The Australian Government buys a huge range of goods and services every year. The Department of Finance says more than 83,400 contracts worth $99.6 billion went to businesses in the 2023 to 2024 financial year. Plenty of that work goes to small firms. Yet many owners never try for it because tendering looks slow and full of paperwork.
This guide explains how federal government buying works for a small business. It covers where tenders are listed, the rules buyers follow and what a good response looks like. It also covers payment times, debriefs and state government options. The facts come from the Department of Finance and the WA Small Business Development Corporation.
What the government buys
Government agencies are customers like any other, just bigger. The Department of Finance lists advertising, cleaning, engineering and office equipment among the things it buys. Training, project management, research and recruitment are on the list too. If you sell to other businesses, there is a fair chance an agency needs what you offer.
Federal buying is governed by the Commonwealth Procurement Rules. These rules tell agencies how to approach the market and how to choose a supplier. They were updated with changes that took effect on 17 November 2025. Knowing the basics helps you see where your business fits.
Finding opportunities on AusTender
AusTender is the central place to find federal tenders. You can search current opportunities and look at Annual Procurement Plans, which show what agencies expect to buy. You can also see who has won contracts in the past. That history is a useful guide to what agencies pay and who you would be up against.
Registration on AusTender is free. Once registered, you can get notifications of new opportunities in your categories. Registration is also needed to read detailed tender documents and to lodge a response. It takes a little time to set up, so do it before a tender you want appears.
State and local councils run their own systems. In Western Australia, for example, state agencies must advertise tenders over a set value on the Tenders WA portal. WA councils often advertise in The West Australian, and WALGA runs a Preferred Supplier Program. Each state and territory has its own arrangements, so check the rules where you trade.
How agencies approach the market
An open tender is advertised publicly on AusTender, and any supplier can respond. From 17 November 2025 the threshold for an open tender rose from $80,000 to $125,000 for non corporate Commonwealth entities. Below that level, agencies can use a limited tender and invite suppliers directly. That makes it worth being known to the agencies you want to work with.
The 2025 changes also favour local firms. For buys above $10,000 and below $125,000, non corporate Commonwealth entities must invite only Australian businesses to tender. For construction services, the same rule applies to buys below $7.5 million. Agencies also have a commitment to source 20 per cent of procurement by value from small and medium businesses.
Some work only flows through panels and standing offers. Suppliers on a panel sign a deed of standing offer for a set period, and panels usually run for at least three years. Being on a panel does not guarantee you will be asked to quote. It does put you in the room when a request goes out.
Value for money is more than price
Value for money is the core test in the procurement rules. The Department of Finance is clear that it is not just about price. Buyers also weigh quality, fitness for purpose, experience and flexibility. Environmental sustainability and whole of life costs count as well.
This is good news for smaller firms. You may not be the cheapest bidder, but you can still win on service and fit. Show how your offer solves the agency’s actual problem. Give clear evidence of past work and the people who will do the job.
Writing a strong tender response
Read the approach to market documents twice before you write a word. They set out the closing date, the format and how to submit, which is usually through AusTender. They also list conditions of participation, such as licences, standards or insurance. If you do not meet the conditions of participation, your tender will not be considered.
Plain, well organised writing helps the people scoring your bid. Answer each evaluation criterion under its own heading. Keep claims specific and back them with facts the evaluators can check.
A final check before you lodge can save a good bid from a silly mistake. Small gaps, like an unsigned form, can cost you points. Run through a short checklist like this one:
- Every evaluation criterion has a clear answer.
- All mandatory forms are complete and signed where needed.
- Pricing follows the format the agency asked for.
- Insurance, licence and policy documents are current.
- The response is lodged well before the closing time.
Some contracts carry extra requirements under Procurement Connected Policies. For some contracts over $4 million, for example, a Statement of Tax Record is required. Contracts also carry legal terms around liability, insurance and intellectual property. Having a lawyer look at them is one of the advantages of hiring a commercial lawyer before you commit.
Questions, deadlines and debriefs
If something in the documents is unclear, ask the contact officer named in them. Buyers share questions and answers with every potential supplier, with names removed. Agencies may also run industry briefings, which can be advertised on AusTender. These are a good chance to learn what matters most to the buyer.
Deadlines are strict. The Department of Finance says late tenders will not be accepted. Systems can be slow near closing time, and files can fail to upload. Aim to lodge a day early if you can.
Win or lose, ask for a debrief. Every respondent can request one, and buyers must provide it if asked. A debrief gives feedback on your own response. It will not discuss other bidders, but it often shows exactly what to fix next time.
Getting paid and planning your cash flow
Federal agencies have clear payment rules. Under the Supplier Pay On Time or Pay Interest Policy, agencies must in most cases pay within 5 calendar days for electronic invoices. In other cases, the maximum is 20 calendar days. Check your contract for the exact terms that apply.
Even with fast payment, a large contract can stretch a small business. You may need to hire staff or buy stock before the first invoice is paid. Planning ahead helps reduce stress associated with money while the work ramps up. Talk with your accountant before you price a big job.
Tendering also takes time away from other sales work. Weigh the effort of a bid against what you would spend chasing private clients. Our article on how much digital marketing costs gives a sense of what other ways of winning work involve. Many firms do both and choose tenders that suit their strengths.
Free help from the Department of Finance
The Department of Finance runs a Selling to Government website with guides, videos and a newsletter. It offers free virtual workshops for businesses. It also runs a free face to face workshop called Building your best tender response in Brisbane and Perth. There is specific guidance for small businesses, Indigenous businesses and supported employment providers.
Agencies will look closely at your business before they sign. Expect questions about your finances, insurance and track record. It is the same kind of checking a buyer does in due diligence when buying a business, only the agency is checking you. Having your records in order makes that part simple.
The rules do change from time to time. The Department of Finance publishes a summary of the updated Commonwealth Procurement Rules when they do. It is worth checking before each bid. A rule that applied last year may not apply now.
Frequently asked questions
Does it cost anything to register on AusTender?
No, registration on AusTender is free. It lets you get notifications of new opportunities. You also need it to read detailed tender documents and lodge a response.
Can a small business win federal government work?
Yes, and the rules support it. Agencies have a commitment to source 20 per cent of procurement by value from small and medium businesses. Many lower value buys can also go to invited suppliers through a limited tender.
What happens if my tender is late?
The Department of Finance says late tenders will not be accepted. Submit by the date and time in the tender documents. Lodging early gives you room to fix any upload problems.
Can I get feedback if I miss out?
Yes, every respondent can ask for a debrief and the buyer must provide one. It covers your own response only. Use it to strengthen your next bid.
This article is general information about Australian Government procurement and may not suit your circumstances. Rules differ between federal, state and local government and change over time, so check the current requirements before you bid.