Author
-
Andrew Gibson
Published
27/11/2020
Harness purchasing power to achieve real change for Indigenous Australians.
The Commonwealth Indigenous Procurement Policy was established in 2015 with the remit of increasing opportunities for Indigenous Australians to develop business and growing economic participation.
The Indigenous Procurement Policy is constructed of three concepts:
Commonwealth and Portfolio Targets
While presenting the 2020 Closing the Gap Report, the Prime Minister announced a target of 3% of all Commonwealth procurement expenditure to be contracted to Indigenous owned providers by 2027. The 2020-21 target is for 1.25% of all Commonwealth procurement contracts to be awarded to Indigenous-owned businesses. The target will increase by 0.25% annually until 2027-28 when the 3% goal will be met.
Mandatory Set-Aside
Commonly referred to as MSA, the Mandatory set-aside requires the consideration of contracting with an Indigenous-owned business prior to any other contracting method, where:
- The goods or services are being delivered in a remote area, and/or
- The contract is valued between $80,000 and $200,000 and the goods or services are being wholly-delivered in Australia
The requirement to demonstrate value for money remains.
Mandatory Minimum Indigenous Participation Requirements
The Mandatory Minimum Indigenous Participation Requirements, referred to as the MMRs, apply to all procurements that are valued over $7.5 million across 19 prescribed industries. The MMRs require contracted organisations to implement a plan, under the contract to either:
- Meet a contract-based target of 4% Indigenous employment and/or supply chain, or
- Meet an organisation-based target of 3% Indigenous employment and/or supply chain.
Under exemption 16 of the Commonwealth Procurement Rules (CPRs), procurement of goods and services from an SME with at least 50% Indigenous ownership, is exempt from Division 2 of the CPRs.
Why should you consider Indigenous Procurement in your procurement plan?
- Procurement from Indigenous providers directly contributes to Australian industry participation
- You are contributing to your agency’s Indigenous procurement targets
- It can simplify your procurement approach and the resources required by applying exemption 16 or the MSA
- Benefit to the wider Indigenous community through opportunities for employment
To learn more about Indigenous businesses visit supplynation.org.au.
