Strategy, Governance and Risk
Posted on 5th November 2025
The new Commonwealth Procurement Rules (CPRs) take effect for new procurements from 17 November 2025.
These updates represent one of the most significant reforms to Commonwealth procurement in decades. They introduce higher thresholds, a stronger emphasis on ethical conduct by suppliers, rules to encourage greater participation by Australian businesses and small to medium enterprises in Commonwealth procurements, and clearer rules for negotiation.
For corporate and non-corporate Commonwealth entities, the countdown is on. Achieving compliance and maintaining operational efficiency under the new framework will require you to update your procurement policies, processes, templates and training.
Key Changes You Need to Be Ready For
1. Ethical conduct now part of Value for Money
For the first time, ethical conduct is a formal Value for Money (VFM) consideration (paragraph 4.5(c)). Ethical procurement provisions have also been elevated to Division 1 (paragraph 6.6), meaning they apply to all procurements, regardless of value. This change underscores the Commonwealth’s intent to ensure decisions reflect not only commercial and technical merit, but also ethical behaviour.
2. Higher procurement thresholds
The Division 2 threshold has increased from $80,000 to $125,000 for non-corporate Commonwealth entities (paragraph 9.7) and some corporate Commonwealth entities — the first rise in 20 years. While Division 1 continues to apply universally, the shift offers greater flexibility for lower-value procurements, provided frameworks and templates are updated accordingly.
3. Clearer rules for negotiation
From 17 November, negotiations will only be permitted if:
When negotiations occur, all remaining tenderers must be given a common deadline for revised submissions (paragraphs 10.18–10.19). These procedural changes demand prompt updates to procurement policies and training.
4. Prioritising Australian businesses
Non-corporate Commonwealth entities must invite only Australian businesses to tender for procurements between:
This aligns with the Commonwealth’s commitment to support local industry, subject to compliance with the Indigenous Procurement Policy (IPP) and certain exceptions.
5. Preferencing SMEs for panel procurements
For procurements under $125,000 from the Management Advisory Services Panel, People Panel, or Digital Transformation Agency (DTA) standing offers, entities must invite only SMEs to tender (paragraph 5.5). This adjustment further strengthens pathways for small businesses to participate in Commonwealth procurement.
Don’t Wait – Plan Your Transition Now
The revised CPRs will apply to new approaches to market released on or after 17 November 2025. To ensure a seamless transition, entities should take proactive steps now to:
Suppliers should also act early to demonstrate ethical conduct and align their tendering strategies with the new VFM expectations. For Australian businesses and SMEs, the reforms represent an expanded opportunity to partner with government — but readiness will determine success.
How We Can Help
At Sententia Consulting, we work with Commonwealth entities and suppliers to manage policy change with precision and purpose. Our Strategy, Governance and Risk advisory team helps clients translate regulatory requirements into practical action — ensuring compliance, efficiency, and confidence across procurement operations.
We can support your organisation to:
Contact us today to discuss how our advisory team can help you prepare for the new Commonwealth Procurement Rules.
Our team of experts will work closely with you to deeply understand your challenges and find how we can leave you feeling protected, or better equipped to drive change, and impact society.
