How is an Indigenous Procurement Policy applied?

The Commonwealth government's Indigenous Procurement Policy is intended to significantly increase the rate of government purchasing from First Nations enterprises, providing First Nations with more opportunities to participate in the economy.

The Mandatory Set Aside (MSA) requires that First Nations businesses be given an opportunity to demonstrate value for money before a general approach to market. The MSA applies to procurements delivered in remote Australia and for all other procurements wholly delivered in Australia valued between $80,000 ‑ $200,000 (GST inclusive).

First Nations 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).

The ACT's Aboriginal and Torres Strait Islander Procurement Policy (2019) seeks quotes from relevant Aboriginal and Torres Strait Islander enterprises to be sourced wherever possible, with a target of 2% of the Government financial year’s addressable spend to be with Aboriginal and Torres Strait Islander enterprises, including:

• Aboriginal and Torres Strait Islander small to medium enterprises (SMEs) have the capacity and capability to deliver individually; and
• Aboriginal and Torres Strait Islander enterprises as sub-contractors on large projects.

The procurement policy aims to support the objectives of the ACT Aboriginal and Torres Strait Islander Agreement 2019-2028.

NSW's Aboriginal Procurement Policy (2021) applies to the procurement of all goods and services, including construction, by a government agency. It defines an Aboriginal business as one that has at least 50% Aboriginal ownership and is recognised through an appropriate organisation, such as Supply Nation or the NSW Indigenous Chamber of Commerce (NSWICC). The NSW Procurement Board is responsible for the administration, monitoring and reporting of this policy.

Key features include:

• NSW Government agencies should give first consideration to Aboriginal businesses for procurements up to $250,000 where feasible
• Agencies must include minimum requirements for 1.5% Aboriginal participation in all contracts valued at $7.5 million or above
• Tenderers must submit an Aboriginal Participation Plan during the procurement process that sets out how the tenderer plans to meet the Aboriginal participation requirements
• Training Services NSW has established the Aboriginal Participation Fund to receive payments when a supplier does not meet contracted Aboriginal participation requirements.

The NT's Aboriginal Procurement Policy (2022) applies to government contracts valued at $15,000 or more. The policy is part of the Aboriginal Economic Participation Framework (2022-32). 

Key features include:

• By 2022-23, 5% of the total number of NT Government contracts be awarded to Aboriginal Business Enterprises, and 5% of the annual total
  NT Government contract value be awarded to Aboriginal Business Enterprises

Queensland’s Indigenous Procurement Policy (2017) aims to increase procurement with First Nations businesses to 3% of the value of government procurement contracts by 2022. By 2022-23, the addressable spend percentage with Indigenous businesses was 2.21%.

The Department of Aboriginal and Torres Strait Islander Partnerships (DATSIP) is the lead department for the Indigenous Procurement Policy and its implementation. DATSIP collaborates with the Office of the Chief Advisor – Procurement (OCA-P) and budget sector agencies.

In 2017 South Australia’s Aboriginal Economic Participation Strategy (2017) was embedded in the state's Industry Participation Policy, which provides opportunities for First Nations business procurement across all procurement levels under a single comprehensive framework.

The Office of the Industry Advocate is a Statutory Authority and the Industry Advocate Act 2017 provides the Office with the power to investigate contract non-compliance and act in accordance with through the enforcement strategy.

Key features include:

• If the procurement presents an opportunity for Aboriginal businesses, the Public Authorities should consider seeking a quote from an eligible Aboriginal business or directly engaging an eligible Aboriginal business if the procurement is value up to and including $550,000. This includes but is not limited to contracts delivered in APY Lands.

• Under the Industry Participation Policy:

  • Agencies can procure directly from businesses listed on South Australia’s online Aboriginal Business Register for goods and services up to the value of $220,000
  • For tenders greater than $220,000, the Industry Participation weighting of tenders can be lifted so Aboriginal businesses, and businesses with high Aboriginal employment or subcontracting, are more likely to win tender contracts.

Victoria's Social Procurement Framework (2018) includes key outcomes of increasing contracting opportunities for Aboriginal businesses, including purchasing from Victorian Aboriginal businesses and/or employment of Victorian Aboriginal people by suppliers to the Victorian Government. The Victorian Government has set a target of 1% of government procurement from small to medium enterprises to be from Aboriginal businesses.

Key features include:

• For individual procurement activities valued below $1 million (regional) or $3 million (metro or State-wide) (exclusive of GST), government buyers seek opportunities to directly or indirectly procure from Victorian Aboriginal businesses.
• For individual procurement activities valued at or above $1 million (regional) or $3 million (metro or State-wide) up to $20 million (exclusive of GST), government buyers consider whether part of the procurement can be unbundled for delivery from Victorian Aboriginal businesses.
• For individual procurement activities valued at or above $20 million (exclusive of GST), government buyers set targets for supplier expenditure with Victorian Aboriginal businesses and ask suppliers to demonstrate how they will meet such targets.

The Department of Finance is responsible for administering Western Australia’s Aboriginal Procurement Policy (2023) and guidelines.

Key features include:

• State agencies are required to award 4% of their total contracts to registered Aboriginal businesses and/or Aboriginal Community Controlled Organisations (ACCOs) each financial year
• Aboriginal participation requirements apply to all contracts with an estimated contract value of $5 million and above where a contract will be delivered predominantly to Aboriginal people or target the specific needs of Aboriginal people, or delivered in the construction and maintenance, community and social services, education and training, and public administration and finance industries
• The Aboriginal business / ACCO subcontracting target requires suppliers to subcontract 4% of the total contract value to registered Aboriginal business(es) or ACCO(s). Only packages of work awarded to subcontractors contracted directly by the supplier will count towards the target.
• The Aboriginal employment target requires suppliers to engage from 2-10% of the total number of the contract labour force of Aboriginal persons in each year of contract delivery.