Policy
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
Since 1 July 2015, the IPP has generated $3 billion in economic activity for the Indigenous business sector.
This has involved a total of 21,038 contracts being awarded to 2,012 Indigenous businesses by the Commonwealth and our major suppliers.
The IPP is a mandatory procurement-connected policy under the legislative instrument of the Commonwealth Procurement Rules.
The purpose of the Indigenous Procurement Policy (IPP) is to leverage the Commonwealth’s annual multi-billion procurement spend to drive demand for Indigenous goods and services, stimulate Indigenous economic development and grow the Indigenous business sector through direct contracts and indirectly through major suppliers via subcontracts and employment opportunities.
The IPP has three main parts:
- Commonwealth and Portfolio Targets (Targets)
- A percentage number and value target of Commonwealth procurement contracts to be awarded to Indigenous businesses in a financial year for each portfolio - The targets are based on a three year average of the contracts that each portfolio awarded in previous years. The targets for 2019-20 are 3 per cent for the number of contracts and 1 per cent for the value of contracts (increasing by 0.25 per cent each year to 3 per cent in 2027-28)
- Mandatory Set-Aside (MSA)
- A mandatory set-aside that requires commonwealth officers seek an Indigenous businesses first for remote contracts and all other contracts wholly delivered in Australia valued between $80,000 - $200,000 and to use them if they can meet the contract’s requirements and are deemed to be value for money.
- Mandatory Minimum Indigenous Participation Requirements (MMR)
- Embedded minimum Indigenous participation requirements in the contracts for procurements valued at or above $7.5m in designated industries with each organisation’s past performance against these requirements to be used to evaluate the awarding of future contracts.
2018-19 Commonwealth Indigenous procurement outcomes
The 2018-19 results demonstrate the policy, now in its fifth year, is continuing to provide opportunities and growth for the Indigenous business sector.
Commonwealth portfolios reported 6,315 new contracts to 775 Indigenous businesses generating $754 million in economic activity for the Indigenous Businesses sector in 2018-19. These contracts included 3,918 in direct contracts worth $681.1 million and 2,397 subcontracts worth $73.1 million and were awarded across a wide range of industry sectors and all states and territories. Incorporated joint ventures were awarded 250 contracts worth $196 million.
The Commonwealth and all portfolios exceeded their 2018-19 target of 3 per cent of contracts awarded to Indigenous businesses.
The method for calculating and measuring performance against the target is outlined in the IPP policy document. Data published is current as at 12 September 2019
| Portfolio | Target 2018–19 | Contract count against target (a)(b) | Value of contracts |
|---|---|---|---|
| Agriculture and Water Resources | 37 | 116 | $6.7m |
| Attorney-General's | 42 | 160 | $14.5m |
| Communications and the Arts | 18 | 555 | $28.9m |
| Defence | 618 | 1903 | $354.2m |
| Education and Training | 32 | 157 | $8.9m |
| Environment and Energy | 68 | 365 | $32.1m |
| Finance | 51 | 124 | $13.1m |
| Foreign Affairs and Trade | 65 | 204 | $10.1m |
| Health | 74 | 224 | $28.2m |
| Home Affairs | 123 | 776 | $14.5m |
| Human Services | 71 | 832 | $30.5m |
| Industry, Innovation and Science | 76 | 198 | $57.8m |
| Infrastructure, Regional Development and Cities | 45 | 120 | $10.2m |
| Jobs and Small Business | 59 | 294 | $25.0m |
| Parliamentary Departments | 19 | 43 | $8.0m |
| Prime Minister and Cabinet | 46 | 650 | $43.6m |
| Social Services | 36 | 102 | $21.1m |
| Treasury | 132 | 356 | $42.5m |
| Veterans' Affairs | 30 | 85 | $4.5m |
| Total Commonwealth | 1,642 | 7,264 | $754.2m |
| Commonwealth portfolio performance against 2018-19 targets | |||
- For details of how portfolios may 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 | 2019-20 procurement Number target (3% of number of eligible contracts*) | 2019-20 procurement Value target (1% of value of eligible contracts*) |
|---|---|---|
| Agriculture | 40 | $3.5m |
| Attorney-General's | 69 | $2.7m |
| Communications and the Arts | 18 | $0.8m |
| Defence | 691 | $98.8m |
| Education | 31 | $7.9m |
| Employment, Skills, Small and Family Business | 49 | $4.3m |
| Environment and Energy | 68 | $4.3m |
| Finance | 49 | $2.8m |
| Foreign Affairs and Trade | 57 | $5.4m |
| Health | 78 | $8.5m |
| Home Affairs | 100 | $11.1m |
| Industry, Innovation and Science | 72 | $6.5m |
| Infrastructure, Transport, Cities and Regional Development | 38 | $2.9m |
| Parliamentary Departments | 17 | $1.5m |
| Prime Minister and Cabinet | 41 | $1.9m |
| Services Australia | 83 | $16.8m |
| Social Services | 30 | $3.2m |
| Treasury | 131 | $12.4m |
| Veterans' Affairs | 36 | $2.5m |
| Total Commonwealth | 1698 | $201.2m |
* For details on how targets are calculated targets refer to the Indigenous Procurement Policy
Mandatory set aside results
The mandatory set-aside (MSA) requires Indigenous businesses to be approached first to quote on contracts delivered in remote areas and for all other contracts wholly delivered in Australia valued between $80,000‑$200,000.
Indigenous businesses are winning more contracts under the MSA year on year. Due to data limitations NIAA is unable to exclude ineligible contracts from the analysis (i.e. contracts awarded that were subject to an exemption) prior to 1 July 2018 therefore actual performance as a percentage is higher than the reported figure.
| 2015-16 | 2016-17 | 2017-18 | 2018-19 | ||
|---|---|---|---|---|---|
| Number of new IPP contracts valued at $80,000–$200,000 and listed on AusTender | 132 | 224 | 296 | 427 | |
| Number of new IPP contracts, valued between $80,000–$200,000, as percentage of total listed on AusTender | 1.4% | 2.5% | 3.2% | 4.9% | |
| Value of new IPP contracts valued at $80,000–$200,000 and listed on AusTender ($ million) | $16.9 | $28.5 | $38.5 | $53.9 | |
| Value of new IPP contracts valued between $80,000–$200,000, as percentage of total value of these contracts listed on AusTender | 1.4% | 2.5% | 3.1% | 3.6% | |
MSA notes:
- Under the IPP, the MSA applies to all contracts delivered in remote areas regardless of value. Contracts delivered in remote areas that also meet the MSA threshold are counted twice.
- These figures represents the minimum possible result.
- A map defining remote areas is available.
Remote performance
Our data for remote Australia is incomplete. NIAA continues to work with portfolios to develop better systems to collect this data, which currently needs to be manually identify and reported.
| 2015-16 | 2016-17 | 2017-18 | 2018-19 | ||
| Number of new contracts delivered in remote areas | 198 | 602 | 892 | 579* | |
| Value of new contracts delivered in remote areas ($ million) |
$25.3 | $79.9 | $110.2 | $34.2* |
*Collecting remote contracts data is a manual process and is still underway.
These figures represent what has been collected up to 4 December 2019 and will be updated once the collection is complete.
Minimum Indigenous participation requirements for Indigenous workforce and/or supply targets (MMR)
Since 1 July 2016, 137 contracts valued at $9.2 billion awarded to 79 organisations have had minimum mandatory requirements (MMR) in place.
MMR targets currently apply to contracts wholly delivered in Australia valued at or above $7.5m that are awarded in 8 industries.
From 1 July 2020 the MMR will be expanded to cover an additional 11 industry categories. These additional categories will apply to Approaches to Market undertaken from 1 July 2020.
MMRs currently apply to the following eight industry categories:
- 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 MMR will be expanded to cover 19 industry categories. The additional 11 industries, which will apply to Approaches to Market undertaken from 1 July 2020 are:
- 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 Changes to the IPP page and UNSPSC policy guide.
