A key objective of the NSW Government is to improve procurement outcomes through enhanced competition, as well as facilitating access to government procurement business by the private sector, especially SMEs and regional based enterprises.

Government procurement that improves competition within markets leads to greater efficiency and encourages innovation within those markets. Greater efficiency produces tangible outcomes such as lower prices, improved quality in products, greater innovation and improved sustainability of markets. The Guidance Note, published as part of Board Direction 2012-02, outlines practices which agencies can promote competition.

The contract period is determined by the circumstances of the contract, which should generally not exceed a period of five years, including extensions. However, it is the responsibility of agency heads to determine the contract period, after considering:

the need to achieve value for money

the need to facilitate competition

the nature of the market (and changes over time, in the case of contract

renewals) nature of the goods or services being procured

nature of supplier investment such as capital

investment transitional requirements

time and cost of approaching the market

probity, risk, and transparency in approaches made to the market.