A pipeline worth fighting over
The Ministry of Education is consulting on a plan to cut the number of firms it uses to deliver major school property projects from around 190 suppliers down to a smaller approved group. The proposal, called the Regional Supplier Programme, went to market via GETS on 8 June 2026, with supplier feedback closing on 26 June.
This is not a marginal procurement tweak. The school property portfolio spans 2,117 state schools with more than 16,000 buildings and a book value above $30 billion. Annual capital spending hit $1.77 billion in 2023/24. Whoever makes the cut gets a predictable, regionally organised forward workbook from one of the largest infrastructure clients in the country. Whoever doesn’t loses access to a serious chunk of public-sector work.
The old system was genuinely broken
Reform was overdue, and the evidence is damning. Jerome Sheppard, Chief Executive of School Property at the Ministry, told 1News the change is about cutting duplication and speeding delivery: “two schools in the same region building similar classrooms can end up using different processes, timelines and suppliers. That creates extra work, makes planning harder and can slow delivery.”
He is right about the dysfunction. The 2024 Ministerial Inquiry, led by former National minister Murray McCully, found the system not fit for purpose. The Ministry had centralised aggressively, directly managing 74% of capital spending in 2022/23, up from 32% in 2013/14, without the procurement discipline to match. The killer number: schools that contracted their own offsite-manufactured classrooms paid around $400,000 per space, while the same product bought through Ministry procurement cost over $1.2 million.
In 2024, Infrastructure Minister Chris Bishop was blunt about the model, calling the idea of schools running “random bespoke designs using architects employed by the school” frankly nuts. The government’s response included pushing offsite manufacturing hard, putting 100 of 352 reviewed projects on ice, and in July 2025 announcing a new Crown agent, the New Zealand School Property Agency, to take over the portfolio. The Regional Supplier Programme is the procurement layer of that overhaul.
Good for scale, harder for the small guys
For large, well-capitalised builders this is welcome news. Fewer competitors on the panel, more predictable forward work, and a selection model that rewards track record. Firms that have already invested in offsite manufacturing, the government’s preferred method, are sitting pretty.
For smaller and regional builders the maths is different. Many currently reach government school work through the existing fragmented panel. A tighter approved group that favours scale and offsite capability could quietly close the door. Sheppard was careful to note that school-managed maintenance, refurbishments and upgrades stay open to local builders. That is real but partial reassurance, because the volume and the margin sit in the centrally managed major works.
Timing makes this sharper. Thousands of construction jobs have been lost since the sector peaked in 2024. Grant Thornton’s Dan Lowe, writing in May 2026, called “an unreliable and inconsistent pipeline of work” the biggest problem facing the sector, and warned that “public sector procurement is driving a race to the bottom on price” that risks pushing consultancies and suppliers to the brink. He argued reform should move “away from a primary focus on lowest upfront price toward selecting for sustainable delivery”. The Regional Supplier Programme’s stated intent aligns with that. Whether the implementation follows through is the open question.
The board worth watching
One governance detail deserves attention. Sitting on the School Property Establishment Board that advises on the reform are Mark Binns, former chief executive of Fletcher Building’s infrastructure division, and Rick Herd, chief executive of Naylor Love for 11 years until March 2024. Both are senior figures from large firms that would be natural candidates for a consolidated panel.
Sheppard says there is no conflict, noting the board “provides advice only” and does not award contracts, with standard conflict rules applied. That answer is procedurally correct. But having two former big-firm executives advising on a reform that concentrates contracts into fewer large hands is a fair thing to keep an eye on.
The reform is necessary and the numbers justify it. What matters now is the design detail, because it will decide who wins the workbook and who is locked out. Construction firms of every size should be reading the fine print before the panel is finalised.
Sources
- Ministry considers cutting number of firms constructing school property (2026-07-06)
- School Property Regional Supplier Programme – Market Engagement (2026-06-08)
- New agency to manage school property announced (2025-07-18)
- Report of the Ministerial Inquiry into School Property (2024-06)
- Education ministry hands off management of urgent school builds (2024-08-29)
- Ministry of Education puts 100 school building projects on ice