Selling to government as a small business

Where business.gov.au starts

business.gov.au sets out five steps for a business looking for tenders and contracts:

1. Learn about government opportunities.
2. Understand how to sell to the government.
3. Search for non-government opportunities.
4. Talk to an expert.
5. Network.

For the second step it points to the Department of Finance’s Selling to Government website, which covers where to find opportunities, the rules agencies follow in choosing suppliers, responding to an approach to market, and what to expect if you win. The rest of this page draws on that site. Where to find the opportunities themselves is the subject of where government tenders are posted.

Who counts as a small or medium enterprise

Under the Commonwealth Procurement Rules, an SME is an Australian or New Zealand firm employing fewer than 200 people on a full-time equivalent basis. Employees of associated entities, such as a parent company, subsidiaries and related bodies corporate, are counted in. For procurements at or above the procurement threshold ($125,000 for most agencies, or $7.5 million for construction services), the rules add that “potential suppliers to government must not be discriminated against due to their size”, among other things.

The figures that matter, from smallest to largest

As at October 2026. Each line is a rule in its own right, read from the page beside it; a buyer’s own approach to market sets the terms of any particular job.

1. $10,000

   For most agencies, contracts and standing offers at or above this value are published on AusTender. For prescribed corporate Commonwealth entities the reporting threshold is $400,000, or $7.5 million for construction services.

2. $10,000 to $125,000 (construction: $7.5 million)

   Since 17 November 2025, non-corporate Commonwealth entities must invite only Australian businesses to make submissions for procurements at or above $10,000 and below the procurement threshold: $125,000 for most purchases, or $7.5 million for construction services. Buying from a standing offer is excluded, and for this rule a New Zealand business counts as Australian. Where the Indigenous Procurement Policy applies, its requirements must be satisfied first (see $80,000 to $200,000 below). If there are no submissions, or none represents value for money, or the official responsible documents that the rule is not appropriate, the agency can look wider.

3. Under $125,000

   When non-corporate Commonwealth entities buy through the People Panel, the Management Advisory Services Panel or a standing offer run by the Digital Transformation Agency, they must invite only SMEs, unless an exception applies: no SME on the panel, no submissions, none that represents value for money, or a documented decision that approaching SMEs is not appropriate. In some circumstances a buyer may also approach you directly for work up to $125,000.

4. $80,000 to $200,000

   For procurements wholly delivered in Australia in this band (GST inclusive), Indigenous businesses must first be given the chance to show value for money. The same Mandatory Set Aside covers procurements delivered in remote Australia; see the Indigenous Procurement Policy.

5. Up to $400,000

   For specific entities, a buyer can approach you directly for work up to $400,000 (GST inclusive).

6. Up to $500,000

   Agencies can engage an SME directly for procurements up to this value, including GST, if value for money can be shown. Before they do, they must give Indigenous businesses the opportunity to bid.

7. Up to $20 million

   The Australian Government has committed to sourcing at least 40 per cent of contracts in this range, by value, from SMEs.

8. Up to $1 billion

   The commitment here is at least 25 per cent by value from SMEs.

Being approached directly is not the only door. When work has been advertised, a contract “may only be awarded to a supplier that responds” to that approach to market, so a business that wants it has to respond.

Getting paid

Under the Supplier Pay On-Time or Pay Interest Policy, once an agency has acknowledged satisfactory delivery and received a correctly rendered invoice, in most cases it must pay within 5 calendar days where both sides have agreed to eInvoice through the Peppol network, or 20 calendar days in all other cases unless shorter terms were agreed. If it pays late, it must pay interest when the interest comes to more than $100, unless an exemption applies.

The interest is not payable if the invoice is not correctly rendered or delivery has not been acknowledged, which makes the invoice itself the part to get right.

The Australian Government prefers to pay by electronic funds transfer, and by credit card for amounts up to $10,000 if your business offers it, though offering card payment is not required.

Beyond government, business.gov.au notes the Payment Times Reporting Scheme, under which “large businesses and government enterprises must report their payment terms and times for small businesses”.

If a bid does not win

You are entitled to ask for a debriefing “after the completion of every approach to market you respond to”, whether or not you won, by phone, email or face to face.

When the trouble is a head contractor

Government buyers “typically do not have the authority to intervene” in disputes between a supplier and its business partners or head contractor. The Australian Small Business and Family Enterprise Ombudsman helps small businesses with contract and payment disputes and unfair contract term disputes, and offers an online referral tool for low-cost dispute resolution.

Tenders outside government

business.gov.au notes that commercial websites also advertise tender opportunities, and that some companies charge for help with tenders. This guide names none of them. Its other suggestions are to talk to your industry association or a business adviser, and to network.