Minimum Requirements

This section outlines some frequently asked questions around minimum requirements for participating in Australian Government procurement processes, responding to an Approach to Market (ATM), and entering into contracts with the Australian Government. It is intended to complement the information available under:

To understand broad requirements for conducting business in Australia, refer to information available on Business.gov.au.

General Business Requirements

Australian Business Number – Do I have to have an ABN to respond to an ATM?

Although you can run a business without an ABN, it is highly recommended you have one. Getting an ABN is free and can make running your business easier in the future. For example, if you need to register for Goods and Services Tax (GST) now or in the future, you'll need an ABN first.

Without an ABN, anyone who pays you, including other businesses or a government organisation, must withhold part of the payments they make to you for tax purposes.

Provided you are entitled to an ABN, you can apply for one through the Australian Business Register.

Government Sales Tax – Do I have to be registered for GST to respond to an ATM?

It is compulsory under the taxation legislation for a business to register for GST if it has a current or expected GST turnover of $75,000 per annum or more ($150,000 per annum or more for non-profit organisations). If you meet this threshold, you are required to register for GST.

For information about GST, and how to register, refer to the Australian Taxation Office’s website.

The Australian Government also buys from micro and small businesses that are not registered for GST because they are below the required registration threshold.

Business Structure – Do I have to be a company to respond to an ATM?

No, you do not have to be a company to respond to an ATM.

Under the Commonwealth Procurement Rules, potential suppliers to the Australian Government must not be discriminated against due to their business structure, size, degree of foreign affiliation or ownership, location, or the origin of their goods and services.

Location – Do I have to be Australian to respond to an ATM?

No, you do not have to be Australian to respond to an ATM.

If you are internationally-based, and are not already conducting business in Australia, you may wish to refer to the Australian Trade and Investment Commission’s Guide to Investing in Australia, which includes information on setting up and running a business in Australia.

Location – Does my business need to be Australian-based for tax residency purposes to respond to an ATM?

No, however you may be required to disclose your businesses’ country of tax residency in certain circumstances.

From 1 July 2023, tenders for Australian Government procurement and contracting opportunities valued over $200,000 are required to disclose their country of tax residency (including their ultimate parent entity’s country of tax residence) as part of responding to an ATM. When this is required, Australian Government buyers will specifically outline these requirements in ATM documentation.

Australian Government buyers cannot use tax residency as a basis to exclude a business from participating in a procurement process.

Further information on country of tax residency disclosure requirements are available on the Treasury website.

Insurance – Do I need insurance to respond to an ATM?

While you generally do not need to have insurances to respond to ATM, if you are successful in winning a contract, you will need to meet any specified insurance requirements prior to entering into an agreement.

Australian Government organisations should not expect suppliers to take out insurance until a contract is to be awarded. This means that while insurance typically is not required at the time of responding to an ATM, having insurance will likely be a requirement of fulfilling a contract. Insurance requirements should be treated on a case-by-case basis and may be different for each contract you win.

The type and level of insurance cover required for a contact will be dependent on the value of the procurement and the risks determined by the Australian Government buyer when dealing with your business, to reduce the overall risk to the Australian Government.

It is your decision, as a business, whether you want to have insurance before you tender and if so, the type and amount of insurance that you think is suitable for your business.

Some common types of insurance include public liability insurance, product liability insurance, professional indemnity insurance and workers compensation insurance.

The Commonwealth Procurement Rules advise Australian Government organisations to limit insurance requirements by reflecting the actual risk borne by suppliers in contractual liability caps.

Reducing the risk to the Australian Government in doing business with you can help represent better value for money in your tender response. Having your business obtain and maintain suitable insurance is one way of demonstrating risk reduction. However, there are other ways to demonstrate a reduced risk in contracting with your business besides holding insurance, such as through: financial bonds; warranties; or obligations to repair, maintain, or make-good.

The amount and type of insurance required will be clearly stated in the ATM documentation.

If you feel the amount or type of insurance being required is excessive, you may choose to query this with the contact officer for the ATM to see if there is any flexibility in the requirements.

Business.gov.au has general information on business insurance.

Insurance – Workers Compensation – Do I need workers compensation insurance to respond to an ATM?

Workers compensation insurance is compulsory by law in all states and territories of Australia. Most ATMs have a requirement for the supplier to comply with Australian laws, and this would include your business having the necessary workers compensation insurance.

An Australian Government organisation may require evidence that your business has appropriate workers compensation insurance at the time of the contract award where your business has won a contract.

You can find out more about workers compensation insurance on the following state and territory websites:

Workplace Health and Safety – Do I need to meet any minimum requirements?

Meeting workplace health and safety (WHS) obligations are compulsory by law in all states and territories of Australia. Most ATMs have a requirement for the supplier to comply with Australian laws, and this would include your business needing to meet WHS obligations.

Each state and territory has its own WHS laws and a regulator to enforce them.

Business.gov.au has general information on workplace health and safety obligations, including links to relevant laws and regulations in each state and territory.

Procurement Connected Policies

There are a number of Australian Government procurement connected policies that place minimum requirements on businesses responding to tenders. Where these policies are relevant, the related requirements will be clearly outlined in tender documentation. There are typically thresholds relating to contract value or business size that determine whether a policy applies.

These policies, and any related thresholds are outlined below.

Australian Industry Participation

The Australian Industry Participation (AIP) National Framework applies to major procurements undertaken by Australian Government non-corporate entities valued at $20 million or more.

Under the AIP National Framework, you may need to prepare an Australian Industry Participation (AIP) Plan if you are awarded an Australian Government contract. This should be clearly stated in tender documentation.

An AIP plan outlines the actions an Australian Government funding recipient will undertake to provide Australian industry with full, fair and reasonable opportunity to tender for the supply of goods and services as subcontractors to the government funded project it is undertaking.

AIP plans do not impact a funding recipients’ commercial decisions or mandate using Australian industry for projects. What they do is give Australian industry the opportunity to show their capabilities when funding recipients consider their project purchasing decisions.

Further information on the AIP National Framework, and the process of developing and submitting an AIP Plan is available here.

Indigenous Procurement Policy – Minimum Indigenous Participation Requirements

The Indigenous Procurement Policy (IPP) aims to stimulate Indigenous entrepreneurship, business and economic development, providing Indigenous Australians with more opportunities to participate in the economy.

The IPP places mandatory minimum Indigenous participation requirements (MRR) on Australian Government procurement contracts that:

Are wholly delivered in Australia
Are valued at $7.5 million (GST inclusive) or more
Have more than half of the value of the contract being spent in a specified industry sector.

The MMR requires suppliers to achieve a minimum percentage of Indigenous employment or supplier use (or a combination of both) on average over the term of the contract. The supplier, in consultation with the relevant purchasing Australian Government organisation, can elect to apply a target of four per cent Indigenous employment or supplier use at the contract level, or a target of three per cent at the organisational level. The supplier may elect to meet the MMR directly or through subcontracts.

When the MMR applies to a tender, this will be clearly specified in tender documentation. In responding to a tender for which the MMR applies, you should:

Outline how the MMR targets will be achieved within an Indigenous Participation Plan
Indicate if your business have been subject to MMR targets previously; and
Declare your organisation’s current levels of Indigenous employment and supply use.

Detailed information on the Indigenous Procurement Policy, and MRR requirements, are available on the National Indigenous Australians Agency website.

Statement of Tax Record

Under the Shadow Economy Procurement Connected Policy, businesses seeking to tender for Australian Government procurement contracts over $4 million (GST inclusive), are required to provide a Statement of Tax Record (STR) from the Australian Taxation Office showing they have a satisfactory tax record, either at the time the tender closes, or within four days of the tender closing if they have provided a request receipt.

Non-corporate Commonwealth entities must include these requirements when approaching the market for contracts over $4 million. When an STR is required to respond to a tender, this will be included in tender documentation.

If the tender documentation specifies that a satisfactory STR is required to be submitted with a tender response, then this applies to you as a lead tenderer, and any first-tier subcontractors.

If the tenderer is a partnership, trust, joint venture, or tax consolidated group then additional STRs are required for related entities, and you should refer to the Shadow Economy Procurement Connected Policy for further information.

The ABNs on the STRs must match the entities submitting the tender. It is a condition of participation that the STR must be satisfactory, obtained prior to the closure of the tender process, and not expired.

STRs must be obtained from the Australian Taxation Office (ATO). Information on how to apply for an STR is provided on the ATO’s website. If you anticipate participating in Australian Government tendering opportunities over $4 million, then you are encouraged to apply for an STR well ahead of time.

Each STR includes a date of expiry, and you should check this is current before submitting it with your tender response. You can also apply for another STR on the expiry of your previous STR to ensure you are ready for future tender opportunities.

For further information for on STR requirements, refer to the Department of the Treasury’s website on the Shadow Economy Procurement Connected Policy, and FAQs for tenderers and suppliers.

Payment Times Procurement Connected Policy

The Payment Times Procurement Connected Policy was developed to improve payment times to suppliers operating in the supply chains of Australian Government procurement contracts.

Under the policy, large businesses that are awarded Australian Government procurement contracts valued over $4 million (GST inclusive) are required to:

Pay any subcontracts valued up to $1 million within 20 calendar days following the acknowledgement of the satisfactory delivery of goods or services and the receipt of a correctly rendered invoice
Pay interest if they fail to pay subcontractors within 20 calendar days and the accrued interest exceeds $100
Use reasonable endeavours to reflect the same obligations to their subcontractors who also meet the thresholds to be covered by the policy.

There are some specific circumstances where the policy does not apply. If you need to adhere to the policy, this will be clearly outlined in tender documentation.

If you are applying for a tender subject to the policy, tender documentation will require you to declare whether your business is considered a ‘Reporting Entity’ for the purposes of the Payment Times Reporting Act 2020. To understand if your business meets the thresholds to be considered a ‘Reporting Entity’, refer to the Payment Times Reporting Regulator website.

If you successfully win work, and you are a Reporting Entity, your contract will include clauses requiring you to adhere to the requirements of the policy.

For further information on requirements, refer to the Department of the Treasury’s website on the Payment Times Procurement Connected Policy.

For further information on the Payment Times Reporting Scheme, and Payment Times Reporting Act 2020, refer to the Payment Times Reporting Regulator website.

Workplace Gender Equality Act – Letter of Compliance

Under the Workplace Gender Equality Procurement Principles, non-public sector employers with 100 or more employees in Australia must supply a letter of compliance with their tender submission or prior to contracting with the Australian Government if the procurement exceeds the relevant threshold:

for non-corporate Commonwealth entities, other than for procurements of construction services, the procurement threshold is $80,000
for prescribed corporate Commonwealth entities, other than for procurements of construction services, the procurement threshold is $400,000
for procurements of construction services by non-corporate or prescribed corporate Commonwealth entities, the procurement threshold is $7.5 million.

If the relevant procurement threshold has been met, and you employ 100 or more employees in Australia, tender documentation will clearly outline if you are required to supply a letter of compliance.

Letters of compliance are issued by the Workplace Gender Equality Agency, and demonstrate that the entity complies with requirements under the Workplace Gender Equality Act 2012.

The Act requires non-public sector employers with 100 or more employees to submit a report annually to the Workplace Gender Equality Agency. This includes:

non-public sector employers with 100 or more employees
corporate structures that employ 100 or more people across all entities.

The Workplace Gender Equality Agency issues compliance letters 28 days after the organisation has submitted a fully compliant report.

For further information, visit the Workplace Gender Equality Agency’s website on the Workplace Gender Equality Procurement Principles. Reports are submitted via the Workplace Gender Equality Agency’s Employer Portal.

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