If you run a small business and have never thought about government work, you're not alone. Plenty of owners assume it's only for big firms with bid teams. It isn't. This guide sets out the plain benefits of selling to federal (Commonwealth) agencies, and the things worth weighing up before you start. It's general information, not advice.

A customer that has to pay on time

Under the Supplier Pay On-Time or Pay Interest Policy, non-corporate Commonwealth entities must pay a correctly rendered invoice within 20 calendar days of acknowledging satisfactory delivery. Where both sides use Peppol eInvoicing, the limit is 5 calendar days. If an agency pays late, it must work out simple interest at the ATO's general interest charge rate for each day late and pay it to you if it comes to more than A$100.

From 1 January 2027 the terms change to 10 business days for all invoices. Until then, the current terms apply.

The rules have limits. They don't cover disputed amounts, incorrect invoices, or purchases made on your own standard terms, among other exceptions. Still, few private customers commit to this in writing.

Contracts that run for years

Many federal contracts run for more than one year, and some have options to extend. A multi-year contract gives you something rare in small business: a known customer for a known period, which helps with hiring, planning and cash flow.

A public record of who buys what

Agencies must report contracts valued at $10,000 or more on AusTender within 42 days, and standing offers (panels) must be reported too. Each notice shows the agency, the supplier, the value, the category and the start and end dates.

That means you can see which agencies buy what you sell, who supplies them now, and when those contracts end.

A fair, rules-based process

Federal buying follows the Commonwealth Procurement Rules (CPRs). They focus on value for money, require ethical and transparent conduct, and tell officials not to discriminate unfairly against small and medium enterprises (SMEs). Unsuccessful bidders can ask for a debrief, so you can learn from a loss.

Credibility

Delivering well for a government agency is a solid reference. It shows you've met formal requirements and can be trusted with public money, which can help when you talk to other customers. Check the agency's rules before using its name or logo in your marketing.

A large, steady market that wants SMEs

The Australian Government buys across almost every industry, year after year. The government aims to buy at least 40% of contracts worth up to $20 million, by value, from small and medium enterprises (SMEs). There is also a broader commitment of at least 25% by value for contracts up to $1 billion. An SME here means an Australian or New Zealand business with fewer than 200 full-time equivalent employees.

A realistic way in: smaller contracts and panels

You don't have to start with a giant tender.

  • Smaller purchases favour Australian businesses. For procurements from $10,000 up to the procurement threshold ($125,000 for most agencies, outside construction), agencies must invite only Australian businesses, unless an official documents why that isn't appropriate.
  • An SME exemption. Agencies may buy goods and services valued up to $500,000 from an SME without following the extra open-tender rules (after Indigenous Procurement Policy requirements are met).
  • Panels and standing offers. A standing offer, often called a panel, sets terms and pricing so agencies can buy from listed suppliers without a fresh full tender each time. For work under $125,000 from the Management Advisory Services Panel, the People Panel, or Digital Transformation Agency standing offers, agencies must invite only SMEs on that panel. Getting onto the right panel can open many smaller jobs.

All figures include GST.

Things to weigh up

  • Paperwork. Responses take time: forms, insurances, policies, pricing schedules and evidence of past work.
  • Competition. Public opportunities attract many bidders, and incumbents often know the agency well.
  • Long timelines. From planning to approach to market to contract can take months. Cash flow needs to survive the wait.
  • Being on panels. A panel place is not a guarantee of work. Panels open only at certain times, and you still have to win each job.
  • Contract terms. Commonwealth contracts can include liability, insurance and reporting requirements. Read them carefully, and get advice if unsure.

Where to go next

Sources (checked 5 November 2026)

Contract Horizon is independent and not affiliated with the Australian Government.