Guides / AU procurement / Indigenous Procurement Policy

Indigenous Procurement Policy

Three mechanisms, three value bands. Read which one your tender sits in.


The Indigenous Procurement Policy sets aside certain Commonwealth work for First Nations businesses and attaches participation targets to large contracts. Which mechanism fires depends on value, place, and industry. Part of our guide on Australian government procurement.

Published: 16 September 2026 · By Bill · Reviewed by Andre · selrob

Takeaways

  • The Mandatory Set Aside covers remote delivery at any value, and $80,000–$200,000 work delivered wholly in Australia.
  • Participation requirements attach at $7.5 million in 19 industries: employment and subcontracting you must evidence.
  • None of this applies to every tender. Read the pack for which mechanism, if any, it invokes.

What are the three mechanisms?

First, portfolio targets: annual volume and value targets for contracts awarded to Indigenous businesses: 3 percent on both number and value for 2025–26. Targets drive buyer behaviour across the year; they do not decide your tender directly.

Second, the Mandatory Set Aside: Indigenous businesses must be given the opportunity to demonstrate value for money before a general approach to market, for procurements delivered in remote Australia regardless of value, and for all other procurements wholly delivered in Australia valued between $80,000 and $200,000 GST inclusive. If your tender sits in that band and you are not an Indigenous business, the open competition you expected may never happen.

Third, Mandatory Minimum Indigenous Participation Requirements: contracts wholly delivered in Australia valued at $7.5 million or more, in 19 specified industries, carry Indigenous employment and business participation targets. These figures are from the May 2026 edition of the policy; recheck the current NIAA pages before you bid, as thresholds and industry lists move.

What does each mean for your response?

In a set-aside band, non-Indigenous firms should check whether the procurement is proceeding as a general approach at all, and Indigenous firms should be registered, visible, and ready to demonstrate value for money when approached. Exemption 16 of the CPRs lets portfolios procure directly with Indigenous SMEs that demonstrate value for money: a genuine door, not a formality.

Under participation requirements, the response must evidence employment and subcontracting commitments with numbers that survive contract management; model clauses and reporting solutions exist for this, and the buyer will use them. Do not invent a partnership on Thursday to clear a Friday mandatory. If the subcontractor, the employment pipeline, or the remote presence is not held today, the gate is no-bid.

The checklist

  • Band. Remote delivery, $80k–$200k, $7.5m-plus in a listed industry, or none of these.
  • Mechanism. Set-aside, participation targets, portfolio targets only, or policy silent.
  • Evidence. Registration, employment commitments, subcontractor arrangements, held today.
  • Delivery cost. Participation commitments priced into the offer, with reporting resourced.

What does this mean for the bid/no-bid call?

A set-aside band without Indigenous status is a no-bid made in minutes; the competition is not open to you. A participation requirement without evidenced commitments is a no-bid made after reading the schedules. A policy-silent tender is business as usual, and the general treatment of policy criteria is on local content, SME and Indigenous targets. The rules underneath are the Commonwealth Procurement Rules.

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