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:

1. Annual targets for the volume and value of contracts to be awarded to Indigenous enterprises by the Commonwealth and each Portfolio.
2. 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).
3. 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:

1. An increase in the number of Indigenous businesses awarded a contract
2. 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 $5.3 billion in contracting opportunities for Indigenous businesses. This has involved over 35,763 contracts awarded to more than 2,140 Indigenous businesses. Detailed data for 2020-21 Commonwealth Indigenous procurement outcomes is available at:

More information can be found at: https://www.niaa.gov.au/indigenous-affairs/economic- development/indigenous-procurement-policy-ipp