Back to basics: understanding local government procurement regulations

By Joshua Brown, General Counsel & Compliance Manager

Procurement in local government is a core and critical function that ensures that public funds are spent efficiently, ethically and in the public interest.

Local Buy provides compliant Arrangements for councils to achieve legislative compliance easily. However, it is crucial for procurement professionals to holistically grasp local government regulations to ensure comprehensive compliance and understand best practices.

This article provides a high-level summary of the Default Contracting Procedures (DCP) outlined in the Local Government Regulations 2012 (Qld) (the Regulations). We plan to provide an overview of the Strategic Contracting Procedures in a forthcoming article.

LEGISLATIVE FRAMEWORK

The procurement process is primarily set out specifically in the Local Government Regulations 2012 (Qld) (the Regulations), with the overarching principles of Queensland local government operations set out in the Local Government Act 2009 (Qld) (the Act)

The following is an overview of key sections of the Act and Regulations that local government procurement professionals should familiarise themselves with regarding the Default Contracting Procedures (DCP):

FIVE SOUND CONTRACTING PRINCIPLES:

The five sound contracting principles, outlined in the Local Government Act 2009 (Qld) Section 104(3)   are the cornerstone of local government procurement. These are (in no particular order of importance):

1. value for money; and

2. open and effective competition; and

3. the development of competitive local business and industry; and

4. environmental protection; and

5. ethical behaviour and fair dealing.

The five sound contracting principles are essential for ensuring local government procurement is fair, efficient, and aligned with community expectations. These principles should guide all procurement activities, whether using default or strategic contracting procedures as they promote the responsible use of public funds by fostering transparency and accountability, helping to maintain public trust.

DEFAULT CONTRACTING PROCEDURE | PROCUREMENT RULES:

Unless council adopt the strategic contracting procedures, it will be bound by the default contracting procedures outlined in the Regulations. Most councils are subject to these default contracting procedures.

The Regulations stipulate two specific types of contracts that attract default procurement rules. As a base line, all procurement professionals should understand what these two contract classifications are:

1. ‘Medium Sized Contracts’ means a contracts for goods and services that are greater than $15,000 AUD but less than $200,000 AUD. Before awarding a Medium Sized Contract, a local government must obtain at least three written quotes (unless an exception applies).
2. ‘Large Sized Contracts’ means a contracts for goods and services that are greater than $200,000 AUD. Before awarding a Large Size Contract, a local government must invite written tenders in accordance with the Local Government Regulation 2012 (Qld) section 228 (unless an exception applies). 

DID YOU KNOW:

The expected value of a supplier contract includes the total value of all contracts for similar goods or services with that supplier during the financial year or the full term of the arrangement (as per Local Government Regulation 2012 (Qld), section 224(4)).

Local governments must account for all related contracts with a supplier to ensure accurate spending estimates and compliance with procurement regulations.

EXCEPTIONS TO THE DEFAULT CONTRACTING PROCEDURES

Local governments may benefit from exceptions to default procurement rules, allowing greater flexibility and efficiency while upholding the five sound contracting principles.

Local Buy Exception
As a wholly owned subsidiary of the LGAQ, Local Buy is authorised under the Regulations to establish what is referred to as “LGA Arrangements” (Regulations s 234).

Local Buy Arrangements provide an exception to the Default Contracting Procedures under the Regulations, streamlining procurement for both councils and suppliers. These legislatively compliant Arrangements allow councils to procure goods and services through a simplified quotation process instead of lengthy tenders, saving time and money.

With over 52 Arrangements and more than 4,000+ pre-qualified suppliers, councils can bypass default procedures while maintaining transparency and efficiency.

More details are available here.

Quote/Tender Consideration Plan
Councils can bypass default rules if they prepare a comprehensive quote or tender consideration plan outlining objectives, measures, risks, and proposed contract terms (amongst other things).

Pre-Approved Supplier Lists
Local governments may establish and use approved contractor lists, preferred supplier Arrangements, or pre-qualified supplier registers for defined services, exempting them from standard procedures.

Other Exceptions
Councils can skip default rules for contracts in cases such as sole supplier availability, emergency situations, second-hand goods, auctions, or Arrangements with government agencies.

These exceptions ensure procurement remains adaptable while maintaining governance standards.

CONCLUSION

Understanding local government procurement regulations is essential for ensuring that public funds are utilised efficiently, ethically, and transparently.

Joshua Brown – General Counsel & Compliance Manager
Email: jbrown@localbuy.net.au, Mobile: 0438 282 729

 Reference:

     https://www.legislation.qld.gov.au/view/html/inforce/current/act-2009-017
     https://www.legislation.qld.gov.au/view/html/inforce/current/sl-2012-0236