Posted on June 16, 2022 by Ming Gu and Lindsay Taylor

Tendering Exemption Threshold Increases for Natural Disaster Recovery

The Local Government (General) Amendment Regulation 2022 (NSW) (Amendment Reg) commenced on 10 June 2022. It inserts a new section 170A into the Local Government (General) Regulation 2021 (NSW) (LG Reg). The new section increases the tendering exemption threshold for contracts concerning natural disasters response or recovery. On the same day, the Office of Local Government issued Circular No. 22-17 in relation to the Amendment Reg.

Section 55(1) of the Local Government Act 1993 (NSW) (LG Act) requires a local council to invite tenders before entering into specified contracts. Section 55(3) further provides that the tendering requirement under s55(1) does not apply to certain contracts. Relevantly, a contract is exempt from the tendering requirement in s55(1) if it involves an estimated expenditure or receipt of an amount of less than $250,000 or another amount as may be prescribed by the regulations (see s55(3)(n)(i)).

Pursuant to s55(3)(n)(i), the newly inserted s170A of the LG Reg prescribes a tendering exemption threshold of $500,000 for contracts entered into by local councils primarily for the purpose of response to or recovery from a declared natural disaster and within 12 months of such a declaration.

For the purposes of s170A, ‘declared natural disaster‘ means ‘a natural disaster that has been declared in relation to the area of a council by either—

(a) a Natural Disaster Declaration for the purposes of the Natural Disaster Relief and Recovery Arrangements jointly administered by the Commonwealth and the States and Territories, or
(b) a declaration under the State Emergency and Rescue Management Act 1989, section 33′ (see s170A(2)).

A copy of the Amendment Reg can be found via this Link.

A copy of Circular No. 22-17 can be found via this Link.

If you want to discuss the issues raised in this post, please leave a comment below or contact Dr Lindsay Taylor on 02 8235 9701.