| Status |
Mandatory for NCE procurements valued at $4 million or more (including Goods and Services Tax (GST)) for all goods and/or services, including for construction services. CCEs and Commonwealth companies are encouraged to apply the policy. |
|---|---|
| Source | |
| Legislation / Policy | |
| Legislation / Policy contact | |
| Additional information |
Commonwealth Government Procurement Connected Policies information available at: https://www.finance.gov.au/government/procurement/buying-australian-government/procurement-connected-policies |
As part of the 2018-19 Budget and in response to the Black Economy Taskforce’s Final Report, the Government announced a range of measures including the Black Economy Procurement Connected Policy - Increasing the Integrity of Government Procurement.
In August 2022 the title of the 'Black Economy Procurement Connected Policy’ was revised to the 'Shadow Economy Procurement Connected Policy’.
This Policy outlines the key components of the Commonwealth Government’s policy to increase the integrity of government procurement.
The policy originally commenced on 1 July 2019 and was revised on 1 October 2024. The revised policy applies to new and existing approaches to market which close on or after 1 October 2024, for procurements valued at $4 million or more (including Goods and Services Tax (GST)) for all goods and/or services, including for construction services. This policy does not require Commonwealth entities to amend existing contracts or deeds of standing offer that are in place prior to this policy’s commencement date.
All non-corporate Commonwealth entities must comply with the policy when approaching the market to establish new contracts, and to create Standing Offer (panel) arrangements at $4 million or more (including GST) as well as ensuring STRs remain valid and satisfactory during the contracting and contract management phases of the procurement.
Procurement entities subject to the policy must not contract with any Supplier who does not hold all valid and satisfactory STRs required.
The Shadow Economy Model Clauses are available at https://treasury.gov.au/policy-topics/economy/shadow-economy/procurement-connected-policy
Standardisation of contractual text results in efficiencies for both Parties to a contract. Before deciding whether a particular clause is appropriate, procurement officials should carefully consider the context of their procurement.
Clause wording would generally need to be changed where Commonwealth entities need to adapt the clauses to fit into their contracting templates, but the clause wording must comply with this PCP.
Some terminology may need to be changed to align with other Contract terminology.
Commonwealth entities subject to the policy may be approached by the Department of the Treasury for information to help evaluate the performance of the policy.
If an NCE included a clause that required tenderers to maintain a satisfactory STR over the term of the contract, after contract signature, contract managers are required to review the status of tenderers STRs. Contract managers may choose to check STRs for first tier sub-contractors held by the head contractor during the course of the contract.
