Overview
Contractors may request to apply a single 3% ‘organisation-based’ MMR target across their Australian operations in lieu of one or more contract-based targets.
The organisation target may benefit companies with multiple MMR contracts where it is easier to apply a single minimum Indigenous participation requirement across their Australian operations as a whole, rather than having to consider whether their distribution of Indigenous personnel is consistent with various Commonwealth contractual arrangements. This approach also avoids Indigenous employees being arbitrarily moved to ensure contractual requirements are met.
The scope of the contractor’s organisation-based reporting must be outlined in the contractor’s Indigenous Participation Plan and be agreed with the awarding Commonwealth Agency, consistent with a good faith application of the Indigenous Procurement Policy.
Organisation-Based Requirements
As outlined in the Commonwealth Indigenous Procurement Policy the requirements for organisation-based assessment is as follows:
A) By the end of the initial term of the contract, at least 3% of the full time equivalent Australian-based workforce of the contractor must be Indigenous Australians, on average over the initial term of the contract; OR
B) By the end of the initial term of the contract, at least 3% of the value of the contractor’s Australian supply chain must be subcontracted to Indigenous enterprises, on average over the initial term of the contract; OR
C) By the end of the initial term of the contract, a minimum percentage of the full time equivalent Australian-based workforce must be Indigenous Australians, and a minimum percentage of the value of the contractor’s supply chain must be subcontracted to Indigenous enterprises, such that both minimum percentages add up to 3% on average over the initial term of the contract.
For an organisation-based MMR target:
- 'workforce' means: the Australian-based workforce of the contractor organisation.
- 'supply chain' means: the value of the contractor organisation's Australian supply chain that is subcontracted/purchased from Indigenous-owned businesses.
How is final compliance with MMR targets calculated?
For organisation-based workforce and supply chain targets, final performance against the MMR target is calculated based on a weighted average over the term of the contract. Example compliance calculations for the final performance of workforce and/or supply chain performance are found below:
Example 1 - Calculations for a MMR organisation-based workforce target
Performance against an organisation-based workforce MMR target is calculated at the end of the contract. It is based on a weighted average over the term of the contract. The calculation used is Organisation Indigenous Workforce ÷ Total Organisation Workforce x 100, as shown in the sample below:
| Quarter (Q) | Total Organisation Workforce (FTE) | Organisation Indigenous Workforce (FTE) |
|---|---|---|
| Q1 | 500 | 17 |
| Q2 | 500 | 14 |
| Q3 | 499 | 16 |
| Q4 | 503 | 17 |
Final Compliance Calculation
Total Indigenous Workforce (Q1+Q2+Q3+Q4) ÷ Total Organisation Workforce (Q1+Q2+Q3+Q4)
= 17+14+16+17 ÷ 500+500+499+503
= 64 ÷ 2002 x 100
= 3.20%
For compliance purposes, the final MMR performance is compliant if it meets or exceeds the MMR target.
Example 2 - Calculations for a MMR organisation-based supply chain target
Performance against an organisation-based supply chain target is calculated at the end of the contract. It is based on a weighted average over the term of the contract. The calculation used is Supply chain spend to Indigenous Businesses to date ÷ Australian supply chain spend to date x 100, as shown in the sample below:
| Quarter (Q) | Total Australian supply chain spend for quarter ($AUD) | Supply chain spend to Indigenous Businesses for quarter ($AUD) |
|---|---|---|
| Q1 | $1,600,000 | $50,000 |
| Q2 | $1,600,000 | $40,000 |
| Q3 | $700,000 | $50,000 |
| Q4 | $1,500,000 | $60,000 |
Final Compliance Calculation
Total Supply chain spend to Indigenous Businesses (Q1+Q2+Q3+Q4) ÷ Total Australian supply chain spend (Q1+Q2+Q3+Q4)
= $50,000+$40,000+$50,000+$60,000 ÷ $1,600,000+$1,600,000+$700,000+$1,500,00
=$200,000 ÷ $5,400,000 x 100
= 3.70%
For compliance purposes, the final MMR performance is compliant if it meets or exceeds the MMR target
Organisation-Based Process Flow
The following diagram details the process flow of organisation-based reporting and the roles/persons responsible at each stage.
