Federal procurement and the Indigenous Procurement Policy

The framework

Commonwealth procurement activities are governed by the Commonwealth Procurement Rules (CPRs). These rules are issued under the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

Most Commonwealth entities are required to adhere to the CPRs when procuring goods and services that exceed specified value thresholds. These thresholds determine when the CPRs apply to procurement processes.

Tender opportunities for Commonwealth procurement are typically published on AusTender, a publicly accessible website.

Core principles

The Commonwealth Procurement Rules (CPR) establish fundamental guidelines for all Australian Government procurement activities. Value for money is the central principle underpinning these rules, ensuring that public resources are used effectively. All procurement processes must also actively encourage competition and be conducted in a manner that is efficient, effective, economical, ethical, and accountable.

Procurement activities are expected to adhere to these principles regardless of size. However, Specific Mandatory Procurement Procedures are triggered when procurement expenditure exceeds defined thresholds. These procedures mandate processes such as conducting open tenders, evaluating submissions against predetermined criteria, and obtaining necessary approvals.

These procedures are designed to ensure transparency and fairness in government procurement, and to maximise the value received for public funds.

Indigenous Procurement Policy (IPP)

The Indigenous Procurement Policy (IPP) is a Commonwealth policy designed to complement the Commonwealth Procurement Rules (CPRs). It aims to increase the participation of Indigenous businesses in Australian government contracts. The policy includes targets relating to both the number of contracts awarded to Indigenous businesses and the total value of those contracts.

Certain procurements are subject to Mandatory Minimum Indigenous Participation Requirements. These requirements apply to contracts exceeding specified value thresholds and within particular industries identified as high-volume. These requirements are designed to ensure a baseline level of Indigenous business involvement in government projects. compliance calendar tool

Supply Nation serves as the recognised registry for Indigenous-owned businesses for the purposes of the IPP. Government agencies must use this registry to verify the Indigenous ownership status of businesses bidding for contracts.

Other mandatory procurement policies

Commonwealth procurement activities are subject to several mandatory policies beyond the Indigenous Procurement Policy. These policies aim to ensure responsible and ethical practices across government spending. Compliance is a requirement for suppliers seeking to engage with the Commonwealth.

Building and construction procurement is governed by specific requirements. Commonwealth-funded construction projects must adhere to the Building Code and the Workplace Relations Management Plan requirements. Similarly, Commonwealth entities are obligated to consider modern slavery risks within their procurement processes and to report publicly under the Modern Slavery Act 2018 (Cth).

Procurement activities are also shaped by ICT sustainability and other category-specific policies. Suppliers should anticipate questions relating to these policies during the tender process and understand that adherence will be a contractual obligation should they be awarded a contract.