Over the first eight years of the Indigenous Procurement Policy (IPP), half of all contracts over $10,000 were awarded to just 11 organisations, according to a new research article that delves into the distribution of Commonwealth public procurement contracts awarded to Indigenous businesses.
Published in the Australian Journal of Public Administration, the ‘Who defines success? A critical analysis of the Indigenous Procurement Policy’ article is one of the most comprehensive analyses of the IPP since its launch in 2015.
Authored by Christian Eva, Research Fellow at The National Australian University, the research reveals 50 percent of the total value of all contracts was awarded to only 18 businesses, with more than 40 percent of the number and 30 percent of the value of contracts awarded to businesses based in Canberra.
Elsewhere, nearly half (47 percent) of the total value of all contracts was awarded to businesses of between 50 percent and 51 percent Indigenous ownership, with an additional 27 percent awarded to businesses with unidentified Indigenous ownership status.
The article points out that the IPP has been successful in exceeding its Indigenous procurement targets, but suggests the way these targets are being met reveals limitations in the policy design.
To remedy this, the article’s author suggests incorporating Indigenous-defined measures of success in the design of the IPP and adequately pricing the social value creation of Indigenous firms, which he claims may better reflect the social and economic aspirations of the IPP.
Additional recommendations include enhancing Indigenous governance over how the IPP operates, including developing a “more robust, workable and culturally accountable definition of an Indigenous business” to ensure the IPP delivers on Indigenous-defined metrics for success.
The IPP has proved to be a hot topic over the past week, with Professor Marcia Langton AO urging the Commonwealth Government to examine and restore the IPP to its original standards while ending departmental exemptions.
Speaking at the Aboriginal Enterprises in Mining, Energy and Exploration (AEMEE) Conference in Darwin, Langton said recent changes have undermined accountability across government spending and weakened the policy’s intent, as reported exclusively by The Indigenous Business Review (IBR).
“Seventy percent of Commonwealth spending is now exempt from the Indigenous Procurement Policy. Departments simply write their own exemptions because they do not want to deal with us,” said Langton, as quoted by the IBR.
“Every department should procure Indigenous goods and services, and report on them in full. That means reporting on the number and value of contracts, and the number of Indigenous people employed – not vague indicators.”
This is a view backed by Eva, who points out there is very little data available to assess the impact of the IPP beyond portfolio-level spending reported by the National Indigenous Australians Agency.
Langton, who advised Andrew Forrest during his review of Indigenous employment and training under the Abbott government, said procurement policy is the lever that drives employment and enterprise growth.
“When the rules are clear and enforced, Indigenous business flourishes,” she said.
“Each of these reforms aimed to give Indigenous people greater control over their economic futures, but policy drift and bureaucratic interference have continued to slow progress.”
