Indigenous Procurement Policy
The Indigenous Procurement Policy (IPP) is a mandatory procurement-connected policy under the instrument of the Commonwealth Procurement Rules. The purpose of the 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. The IPP was launched on 1 July 2015 and has three main parts:
- A target number of contracts that need to be awarded to Indigenous businesses.
- A mandatory set-aside for remote contracts and contracts valued between $80,000 - $200,000.
- Minimum Indigenous participation requirements in contracts valued at or above $7.5m in certain industries.
From 1 July 2019, to ensure Indigenous businesses win higher value contracts at a level closer to those of non-Indigenous businesses, a target based on the value of contracts awarded will be introduced. The target will be set at one per cent in FY19-20 and will be increased by 0.25 per cent each year until it reaches three per cent in 2027.
From 1 July 2020, Indigenous participation targets will be mandatory in high value contracts across more specified industries. Further details will be released in the coming months on which industries will be covered by these changes.
Source: Department of the Prime Minister and Cabinet - Australian Government 2019