The different ways that government makes a purchase

Government agencies are required to follow different purchasing methods, depending on the value of the contract.

Contracts, otherwise known as Common Use Arrangements (CUAs), exist for goods commonly bought by government, for example fuel, computers, electricity, travel, advertising, groceries and stationery.

If a good or service is not available on a CUA, government agencies are required to follow four purchasing methods:

  • direct sourcing
  • limited sourcing
  • open advertising

The method an agency chooses will be based on the value of the purchase as well as the risk involved. See the Western Australian Procurement Rules for more detail about purchasing methods.

Direct sourcing

A direct purchase is when a government officer identifies a supplier and purchases directly from them.

This process may be undertaken for purchases up to $50,000 (including GST) and depends on:

  • the market
  • complexity and risk
  • process efficiency

Limited sourcing

Limited sourcing is a market approach to more than one supplier, but not all suppliers that is they are not openly tendered.

Agencies can conduct limited sourcing where their purchase is between $50,000 and $250,000 (including GST).

Open advertisement

​The open advertisement process must be used for purchases $250,000 and above (including GST).

Government advertises requests for open advertisement tenders on the Tenders WA website so that all suppliers have an equal opportunity to bid. Sometimes we also advertise open advertisement tenders in metropolitan, national and regional newspapers.

The request document will include appropriate specifications, selection requirements, evaluation methodologies, references to appropriate supply policies and special conditions (if any) relevant to the procurement.

You must follow the instructions in the request document when submitting your bid.

The Department of Finance helps agencies to purchase goods and services when the total estimated value of their contract is $250,000 and above, or there is greater risk involved. If you are successful in tendering for a good and services contract with a government agency, the contract will be between you and that government agency.

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