Commonwealth Government procurement

Businesses tendering for Commonwealth Government procurements that are undertaken through open tenders, are subject to the Commonwealth Procurement Rules and have an estimated total value of over $4 million (including GST) must obtain a statement of tax record (STR) showing satisfactory engagement with the tax system.

The satisfactory STR needs to be valid at the time of tender closing.

We recommend that entities requiring an STR:

• refer to the tender request documentation to clarify the requirements
• refer to the Black Economy Procurement Connected Policy (PCP) to understand how the rules affect them. The Black Economy Procurement Connected Policy (PCP) commenced on 1 July 2019 and applies to new approaches to market on or after 1 July 2019.
• apply for an STR early to allow time for processing before the tender closing date
• keep their tax obligations (registration, lodgment, payment) up to date, to ensure they receive a satisfactory STR.

Note: The term ‘black economy’ has now changed to shadow economy. This change reflects the Organisation for Economic Co-operation and Development’s (OECD) definition of unreported or dishonest economic activity. References to the Black Economy Standing Taskforce (BEST) will remain and the taskforce will continue to focus on activities identified under the OECD definition of ‘shadow economy’.

Who needs an STR?

You must obtain a satisfactory STR if either:

• you are a business (prime contractor) tendering for Commonwealth Government procurements with an estimated total value over $4 million (including GST)
• you are a supplier involved in a panel arrangement when the total value of orders under the arrangement is collectively estimated to be over $4 million (including GST)
• you are required as outlined in the tender request documentation.

A prime contractor is a business tendering for or under contract with a Commonwealth Government agency.

A first-tier subcontractor works directly for a prime contractor. First tier subcontractors undertaking work individually valued at over $4 million (including GST) for the prime contractor are also required to have a satisfactory tax record.

To view our full STR, click here…