Government Indigenous business procurement policies have the potential to shape the future of the Indigenous business sector in Australia. Supply Nation works closely with government at all levels to advocate for innovative and effective policies to embed Indigenous businesses into government supply chains.
In addition to the Australian Government’s Indigenous Procurement Policy, most state and territory governments also have policies or initiatives in place that are designed to boost procurement spend with Indigenous businesses. For more information on state or territory policies or initiatives, please email Supply Nation at firstname.lastname@example.org
The Indigenous Procurement Policy
The policy applies to government buyers, any organisation competing to win large government contracts and Indigenous businesses and focuses on three key areas to increase procurement from Indigenous owned businesses.
1) Mandatory targets for each government portfolio
By 2020, each government portfolio must award 3% of their contracts to businesses with 50% or more Indigenous ownership. From a target of 0.5% in 2016, this will increase gradually each year until 2020. Portfolios are responsible for dividing the targets amongst the different agencies or departments for which they are responsible.
2) Mandatory set asides
Domestic contracts between $80,000 and $200,000
If there is an Indigenous business that can deliver any new domestic contract between $80,000 and $200,000, on a value for money basis, Commonwealth buyers must offer it to them first. To find an Indigenous business, buyers must first conduct a search for a suitable business on Supply Nation’s Indigenous Business Direct.
Contracts in remote areas
If there is an Indigenous business that can deliver any new contract that is majority delivered in a remote area, on a value for money basis, Commonwealth buyers must offer it to them first. To find an Indigenous business, buyers must first conduct a search for a suitable business on Supply Nation’s Indigenous Business Direct.
3) Minimum requirements for private businesses to deliver Federal Government contracts
In order to influence private businesses to increase their engagement with the Indigenous community, the mandatory minimum requirements for Indigenous participation apply to all new contracts delivered in Australia that are valued at $7.5 million (GST inclusive) or more, where more than half of the value of the contract is being spent in one or more of the following industry sectors:
Building, construction and maintenance services
Transportation, storage and mail services
Education and training services
Industrial cleaning services
Farming and fishing and forestry and wildlife contracting services
Editorial and design and graphic and fine art services
Travel and food and lodging and entertainment services
Politics and civic affairs services
Currently there are estimated to be 150 such contracts per year. Organisations that win these contracts will be required to either:
Achieve an average of 4 per cent Indigenous employment and/or supplier use over the term of the contract; or
Achieve an average of 3 per cent Indigenous employment and/or supplier use across their organisation over the term of the contract.
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