30 July 2021: OIA response | Changes and adherence to the Progressive Procurement Policy

30 July 2021

Dear [name and contact details withheld] 

Request for information 

Thank you for your request dated 3 July 2021 under the Official Information Act 1982 (OIA) for information relating to the Government’s new Progressive Procurement Policy. You requested:

  • Copies of any communications you have sent to suppliers or contractors asking whether they meet the definition of a Māori business;
  • Copies of any communications you have sent to suppliers or contractors advising them of the requirements of the Progressive Procurement Policy;
  • The number/value of contracts your agency has terminated because a supplier or contractor didn’t meet the definition of a Māori business since the Progressive Procurement Policy came into force;
  • The number/value of contracts your agency has signed with Māori businesses since the Progressive Procurement Policy came into force. 

Government procurement policy – new focus on Māori businesses

Pharmac is aware of the Government’s new procurement policy, which has a focus on Māori businesses, announced in December 2020. Mandated agencies now need to ensure that at least 5% of the total number of annual procurement contracts are awarded to Māori businesses. Reporting will start from 1 July 2021 – 30 September 2021. https://www.procurement.govt.nz/broader-outcomes/increasing-access-for-new-zealand-businesses/(external link) 

Pharmac has an exemption from the target of 5% for pharmaceuticals, including medical devices (as referenced in point 46 of the Cabinet Paper - Supporting the Māori Economy and Achieving Economic and Social Outcomes Through Te Kupenga Hao Pāuaua(external link)). This is because there are very few (if any) Māori owned pharmaceutical companies, and only small volumes of pharmaceuticals are manufactured here in New Zealand. The majority of medicines and medical devices publicly funded in New Zealand are sourced from, and manufactured in, other countries. 

We do, however, need to meet the target for our office and business procurement. Pharmac is working with two Māori agencies - Te Amokura and Whare PR - and staff have had several talks with the working group (MBIE, TPK) about how to measure our current procurement status and steps we can take to meet this expectation. 

Our response to your request for information

At this stage, Pharmac has not sent correspondence to any suppliers or contractors regarding the new policy, including to confirm whether they meet the definition of a Māori business. This means we do not hold any correspondence as detailed in your request for information. As such, we have not provided copies of any correspondence you have requested as the documents alleged to contain the information requested do not exist (section 18(e) of the OIA). 

Additionally, we have not terminated any contracts since the announcement of the policy due to a supplier or contractor not meeting the definition of a Māori business. Because of this, we have not provided a number or value of contracts terminated as this information is not held by Pharmac (section 18(g) of the OIA). 

Please note you have the right, by way of complaint under section 28(3) of the OIA to an Ombudsman, to seek an investigation and review of our decision. 

Number and value of contracts with Māori businesses signed since the Progressive Procurement Policy was announced

Te Amokura

  1. 2021 contract – $6,000 excl. GST
  2. 2021/2022 contract – $39,600 excl. GST 

Whare PR

  1. 2021/2022 contract – $135,000 excl. GST

Please note, the final value paid for the above contracts may vary to the contracted value. This is because the contracts are for ongoing work, some of which are based on hourly consultancy services. 

We trust that this information answers your queries. We are making our information more freely available, so we now publish selected OIA responses (excluding personal details) on our website. Please get in touch with us if you have any questions about this.

Yours sincerely

Rachel Read