Commonwealth Procurement Rules 2025: What's Changed From 17 November 2025
The current Commonwealth Procurement Rules effective 17 November 2025, including the $125,000 threshold, ethics rules and value for money obligations.
Status and scope of the 2025 CPRs
The Commonwealth Procurement Rules 2025 commenced on 17 November 2025, superseding the previous edition from 1 July 2024. These rules are made under section 105B of the Public Governance, Performance and Accountability Act 2013 and are published by the Department of Finance. They are registered on the Federal Register of Legislation.
The CPRs apply to all non-corporate Commonwealth entities (NCEs) and a selection of corporate Commonwealth entities (CCEs), details of which are outlined in Appendix A. Entities must adhere to the rules when undertaking procurement activities. Consideration of Indigenous Procurement Policy is a key component of procurement.
The fundamental principle underpinning the 2025 CPRs is achieving value for money in all procurement processes. This principle guides entities in their decision-making and ensures responsible use of public funds.
Division 1: Rules for all procurements
Division 1 outlines rules applicable to all procurements, irrespective of their value. These rules cover key principles including achieving value for money, maintaining ethical conduct, encouraging competition amongst potential suppliers, and ensuring efficient procurement processes. The rules are designed to be foundational for all procurement activities undertaken by Commonwealth entities.
A significant change from prior arrangements is the relocation of ethical conduct provisions to Division 1. This means that ethical considerations now apply to every procurement, not just those exceeding a specific threshold. Officials are required to consider the ethical conduct of potential suppliers as part of their assessment of value for money.
Furthermore, Division 1 mandates that procurement risk must be considered and actively managed across all procurement values. Non-discrimination obligations also apply, ensuring compliance with Australia’s international procurement commitments.
Division 2: Additional rules above the threshold
Division 2 of the Commonwealth Procurement Rules 2025 applies to procurements at or above the relevant procurement threshold. This division outlines additional rules governing the procurement process. The non-construction procurement threshold for non-corporate entities (NCEs) increased to $125,000 from 17 November 2025, up from the previous threshold of $80,000. The construction procurement threshold remains at $7.5 million.
Division 2 addresses several key areas of procurement, including approach to market procedures, evaluation processes, conditions applied to contracts, and complaints handling. These rules are designed to ensure fairness, transparency, and value for money in government procurement activities.
A key principle within Division 2 is that open tender is the default method for approaching the market. Limited tender processes are only permitted where specific exemption grounds are met.
SME and Australian business prioritisation
The Commonwealth Procurement Rules 2025 introduce specific requirements regarding the prioritisation of Australian businesses and Small and Medium Enterprises (SMEs). For non-panel procurements below a certain threshold, only Australian businesses can be invited to tender. This measure aims to support local industry participation in government procurement activities. Tendering submissions and confidential information may be shared within the Commonwealth for compliance monitoring purposes.
For Management Advisory Services (MAS), People and DTA panel procurements valued under $125,000, invitations to tender are restricted to SMEs. This prioritisation is intended to foster opportunities for smaller businesses to engage with the Commonwealth. Connected entity provisions ensure these rules extend across procurement chains.
It is important to note that other relevant policies also operate alongside the CPRs. These include the Indigenous Procurement Policy and AusIndustry SME targets, which continue to guide procurement decisions. Businesses should also be aware of their obligations regarding foreign bribery offence under the Criminal Code.
Frequently asked
Do the CPRs apply to corporate Commonwealth entities (CCEs)?
Only those CCEs listed in Appendix A of the CPRs (prescribed by the Finance Minister) are required to comply. Most CCEs are not subject to the CPRs, although they may voluntarily apply them.
What happens if an official fails to comply with the CPRs?
Non-compliance can result in administrative action, including referral to the entity's accountable authority. Officials have a statutory duty under the PGPA Act to comply with the CPRs, and breaches can expose them to disciplinary action.