Goverment updates Indigenous Procurement Policy

From 1 July 2026, Indigenous sellers to government will need to be 51% or more First Nations owned and controlled (or registered with the Office of the Registrar of Indigenous Corporations) to access procurement opportunities via the Indigenous Procurement Policy (IPP).

The primary purpose of the Indigenous Procurement Policy is to stimulate Indigenous entrepreneurship, business and economic development, providing First Nations people with more opportunities to participate in the economy.

Prior to the implementation of the policy, Indigenous enterprises secured limited business from Commonwealth procurement. The policy is intended to significantly increase the rate of purchasing from Indigenous enterprises.

All non-corporate Commonwealth entities must comply with this policy.

The policy sets annual targets for purchasing from Indigenous enterprises, currently at 3% and increasing by 0.25% each year to 4% by 2030, as well as a Mandatory Set Asidethat requires buyers to give Indigenous businesses an opportunity to demonstrate value for money before they conduct a general approach to market.

This applies for procurements delivered in remote Australia and for all procurement delivered in Australia valued between $80,000 and $200,000 (GST inclusive).

To ensure Indigenous businesses have sufficient time to obtain verification under the new criteria, transitional arrangements will apply for the 2026-27 financial year.

Under these arrangements, Indigenous businesses will be eligible if they meet either the original eligibility criteria (50% Indigenous ownership) or the strengthened criteria (51% Indigenous ownership and control).

At the end of the transition period, Indigenous businesses must meet the strengthened IPP criteria to access the IPP.

Since 2015 and as at February 2026, the IPP has generated over $13.5 billion in contracting opportunities for Indigenous businesses. This has involved over 86,000 contracts awarded to more than 4,700 Indigenous businesses.

From November 2025, rules for procurement changed to require that only Australian businesses be invited to tender for government contracts valued below $125,000. The increase in the threshold for open tendering, from $80,000 to $125,000, was the first time the threshold had been increased in over 20 years.