The Commonwealth government has hit the accelerator on its Indigenous Procurement Policy, having successfully encouraged its public servants to buy a lot more goods and services from Indigenous-owned suppliers in recent years.
The Australian Public Service will now aim to award 3% of the total number of contracts to Indigenous-owned companies, a target that was originally set for 2020.
Minister for Indigenous Affairs Nigel Scullion said the target was being brought forward due to the “extraordinary success” of the IPP, which has seen spending with Indigenous-owned businesses increase dramatically and smash the 2015-16 target of 0.5% of domestic procurement contracts.
Scullion said the first target “acknowledged the very low base, given the Commonwealth procured only $6.2 million from Indigenous businesses in 2012-13” and the results were much better than expected:
“I am pleased to say that in just our first year we have far surpassed the targets. Under the Coalition’s new procurement policy, the Commonwealth has awarded more than 1500 direct and indirect contracts to almost 500 Indigenous businesses worth a total of more than $284 million.
“This is almost 46 times the value of Indigenous contracts awarded by the Commonwealth in 2012-13.
“… This achievement shows the wealth of innovative, entrepreneurial Indigenous businesses ready to deliver goods and services all over Australia and the IPP’s ability to change long-standing government purchasing behaviour.”
The minister called on state and territory governments to follow suit with their own similar policies and said he would continue to bring up the issue in the Council of Australian Governments.
Just over half of the federal government’s spending with Indigenous-owned suppliers was for building, construction and maintenance contracts, but suppliers of ICT products as well as recruitment, legal and financial services have also won business under the IPP.
The government also introduced Indigenous employment targets for the APS at the same time as the IPP but success has been mixed, according to the latest Closing the Gap report, which was released yesterday with great fanfare. A detailed breakdown in the new report shows each agency’s progress towards its own target, and an overall figure of 2.4% Indigenous representation against a target of 3%.