Indigenous Procurement Policy

The Australian Government’s Indigenous Procurement Policy (IPP) is a mandatory procurement-connected policy under the legislative instrument of the Commonwealth Procurement Rules.

Administered by the National Indigenous Australians Agency (NIAA) 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.

Since 2018, almost 600 contracts have been awarded to Indigenous SMEs through the DTAs Digital, Hardware, and Software marketplaces, with a 1300% increase in contracted value from 2018-19 ($13M) to date ($188M).

Prior to the implementation of the policy, Indigenous businesses secured limited business from Commonwealth procurement. The policy is intended to significantly increase the rate of purchasing from Indigenous businesses.

How the IPP works:

• Annual targets for the volume and value of contracts to be awarded to Indigenous businesses by the Commonwealth and each Portfolio.
• 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).
• 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:

• An increase in the number of Indigenous businesses awarded a contract
• An increase in the volume and value of contracts awarded to Indigenous businesses.

Useful links:

 Indigenous Procurement Policy (IPP) | NIAA

 Remoteness Areas | Australian Bureau of Statistics

IPP Exemption 16

Procuring from an Indigenous-owned business is the easiest and fastest way for Federal Government departments or entities to procure goods or services.

IPP businesses are given the opportunity to demonstrate value for money before a general approach to market. The applies to procurements to be delivered in remote Australia and for all other procurements wholly delivered in Australia valued between $80,000‑$200,000 INC GST.

Provided you can demonstrate value for money and are sure the supplier can deliver, exemption 16 allows you to procure up to any value of an item provided you get the appropriate level sign-off.

A great solution for urgent supply of products or services or when managing multiple procurements.

Whilst mandatory threshold limits are in place, exemption 16 allows you to procure items over your department’s threshold.

Kirra Services has the highest Supply Nation accreditation at the certified level with over 50 per cent Indigenous ownership by our managing director Brad Nagle who actively works in the business.

We have a commitment to Indigenous give back, using profit for purpose to deliver positive outcomes through our community programs.

Frequently Asked Questions:

What is the exact amount a government agency can procure before a general approach to market?

The IPP includes a mandatory set aside requiring Indigenous businesses be given an opportunity to demonstrate value for money before a general approach to market when procurements are between $80,000‑$200,000 Inc GST or the contract is to be delivered in remote Australia.

Is there any limit?

• Commonwealth departments do not have any limits on the number or value of First Nation procurements they make.
• Each department may have their own procurement rules. This may place additional targets or requirements on procuring officials.
• Exemption 16 of the Commonwealth Procurement Rules can be used to purchase goods and services of any VALUE in any industry without going to market, provided the organisation can demonstrate value for money. This exemption only applies to Small and Medium Indigenous enterprises (businesses with less than 200 full-time equivalent staff).
• Indigenous employment and business participation targets are also applied to contracts valued at $7.5 million or more in 19 industries.

How can departments purchase via the IPP?

• The Commonwealth has developed Coordinated Panel Arrangements. These cover items such as travel, IT, recruitment and legal services. They are managed by the DTA, Department of Finance, and Attorney-General’s Department.

• Cooperative Procurement Arrangements are optional so Exemption 16 and the Mandatory Set Aside can be used for any goods or services listed. E.g. software.

Do I need to get 1 or 3 quotes?

• The policy does not specify a required number of quotes.
• The policy requires that they demonstrate value for money.
• In order to establish value for money they may seek a number of quotes.N