I'll be honest, I never thought I'd be spending Sunday writing a blog post about procurement rules with something approaching genuine enthusiasm. But here we are, and something interesting did just happen at the intersection between New Zealand's new Government Procurement Rules (which came into effect 1 December 2025) and last September’s cabinet paper on "Driving down the cost of digital in government."
Because, late last November we were shoulder tapped to participate in a procurement process which was likely one of the earlier test drives of this new procurement approach. And despite being the bridesmaids (by a whisker), I'm actually optimistic about where this could be heading.
The Old Way: Over-Engineering Government Software Procurement
Here's the thing key that's always frustrated me about government procurement: agencies have historically over-designed solutions before they even talk to suppliers. They specify exactly what they think they need, down to minute technical details, then go looking for people who can bear to strip apart multiple pages of Functional and Non Functional Requirements at exhaustive length to demonstrate that they can build that exact thing right back to them.
But software projects aren't like building a bridge where you can spec everything upfront. They're contextual, nuanced, iterative. I genuinely believe that the very best outcomes will flow to those from organisations willing to test suppliers' mindset, creativity (sure and capability) to solve problems, not merely their ability to regurgitate a pre-determined solution.
What’s Changing in the Government Procurement Rules (And Why It Matters)
The new Government Procurement Rules (December ’25) introduce several shifts that address these pain points:
1. "Right-sizing" as Formal Procurement Principle
There's now an explicit procurement principle requiring agencies to right-size their approach. I’ve often wondered if there’s fear, agency side, that you might not be complying with the rules, and with that fear an over-reliance on the familiar, heavy handed approach. Now we’ve got policy settings recognising there is an opportunity to be more efficient, to reduce time and cost (while still being fair), which should genuinely make it easier to do business with government. This isn't just aspirational language; it's baked into the rules. The recent procurement process we went through was not for a massive project, and the structure of the process was fairly sized for the size of the opportunity.
2. Smarter Use of Government Procurement Panels
The rules now require competitive secondary procurement processes from panels (unless there's good reason not to). Translation: instead of massive, open-market RFPs every time (oh dear god, the noise of Q&A in those processes!), agencies can confidently run shorter, more targeted competitions among pre-qualified suppliers. I think of this as casting the net appropriately wide without wasting everyone's time.
3. Economic Benefit to New Zealand in Public Sector Procurement
The new rules replace the vague "broader outcomes" concept with a prescriptive requirement to deliver economic benefits to New Zealand—with a minimum 10% weighting. This includes things like using NZ businesses, developing local capability, creating export opportunities, and adopting innovative practices.
Meanwhile, the cabinet paper on digital government takes this concept further, proposing to centralise digital investment and procurement decision-making within the Government Chief Digital Officer (GCDO). The goal? Stop duplicating effort (29 agencies spending $1.78B on similar service delivery systems!), encourage reusable solutions, and favor smaller, iterative projects over massive multi-year programs. If this vision comes to fruition within the framing of the new procurement rules… that could genuinely be exciting.
What This Procurement Process Looked Like in Practice
We recently participated in a procurement process for a high profile Government agency needing to undertake a significant re-fresh project. It wasn’t a huge opportunity, but it was interesting & challenging work and right in the capability sweet spot of one of our teams. Excitingly for me, it was an early test drive of the new rules and a new approach to bringing delivery and procurement teams into the room together.
Here's what was different (and genuinely better):
Verbal Pitch with Slide Deck Instead of a Traditional Written RFP
We presented live via a Teams call, had actual conversations, and could read the room. Aside from an audio-issue agency side which made hearing their Q&A impossible (*head in hands*), this actually reflects and tests how so much of our work is done. Our presentation "set the standard for the day" (their words, and I'll take it). This format tested our thinking and communication, not just our ability to write comprehensive documentation. Or our ability to ask our fav-LLM of the day to do so on our behalf eh 😉
A Procurement Process Right-Sized to the Value of the Opportunity
This wasn't a six-month procurement marathon for a relatively straightforward web project. It was appropriately scoped, moved quickly, and didn't waste dozens of hours across multiple supplier teams.
We have a standing internal joke that agencies will set a comprehensive timetable at the outset of a procurement process… and the only dates that are “hard” are those before RFP submission. From the day those files get uploaded to GETs… the timelines slip, sometimes by months. Now, I have no doubt that this is partly because of the processing-impact of receiving potentially hundreds of responses, some of which may well run to hundreds of pages each and needing to review, grade and respond to them.
Do I hear you cry “Oh The Waste”? because I sure have shed a tear over this issue. On both sides of the procurement fence the waste has been scary. Right sizing the effort is a healthy thing for all participants.
Effective Secondary Panel Usage in Government Procurement
This agency also used a secondary procurement panel to ensure they were considering capable suppliers without starting from scratch with a full open tender. Huzzah. We’re super-well qualified for this work, it was very, very nice not to need to re-answer these questions. Because we were already pre-qualified; the competition focused on fit for this specific project. A much better way to select the right partner.
A Meaningful and Transparent Procurement Debrief
This is where things got really interesting. The debrief wasn't perfunctory. It wasn’t a half page letter with some vague bullet-points. it was genuinely useful. They told us:
- We were narrowly second (genuinely marginal difference)
- They showed us their scoring – and their ranges so we could see exactly where we hadn’t gone quite deep enough in our response.
- They told us our pitch was well-structured, demonstrated strong understanding, and our methodology was spot-on. That’s reassuring and specific enough to commend the colleagues who crafted those parts of our response.
- We also learned where our pricing landed (compared with the winner). This is golden! There are always so many assumptions and grey-areas in scoping a pricing a delivery like this (where you are flying blind on the state of the current code-base). Helping to navigate risk-aversion from your lead engineers who want to scope effort accurately and set realistic expectations- while pricing competitively, that is an art form. Specific feedback in this space helps you to recalibrate for next time and make more informed choices about the level of risk/ certainty you are putting forward.
- Areas for improvement: perceived depth of resourcing & concerns about our capacity to start immediately given what we had in flight. While we had confidence, we needed to impart that confidence more clearly.
The Question That Signals a Shift in Government-Supplier Relationships
After the pitch, they asked (in writing): "What else might we have missed, or what would you recommend for this project to be successful?". We had a couple of days to fire them back some ideas plus indicative pricing.
Seriously, I have been begging for agencies to get to this place for so long. This question, this willingness to admit they might not have thought of everything, this openness to supplier expertise is exactly the mindset shift these reforms need to support. So much value gets left on the table when you think in a linear fashion (“how much will it cost you to build this system we have designed”). Instead, ask us what we recommend, where we see the risks and opportunities. As long-term suppliers to government we’re more than happy to help share our ideas.
The Reality Check
Let me be clear: we didn't win.
We potentially also penalised ourselves by being transparent about our capacity and resourcing approach. While I’d argue our competitors are unlikely to genuinely have had huge depth of availability and capacity within a month or two’s notice … that perhaps is a place I need to learn to be less circumspect when we’re pitching.
Why I’m Optimistic About the Future
Despite not winning, this experience has me genuinely hopeful because:
- The process respected our time - We weren't asked to spend weeks crafting a 100-page response for a project that could be assessed through conversation.
- They tested for the right things - Creativity, capability, mindset, problem-solving approach. Not just our ability to repeat their specifications back to them.
- The debrief was honest and constructive - We learned specific, actionable things we can improve. We got reassurance about our standing as a preferred vendor. This is how you build a functional supplier ecosystem.
- The follow-up question mattered - Testing for lack of ego and willingness to challenge their assumptions? That's the kind of supplier relationship that leads to better outcomes.
* Special shout out: this agency didn’t just bring 7 or 8 internal digital stakeholders into the pitch, they had senior procurement support right there too. This is how you support your teams to run healthy right-sized procurement with confidence in a new landscape.
What Government Procurement Reform Could Mean for the NZ Tech Sector
If these reforms play out as intended (and that's a big if) we could see:
More opportunities for smaller, specialised suppliers – or partnerships between them.
Shorter procurement cycles, smaller project chunks, and panel-based approaches mean smaller organisations wouldn’t be automatically excluded because we can't staff a five-year program. It also de-risks the deliveries themselves.
Less wasted effort. Both for suppliers (responding to better-scoped RFPs) and agencies (not reinventing wheels that already exist elsewhere in government).
Better deliveries. Iterative, prototype-first approaches that de-risk investment and let solutions evolve with actual user feedback.
Actual innovation. when you're not locked into delivering against a spec written in 2022, you can actually take advantage of new technologies and approaches.
The Bottom Line on “Right-Sized” Government Procurement
For the first time in my experience, government procurement rules and digital policy are pulling in the same direction: toward smaller, faster, more collaborative approaches that respect both supplier and agency resources.
We didn't win this one. But the process itself felt like progress, and that's not something I've been able to say often in this space.
If this is what "right-sized" procurement looks like in practice, bring it on.
