Indigenous Procurement Policy (IPP)

The target, and what it is a percentage of

The Commonwealth runs two separate targets at the same percentage: a volume target (share of the number of eligible contracts) and a value target (share of the dollar value). Both sit at 3% in 2025-26.

Scheduled increases

Which businesses count

Ownership test: 51%

From 1 July 2026 an enterprise must be 51% or more First Nations owned and controlled, or registered with ORIC. Transition arrangements run through 2026-27, during which a business meeting the original 50% ownership test is still eligible.

Where Commonwealth buyers verify a supplier

• Supply Nation Indigenous Business Direct Identifies enterprises meeting the original 50% criteria. Listed enterprises are eligible for the IPP during the transition period.
• ORIC Public Register Office of the Registrar of Indigenous Corporations. Registration with ORIC independently satisfies the eligibility test.
• Indigenous Business Register To be established in 2026-27, identifying enterprises that meet the strengthened 51% criteria.

Thresholds that change how you can buy

Mandatory Set Aside (MSA) $80,000 to $200,000

For procurements wholly delivered in Australia with an estimated value from $80,000 to $200,000 (GST inclusive), the buyer must first give Indigenous SMEs the opportunity to demonstrate value for money before approaching the open market. The MSA also applies to all remote Australia procurements regardless of value.

Exemption 16 No upper limit

Appendix A, Exemption 16 of the Commonwealth Procurement Rules lets an official procure directly from an Indigenous SME without a competitive process, provided value for money is demonstrated and documented.

Mandatory Minimum Requirements (MMR) $7.5 million and above

Contracts wholly delivered in Australia valued at $7.5 million (GST inclusive) or more in 19 specified industry categories carry mandatory Indigenous employment and supplier-use requirements.

What this means when you order materials

For a materials order between $80,000 and $200,000, the Mandatory Set Aside means you should be approaching an Indigenous supplier before you go to open market. Below that, Exemption 16 lets you engage directly at any value where you can show value for money.

The Commonwealth is the only jurisdiction running a volume target and a value target side by side at the same percentage. A single large order moves the value target; a single small order moves the volume target just as much.

Birak is a Supply Nation Registered First Nations building products supplier. We supply structural timber, plywood and sheet products, treated pine and decking, cladding, boards and mouldings, and fixings and hardware Australia-wide, and every order arrives with the documentation your Commonwealth reporting needs.

How Commonwealth compares

Targets are not measured the same way across Australia. The denominator differs, and so does the ownership test.

info This page is a plain-language summary prepared by a supplier, not legal or procurement advice. Policies change. Always confirm the current figures against IPP Guidelines, 12 May 2026 (NIAA) and the buying agency's own procurement rules before relying on them.