Changes to the Indigenous Procurement Policy
The following details changes to the Indigenous Procurement Policy.
Since its introduction in 2015, the IPP has driven demand for Indigenous businesses. It has resulted in 1,473 Indigenous businesses delivering 11,933 contracts worth over $1.83 billion.
The policy sets a target for the number of Commonwealth contracts awarded to Indigenous businesses.
While progress is positive, a high proportion of contracts won by Indigenous businesses have been low value contracts.
In addition, currently Indigenous participation targets apply to high value contracts in eight specified industries. Changes to increase the number of industries where Indigenous participation is a mandatory part of doing business with the Commonwealth are needed.
Changes from 1 July 2019
From 1 July 2019, to ensure Indigenous businesses win higher value contracts at a level closer to those of non-Indigenous businesses, a target based on the value of contracts awarded will be introduced. The target will be set at one per cent in FY19-20 and will be increased by 0.25 per cent each year until it reaches three per cent in 2027.
Changes from 1 July 2020
From 1 July 2020, Indigenous participation targets will be mandatory in high value contracts across more specified industries.
New categories for mandatory minimum requirements by United Nations Standard Products and Services Codes
64000000 Financial instruments, products, contracts and agreements
71000000 Mining and oil and gas services
73000000 Industrial production and manufacturing services
77000000 Environmental services
80000000 Management and business professionals and administrative services (sub-category exemptions apply)
81000000 Engineering and research and technology based services
84000000 Financial and insurance services (sub-category exemptions apply)
85000000 Healthcare services
91000000 Personal and domestic services
92000000 National defence and public order and security and safety services (sub-category exemptions apply)
94000000 Organisations and clubs
New sub-category exemptions for mandatory minimum requirements by United Nations Standard Products and Services Codes
80131500 Lease and rental of property or building
80131501 Land leases
80131503 Residential rental
84130000 Insurance and retirement services
84131800 Retirement funds
92110000 Military services and national defence
92111700 Military science and research
The new measures are designed to be both ambitious and achievable for the Commonwealth and Indigenous businesses. The changes will be phased in so that implementation is steady and sustainable.
Starting at one per cent, the value target gives Commonwealth buyers time to adjust to the new settings, and ensures the Indigenous business sector is well prepared for an increase in demand.
To support demand, the government’s 10-year Indigenous Business Sector Strategy will ensure Indigenous businesses have access to the capital and business support needed to take up these commercial opportunities.
This policy applies to all Commonwealth non-corporate entities that are subject to the Commonwealth Procurement Rules (CPR). All other entities are encouraged to adopt the policy as best practice.