In 2015, the Australian Government introduced its Indigenous Procurement Policy to encourage increased Indigenous involvement in the economy and flow-on effects for quality of life outcomes in domains such as health, social engagement, education and skills. 

The purpose of the evaluation was to examine if the policy settings have been appropriate and effective in leveraging the Commonwealth’s annual multi-billion dollar procurement spend to provide the intended contract opportunities for Indigenous businesses. 

The evaluation examined evidence to determine if the policy:

• had been effective in generating government demand for delivery of goods and services by Indigenous businesses
• had been implemented effectively by Commonwealth portfolios
• had in place effective governance arrangements to appropriately support its application and use.

The evaluation took a mixed methods approach that included analysis of administrative data, focus groups, surveys and interviews. 

The evaluation concluded that overall the policy had a positive effect on Indigenous business and supported its rapid growth. However, there is a risk that unintended consequences may arise as a result of perceived externalities and there is still work to be done to further improve the policy settings and the resulting outcomes for Indigenous people and communities. 

The report includes nine recommendations for refining the policy settings and improving the outcomes delivered by the Indigenous Procurement Policy. 

Key Findings

• There is a need to address black cladding, the practice of non-Indigenous companies either creating business structures to qualify as an Aboriginal business or attempting to misrepresent themselves.
• The definition of Indigenous ownership should be amended to require at least 50% Indigenous ownership and at least 50% Indigenous control of the company.
• State-based trade shows offer an opportunity to raise awareness of the policy.
• There is a need for education and engagement on both sides of the procurement equation, including to shift mindsets from a compliance-based model of operating to one of designing a collaborative process.
• One of the issues often faced by both the Commonwealth and Indigenous businesses is the ability to clearly and concisely demonstrate capability to deliver on contracts.