What you need to know
The NSW Government is implementing a supplier debarment scheme that will establish clear rules on when suppliers who engage in serious misconduct or abuse of trust can be banned from doing business with the NSW Government.
The debarment scheme responds to a recommendation by the Independent Commission Against Corruption (ICAC) following ICAC’s investigation into the awarding of Transport for NSW and Inner West Council contracts (Operation Hector).
The Hon. Courtney Houssos MLC, Minister for Domestic Manufacturing and Government Procurement, is seeking feedback on the draft Local Jobs First Bill 2025. The Bill updates the Public Works and Procurement Act 1912 to add provisions for the Debarment Scheme. Specifics of the scheme will be outlined in future regulations.
The Debarment Scheme will promote responsible supplier behaviour, building on the current Supplier Code of Conduct. Debarment will only occur for suppliers that have been found to be involved in serious misconduct.
Download the drafts for public consultation of:
Consultation on other features of the Local Jobs First Bill including the Local Jobs First Commissioner is taking place concurrently here.
What is changing?
Schedule 3 of the Bill amends the Public Works and Procurement Act NSW 1912 to establish a Debarment Scheme with the following key features:
- Debarment will occur automatically following certain convictions, penalties, or adverse rulings from courts or regulatory bodies. Suppliers are barred from the date a relevant decision is made against them or a 'Principal Officer'.
- Regulations developed under the Public Works and Procurement Act will define misconduct—including bribery, extortion and industrial manslaughter - which may result in debarment.
- Both individuals and corporations can be debarred. If a debarred individual is a ‘Principal Officer’ of a corporation, the corporation itself will also be debarred for as long as that individual holds the position. A ‘Principal Officer’ is a director or secretary of a corporation, a partner in a partnership, a trustee of a trust, and senior managers as specified under the Corporations Act 2001 Cth.
- Debarment will be for a maximum of 5 years and vary depending on the severity of the misconduct.
- Government agencies will be prohibited from contracting with debarred suppliers or with suppliers who subcontract with debarred suppliers. Additionally, agencies cannot extend existing contracts with suppliers who have been debarred.
- The NSW Procurement Board can allow government agencies to contract with a debarred supplier when the contract is essential and no alternative suppliers are available.
- The details of how the Debarment Scheme will work will be set out in the Regulations.
Why is this important?
The NSW Government spends over $40 billion on goods and services and construction each year. The government is committed to ensuring this spend goes to responsible and ethical suppliers.
Working with suppliers who have a history of misconduct or legal breaches increases costs and disadvantages those who follow the rules. The Debarment Scheme means dodgy companies won’t get an unfair advantage over companies that act in good faith and meet the ethical standards and behaviours the NSW Government expects from its suppliers.
This Debarment Scheme will enable the government to publish information about non-compliant suppliers, exclude them from participating in tenders, and not renew or extend existing contracts.
Suppliers will be guaranteed procedural fairness through a transparent and consistent debarment process.
How to Have Your Say
You can provide feedback on the Debarment Scheme on Have Your Say, the NSW Government’s consultation website.
You can either:
Next steps
December 2025 to February 2026: draft Bill open for consultation.
Next steps: revise Bill based on feedback and introduce to NSW Parliament for debate and vote.
Exposure draft release for comment
Legislation revised
Legislation introduced to Parliament
Further information and contacts
For more information or clarification, please contact NSW Procurement:
- Phone: 1800 679 289
- Email: nswbuy@treasury.nsw.gov.au