Exemption for Indigenous Businesses

The exemption to Divison Two of the Commonwealth Procurement Rules (CPR) for Indigenous Small and Medium Enterprises (SMEs) has been developed to assist the Government implement the Council of Australian Governments National Partnership Agreement on Indigenous Economic Participation.
This exemption seeks to:

  • provide increased opportunities for greater access to the Australian Government procurement market for all Indigenous SME’s;
  • raise awareness among officers undertaking procurement of the Government’s commitment to the ‘Closing the Gap’ strategy on Indigenous disadvantage; and
  • complement implementation of the enhanced Indigenous Opportunities Policy (IOP) administered by the Department of Education, Employment and Workplace Relations (DEEWR).

Exemption to Division Two of the Commonwealth Procurement Rules (CPR) for Indigenous Small & Medium Enterprises FAQs

Does the exemption apply to both State Government agencies and Commonwealth agencies, or will it only apply to Commonwealth agencies?

The exemption only applies to Commonwealth agencies, that is, all Financial Management and Accountability Act (FMA Act) agencies and prescribed Commonwealth Authorities Companies Act (CAC Act) bodies that are mandated to comply with the CPRs.

What type and size of procurements can the exemption be applied to?

The exemption can be applied to the procurement of any goods services and/or property that is valued over the relevant thresholds as listed in the CPRs for FMA Act agencies and CAC Act bodies. Agencies must also identify that the procuring of those goods, services and/or property still represents value for money, the key principle of the Governments procurement framework.

What are the benefits for agencies and Indigenous businesses who apply the exemption to a procurement?

The exemption allows Commonwealth Government agencies to contract directly with Indigenous SMEs without the need to conduct a full tender process and on the condition that the procurement represents value for money.

The exemption aims to reduce the costs and administrative requirements for Indigenous businesses and Commonwealth Government agencies, and assist the Government on ‘Closing the Gap’ on Indigenous disadvantage by providing an avenue for Indigenous businesses to prosper.

Can the exemption be used to award a contract to an Indigenous SME who then subcontracts the work onto a non Indigenous business or SMEs?

No. The exemption can only be utilised for the engagement of Indigenous SMEs only and not be used to subcontract the production of the goods and/or services onto a non-Indigenous enterprise. The exemption is a small but important step in improving Indigenous business access to government procurement, assisting the growth of Indigenous SME suppliers and aid relationship building with Indigenous suppliers particularly those supplying Government.