden specialises as a legal advisor on significant project and procurements for Federal, State, Local Governments and private corporations.

If you would like more information about the changes to the CPRs and how it applies specifically to your procurement policies and procedures, please do not hesitate to contact us.