The primary purpose of the Indigenous Procurement Policy (IPP) is to stimulate Indigenous entrepreneurship, business and economic development, providing Indigenous Australians with more opportunities to participate in the economy.
Prior to the implementation of the policy, Indigenous enterprises secured limited business from Commonwealth procurement. The policy is intended to significantly increase the rate of purchasing from Indigenous enterprises.
How the IPP works:
- Annual targets for the volume and value of contracts to be awarded to Indigenous enterprises by the Commonwealth and each Portfolio.
- The Mandatory Set Aside (MSA) requires that Indigenous businesses be given an opportunity to demonstrate value for money before a general approach to market. The MSA applies to procurements to be delivered in remote Australia and for all other procurements wholly delivered in Australia valued between $80,000‑$200,000 (GST inclusive).
- Indigenous employment and business participation targets apply to contracts wholly delivered in Australia valued at $7.5 million or more in 19 industries, known as Mandatory Minimum Indigenous Participation Requirements (MMR).
Exemption 16 of the Commonwealth Procurement Rules allows portfolios to procure directly with Indigenous small to medium size enterprises, provided the enterprise can demonstrate value for money.
The success of the IPP is measured by:
- An increase in the number of Indigenous businesses awarded a contract
- An increase in the volume and value of contracts awarded to Indigenous businesses.
Since 2015, the IPP has performed well against these KPIs, generating over $3.5 billion in contracting opportunities for Indigenous businesses. This has involved over 24,470 contracts awarded to more than 2,140 Indigenous businesses. Detailed data for 2019-20 Commonwealth Indigenous procurement outcomes is available at:
- 2019-20 Commonwealth Indigenous procurement outcomes
- Mandatory set aside results
- Mandatory Minimum Indigenous participation requirements (MMR)
IPP Guides – June 2020
Guides for managing the IPP’s mandatory minimum requirements (MMR)
- Guide 1: Procuring Officials and Contract Managers
- Guide 2: Potential Suppliers
- Guide 3: Indigenous businesses
(currently under development)
Guides for general IPP use
- Guide 4: Welcome pack for Industry Contractors (How to use the IPP Reporting Solution)
- Guide 5: Model Clauses
IPP Data/results
2019-20 Commonwealth Indigenous procurement outcomes
Over 918 Indigenous businesses secured more than 7,749 Commonwealth contracts during the 2019-20 financial year. As of 9 October 2020, these were valued in total at $857 million.
The Commonwealth and all portfolios exceeded their 2019-20 targets of 3 per cent of the number and 1 per cent of the value of accessible contracts being awarded to Indigenous businesses.
IPP data will change as contracts are varied or published on AusTender and will likely vary from Indigenous procurement published by individual portfolios.
The method for calculating and measuring performance against the target is outlined in the IPP policy document. The following data is current as at 19 September 2020.
| Portfolio | Number Target | Contract count against target | Value Target | Value of contracts |
|---|---|---|---|---|
| Agriculture, Water and the Environment | 105 | 558 | $7,815,731.84 | $55,349,567.47 |
| Attorney-General's | 69 | 252 | $2,662,381.65 | $5,852,368.28 |
| Defence | 714 | 2,882 | $95,467,045.28 | $447,359,966.24 |
| Education, Skills and Employment | 84 | 385 | $11,208,558.30 | $16,853,457.83 |
| Finance | 52 | 133 | $2,692,275.21 | $12,484,078.68 |
| Foreign Affairs and Trade | 61 | 267 | $5,537,892.36 | $19,216,042.83 |
| Health | 78 | 341 | $7,074,974.43 | $75,745,754.88 |
| Home Affairs | 105 | 914 | $11,180,635.52 | $12,897,370.30 |
| Industry, Science, Energy and Resources | 82 | 339 | $7,222,065.67 | $11,789,425.81 |
| Infrastructure, Transport, Regional Development and Communications | 49 | 739 | $4,396,651.99 | $41,132,278.47 |
| Parliamentary Departments | 18 | 59 | $1,538,674.44 | $5,510,369.63 |
| Prime Minister and Cabinet | 43 | 904 | $2,234,670.90 | $39,946,311.23 |
| Social Services | 117 | 1,096 | $20,359,604.32 | $76,483,662.14 |
| Treasury | 135 | 414 | $12,819,269.77 | $26,831,984.22 |
| Veterans' Affairs | 39 | 81 | $2,603,769.50 | $6,226,197.51 |
| Total Commonwealth | 1,750 | 9,364 | $194,814,201.18 | $853,678,835.52 |
- For details of how portfolios report contracts against targets refer to the Indigenous Procurement Policy.
- The IPP policy includes multiyear contracts in calculating performance against number targets.
Commonwealth Indigenous Procurement Targets (number and value of contracts by portfolio)
| Portfolio | 2020-21 procurement Number target (3% of number of eligible contracts*) |
2020-21 procurement Value target (1.25% of value of eligible contracts*) |
|---|---|---|
| Agriculture, Water and the Environment | 112 | $11,245,488.51 |
| Attorney-General's | 70 | $3,110,914.93 |
| Defence | 676 | $110,745,011.21 |
| Education, Skills and Employment | 78 | $9,387,111.88 |
| Finance | 49 | $3,455,323.19 |
| Foreign Affairs and Trade | 59 | $5,615,142.14 |
| Health | 88 | $9,206,019.43 |
| Home Affairs | 102 | $13,563,941.28 |
| Industry, Science, Energy and Resources | 78 | $7,943,524.80 |
| Infrastructure, Transport, Regional Development and Communications | 52 | $4,860,228.36 |
| Parliamentary Departments | 15 | $1,229,015.81 |
| Prime Minister and Cabinet | 43 | $2,349,104.32 |
| Social Services | 114 | $23,948,259.08 |
| Treasury | 136 | $12,761,704.88 |
| Veterans' Affairs | 48 | $3,554,296.40 |
| Total Commonwealth | 1720 | $222,975,086.25 |
* For details on how targets are calculated targets refer to the Indigenous Procurement Policy
Contract Count by Financial Year
The following graph shows the growing size of the Indigenous business sector since the IPP started.
Mandatory set aside results
The Mandatory Set-Aside (MSA) arrangements provide Indigenous SMEs with the opportunity to demonstrate value for money before the procuring official makes a general approach to the market.
The following tables demonstrate that Indigenous businesses continue to win more contracts under the MSA, including in remote areas.
| Mandatory Set Aside Results | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21* |
|---|---|---|---|---|---|---|
| Number of new IPP contracts valued at $80,000–$200,000 and listed on AusTender | 131 | 224 | 295 | 431 | 450 | 290 |
| Number of new IPP contracts, valued between $80,000–$200,000, as percentage of total listed on AusTender | 1.37% | 2.51% | 3.23% | 4.80% | 4.21% | 5.56% |
| Value of new IPP contracts valued at $80,000–$200,000 and listed on AusTender ($ million) | $16.7 | $28.6 | $38.6 | $55.0 | $57.6 | $62.2 |
| Value of new IPP contracts valued between $80,000–$200,000, as percentage of total value of these contracts listed on AusTender | 1.37% | 2.49% | 3.27% | 4.75% | 4.13% | 5.65% |
| Mandatory Set Aside –Remote Performance | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21* |
|---|---|---|---|---|---|---|
| Number of new contracts delivered in remote areas | 202 | 604 | 894 | 830 | 1107 | 480 |
| Value of new contracts delivered in remote areas ($ million) |
$25.3 | $80.1 | $110.4 | $73.5 | 84.9 | 60.3 |
MSA Notes:
- For full details on the MSA including information on when it does not apply refer to the Indigenous Procurement Policy.
- NIAA was unable to exclude contracts that were subject to an exemption prior to 1 July 2018. Due to this data constraint, for the period 2015-16 to 2017-18, performance is likely to be higher than reported in the MSA tables above.
- Under the IPP, the MSA applies to all contracts delivered in remote areas regardless of value. As a result, contracts delivered in remote areas, that also meet the MSA threshold ($80,000-$200,000), are included in both MSA tables on this page.
- IPP data for remote Australia is under-reported as it relies on manual reporting. NIAA continues to work with portfolios to develop better systems to collect this data.
- A map defining the areas considered remote under the IPP is available.
Mandatory Minimum Indigenous participation requirements (MMR) for Indigenous workforce and/or supply targets (MMR)
Since 1 July 2016, 214 contracts valued at $14.6 billion, awarded to 115 organisations, have been subject to the IPP’s mandatory minimum Indigenous participation requirements (MMR).
MMR targets apply to contracts wholly delivered in Australia valued at or above $7.5m that are awarded in one or more of 19 specified industry categories.
The original eight industry categories under the MMR, which applied to Approaches to Market undertaken from 1 July 2016, are:
- Farming and fishing and forestry and wildlife contracting services.
- Building, construction and maintenance services.
- Industrial cleaning services.
- Transportation, storage and mail services.
- Editorial and design and graphic and fine art services.
- Education and training services.
- Travel and food and lodging and entertainment services.
- Politics and civic affairs services.
From 1 July 2020, the following 11 new industry categories with mandatory minimum requirements were added, which apply to Approaches to Market undertaken from that date:
- Financial instruments, products, contracts and agreements.
- Mining and oil and gas services.
- Industrial production and manufacturing services.
- Environmental services.
- Management and business professionals and administrative services (sub-category exemptions apply*).
- Engineering and research and technology-based services.
- Financial and insurance services (sub-category exemptions apply*).
- Healthcare services.
- Personal and domestic services.
- National defence and public order and security and safety services (sub-category exemption applies).
- Organisations and clubs.
*sub-category exemption applies – for more information refer to the Indigenous Procurement Policy and UNSPSC policy guide.
Companies with active MMR contracts
The following table lists organisations that currently have one or more contracts with an MMR, as at 14 April 2021.
| Organisation | Number of contracts |
|---|---|
| MAS NATIONAL LIMITED | 3 |
| AUTISM SPECTRUM AUSTRALIA (ASPECT) | 1 |
| ThyssenKrupp Elevator Australia | 1 |
| ADCO GROUP PTY LIMITED | 1 |
| HINDMARSH CONSTRUCTION AUSTRALIA PT | 1 |
| SOUTH METROPOLITAN TAFE | 1 |
| APGC GROUP PTY. LTD. | 1 |
| TAFE SA | 1 |
| SITZLER PTY LTD | 3 |
| BUSY AT WORK | 2 |
| Education Services Australia Ltd | 3 |
| NORTH METROPOLITAN TAFE | 1 |
| SARINA RUSSO JOB ACCESS | 3 |
| Built Pty Limited | 1 |
| Iron Mountain Australia Group Pty Ltd | 1 |
| MTC Work Solutions | 1 |
| TEACH FOR AUSTRALIA | 1 |
| AUSTRALIA POST | 1 |
