Aboriginal businesses

Procurement policies aim to support 3,000 employment opportunities for Aboriginal people by 2021.
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What you need to know
  1. You must comply with the NSW Government’s Aboriginal Procurement Policy (APP) and Aboriginal Participation in Construction Policy (APIC).
  2. This includes considering Aboriginal-owned businesses for contracts under $250,000.
  3. We’ve also made it easier for you to engage Aboriginal businesses on construction contracts valued up to $1 million.
  4. On goods and services contracts over $10 million, suppliers must consider opportunities for Aboriginal participation.
  5. For construction contracts over $1 million, suppliers must direct 1.5% of the project value to Aboriginal participation.
  6. Your agency must also develop an annual Aboriginal Participation Strategy with measurable targets for increasing Aboriginal participation.
  7. Your suppliers also have obligations under the APP and APIC which you must enforce.
  8. The NSW Government reports on progress against the APP and APIC.

Supporting Aboriginal people of NSW

The NSW Government’s Aboriginal Procurement Policy (APP) and Aboriginal Participation in Construction Policy (APIC) aim to create 3,000 full-time jobs for Aboriginal people by 2021. To help us achieve this aim, you must comply with the APP and APIC in all your procurement activities.

The APP will aim for Aboriginal-owned businesses to be awarded at least 3% of the total number of domestic contracts for goods and services issued by NSW Government agencies by 2021.

The APIC policy sets minimum requirements for Aboriginal participation on relevant construction contracts.

Encourage Aboriginal suppliers

We’ve introduced new rules for awarding contracts under $250,000 to encourage you to use Aboriginal-owned businesses.

Goods and services contracts

For contracts under $250,000 you should first consider buying from an Aboriginal business on a prequalification scheme. You may buy directly from them based on one written quote.

If there’s no prequalification scheme for the goods and services, you can negotiate directly with a suitable Aboriginal business.

As many Aboriginal businesses are SMEs, the SME and Regional Procurement Policy may also provide opportunity.

Construction contracts

For contracts up to $250,000, you can negotiate directly with qualified Aboriginal-owned businesses.

For contracts up to $1 million, you can invite multiple Aboriginal businesses on a prequalification scheme to apply for a selective tender.

Aboriginal procurement policy

The Aboriginal Procurement Policy aims for at least 3% of the total number of the government’s goods and services contracts to be awarded to Aboriginal businesses by 2021.

Aboriginal Participation Strategy

Your cluster or agency must develop an annual Aboriginal Participation Strategy, either as an individual agency or as part of a cluster. Publish this on your agency or cluster website.

This strategy must:

  • provide public commitment to working with Aboriginal businesses to grow the 'First Economy of NSW’.
  • explain how your cluster or agency is identifying and developing business and employment opportunities for Aboriginal people
  • set measurable targets for Aboriginal participation, including targets for specific categories of procurement and Aboriginal workforce strategies where appropriate
  • report the outcomes including both positive and negative results.

Major goods and services procurements

In any goods and services procurement over $10 million, you must consider for Aboriginal participation. This can include sub-contracting, employment and training activity. You must:

  • require suppliers to include an Aboriginal Participation Plan in their tender response
  • set evaluation criteria for Aboriginal participation
  • include the commitments suppliers make in their Aboriginal Participation Plan in the contract
  • require suppliers to report monthly on Aboriginal participation once the contract is awarded.

You should work with suppliers, Aboriginal businesses and Aboriginal representative bodies to identify ways to increase Aboriginal participation. Do this as early as possible in the planning stages.

The NSW Procurement Board may also allocate specific targets for Aboriginal participation for both contracts and procurement categories.

Reporting requirements

The NSW Government will monitor compliance with the APP, so that there’s consistency across all departments and agencies.

You must disclose every contract valued over $50,000 your agency enters into with an Aboriginal business. You must do this within 45 days of the contract start date.

You must, for contracts where you’ve included Aboriginal participation requirements, ensure suppliers provide:

  • a final Aboriginal participation plan at the start of the contract
  • progress reports against their Aboriginal participation commitments each month
  • an Aboriginal participation report at the end of the contract, or more frequently if you determine it’s needed

Aboriginal Participation in Construction policy

The Aboriginal Participation in Construction Policy aims to create opportunities for Aboriginal businesses and encourage Aboriginal employment and training on NSW Government construction projects.

You must dedicate at least 1.5% of the project value to Aboriginal participation for all construction projects valued over $1 million, and for any construction projects primarily directed to one or more Aboriginal communities.

You must:

  • ensure all suppliers are aware of, and comply with, their obligations under the APIC policy
  • provide APIC policy guidance and support to suppliers during the tender and project life cycle. You must also guide and support Aboriginal-owned businesses and local Aboriginal communities in the project location
  • require suppliers to provide an Aboriginal Participation Plan in their tender responses
  • finalise the Aboriginal Participation Plan with the successful supplier when you award the contract
  • ensure every construction contract over $1 million includes supplier obligations under the policy
  • monitor whether suppliers are complying with their Aboriginal participation reporting requirements. This includes reporting monthly on projects over $10 million and quarterly on projects under that amount.
  • apply any further measures the NSW Procurement Board approves to support its APIC policy objective.

Eligible spend

The minimum 1.5% Aboriginal participation must be directed to eligible spend, which includes:

  • employment of Aboriginal people by the head contractor or subcontractors to work on the project
  • subcontracting with or sourcing project-related goods or services from Aboriginal businesses
  • education and training for Aboriginal employees working on the project, or to develop Aboriginal education programs and courses for the supplier’s employees
  • engaging Aboriginal organisations or businesses to support the supplier to achieve their Aboriginal participation obligations.

You should work with suppliers to ensure the full Aboriginal participation component is spent in line with their commitments. If this isn’t possible, you must distribute the remainder of the funds to the Procurement Board’s approved bodies. These funds will be used to improve capability and employment outcomes for Aboriginal people for future construction projects.

Reporting requirements

Suppliers must provide:

  • a draft Aboriginal Participation Plan during the tender stage
  • a final Aboriginal Participation Plan at the start of the contract
  • progress reports against their Aboriginal participation commitments:
    • each quarter for contracts over $1 million
    • each month for contracts over $10 million
  • An Aboriginal Participation Report at the end of the contract, or more frequently if you determine it’s needed.

Supplier obligations

Creating opportunities for Aboriginal participation depends on suppliers meeting their requirements under the APP and APIC policies.

Incentives and consequences

You may introduce incentives to recognise suppliers where they exceed their policy targets. You may also introduce consequences for suppliers unable to allocate eligible spend by distributing any remainder of eligible spend to approved bodies.

You’re responsible for your suppliers

You’re responsible for monitoring your suppliers' progress towards achieving commitements made in their Aboriginal Participation Plans, progress reports and Aboriginal Participation Reports.

NSW Government responsibilities

As a government, we’ll work with you to monitor progress towards the APP and APIC policy.

Improved technology and data collection have made it easier to identify opportunities for Aboriginal participation. They have also made it easier to measure performance.

Monitoring and publishing results

NSW Treasury is responsible for administering, monitoring and reporting on the APP.

A whole-of-government dashboard will monitor the outcomes of the APP and APIC policy, including:

  • the percentage of government contracts awarded to Aboriginal-owned businesses
  • how many contracts are awarded to these businesses
  • how many Aboriginal people are employed on awarded contracts.

NSW Treasury reviews APP targets and manages complaints.

The Procurement Board has completed a review of the APP and APIC policies PDF, 1314.83 KB in consultation with Aboriginal Affairs NSW, NSW Government agencies and industry.

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  • Probity and fairness: Get an understanding of your obligations when it comes to probity and fairness.
  • Low value contracts: Read about the special rules that apply when selecting suppliers for low value contracts.
  • Supporting SMEs: Discover your special obligations to SMEs and regional businesses when selecting suppliers.
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