The New South Wales (NSW) Government has a strong approach to ensuring state government contracts provide social procurement opportunities as part of procurement requirements. The government use public sector purchasing power to create employment opportunities, support Aboriginal businesses and deliver broader economic and social benefits across the state. The updated NSW Procurement Policy Framework 2024, released in December 2024, reinforces the role procurement plays in delivering outcomes that extend beyond the purchase of goods and services.
The NSW framework is built around five key objectives:
- Value for money
- Fair and open competition
- Easy to do business
- Innovation
- Economic development, social outcomes and sustainability
Of these, Objective 5: Economic Development, Social Outcomes and Sustainability provides the strongest direction for agencies to use procurement as a lever for positive social impact. It encourages government buyers to consider how purchasing decisions can support economic participation, workforce development, and sustainability outcomes across New South Wales.
Who Benefits under Objective 5
NSW continues to embed social procurement into government contracting by encouraging agencies to engage organisations that create social value, including:
- Social enterprises
- Aboriginal businesses
- Australian Disability Enterprises (ADEs)
These organisations play an important role in creating employment and economic opportunities for disadvantaged and underrepresented groups while strengthening local communities. The framework also places greater emphasis on workforce development. Suppliers are increasingly expected to demonstrate how contracts will contribute to skills development and employment pathways through:
- Apprenticeships
- Traineeships
- Learning worker opportunities
- Local employment initiatives
Stronger reporting requirements have also been introduced to improve transparency and accountability, ensuring suppliers can demonstrate the outcomes delivered throughout the life of a contract.
Major Construction Projects Face Strong Participation Targets
For major construction contracts, suppliers must meet a range of workforce participation and training requirements designed to address skills shortages and improve diversity across the sector.
For major construction projects over $100 million, suppliers are requirements are:
• 20% of the total labour force to be learning workers
• 20% of the total labour force to be apprentices
• double the number of women in trade-related work (up from the NSW average of 1% to 2%)
• 8% of total project workforce to be aged less than 25 years
• Report the employment and training outcomes for people from the local region (as defined in the contract).
These targets recognise that major government infrastructure investments can be a powerful driver of workforce development while creating opportunities for groups that have traditionally been underrepresented in construction and trades.
Aboriginal Procurement Policy Continues to Drive Participation
A key component of NSW’s social procurement strategy is the Aboriginal Procurement Policy 2021, which establishes minimum Aboriginal participation requirements for government contracts.
For contracts valued at $7.5 million or more, agencies must include Aboriginal participation requirements of at least 1.5% through one or a combination of the following:
- At least 1.5% of the contract value subcontracted to Aboriginal businesses
- At least 1.5% of the contract workforce (FTE) directly contributing to the contract being Aboriginal or Torres Strait Islander peoples
- At least 1.5% of the contract value invested in education, training or capability-building initiatives for Aboriginal workers or businesses involved in the contract
This flexible approach enables suppliers to tailor their participation strategies while still delivering meaningful outcomes for Aboriginal communities.
Supplier Obligations
Suppliers bidding for eligible NSW Government contracts must:
- Comply with the requirements of the Aboriginal Procurement Policy and any additional agency requirements
- Allocate at least the minimum 1.5% Aboriginal participation target, or a higher percentage where agreed
- Submit an Aboriginal Participation Plan during the tender process
- Work with the contracting agency to implement the plan successfully
- Report quarterly on progress through the reporting buy nsw portal
Looking Ahead
Social value is becoming an increasingly important factor in government purchasing decisions alongside traditional considerations such as price, quality, and capability. Businesses that can demonstrate meaningful commitments to employment, training, diversity and Aboriginal participation will be better positioned to compete for government contracts and contribute to stronger communities, a more inclusive workforce and long-term economic growth across New South Wales.
As we grow our presence in NSW, we’re keen to connect with local businesses and organisations across the state. From tender preparation and strategy development through to implementation and reporting, our team can help.
