The procurement gap: boost for indigenous-owned firms

An exemption in the Commonwealth procurement rules allows more contracting of indigenous-owned companies to boost Aboriginal employment. But it’s all too rarely used.

A change to Commonwealth procurement rules in 2011 created a powerful way for the federal bureaucracy to help close the gap by giving more work to indigenous-owned companies. But it wasn’t used until June this year.

Under exemption 17 to the rules, companies with under 200 employees that are at least half indigenous-owned can be contracted without going to the full tender process normally required for goods and services worth over $80,000.

The first time it was used — a $6 million Defence contract awarded to Pacific Services Group Holdings, owned by Wiradjuri men Shane Jacobs and Troy Rugless — was hailed as “a significant step forward on the Prime Minister’s path to practical reconciliation” by Defence Minister David Johnston. Parliamentary Secretary to the Prime Minister Alan Tudge said at the time:

“Contracting indigenous businesses is one of the best ways government and corporate Australia can support indigenous advancement. Not only does it encourage entrepreneurship, but indigenous businesses are 100 times more likely to employ indigenous people.”

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