Indigenous Procurement Policy: targets, MMR and the 51% rule
The Commonwealth's Indigenous Procurement Policy sets purchasing targets for government and participation targets for contractors on high value contracts. A new version came out in May 2026, and the test for who counts as an Indigenous business changed on 1 July 2026.
What is the Commonwealth Indigenous Procurement Policy?
The Indigenous Procurement Policy is the Commonwealth policy that directs government purchasing to Indigenous businesses. It sets annual purchasing targets, a Mandatory Set Aside for some contracts, and Mandatory Minimum Requirements on contracts of $7.5 million or more in 19 sectors. Contractors commit to 4% Indigenous employment or supplier use at contract level, or 3% at organisation level.
Commonwealth Entities
Non-corporate Commonwealth entities must comply. Prescribed corporate and other corporate Commonwealth entities are encouraged to use best endeavours, and the policy does not apply to grants.
Head Contractors On High Value Contracts
MMR applies to procurement wholly delivered in Australia, valued at $7.5 million or more including GST, where more than half the value is spent in the 19 listed sectors. Building construction and maintenance services is one of them.
Trade Partners And Indigenous Suppliers
A head contractor can meet MMR directly or through subcontracts, so a trade partner (subcontractor) is often asked for workforce and purchasing data. Subcontracts awarded to Indigenous enterprises are captured in the head contractor's quarterly report.
Smaller And Remote Procurements
The Mandatory Set Aside covers all remote procurements and other procurement wholly delivered in Australia valued from $80,000 to $200,000. Indigenous small and medium enterprises get the first chance to show value for money.
What the Commonwealth Indigenous Procurement Policy asks for.
What you report, and when.
Quarterly Performance Report
To the contract manager, via IPPRS
Organisation-Based Report
To the contract manager, via IPPRS
Final Performance Assessment
To IPPRS, recorded by the contract manager and visible to future evaluation panels
Portfolio Contract Reporting
To NIAA, via IPPRS (a government duty, not a contractor one)
- Indigenous Participation Plan
- Quarterly Workforce Hours, Total And Indigenous
- Subcontract And Purchase Register With ABN, Value, Date And Description
- Direct Or Indirect Flag For Each Purchase
- Indigenous Business Register Or ORIC Listing For Each Supplier
- Declaration Of Past MMR Compliance
- Contract Variations Changing The Target Mix
Counting Suppliers On An Old Listing
The 50% ownership test only survives through the transition arrangements, so a supplier that qualifies today may not later. Check which test each Indigenous supplier relies on before you plan the contract's supplier use around it.
Treating The Target As A Year-End Figure
The target is an average over the contract term, but progress is reported every quarter and reviewed by the contract manager. A slow start is visible early, and the final assessment follows you into future tender evaluations.
Applying 4% To A Remote Component
Where part of the contract is delivered in remote Australia, the contract must require outcomes above the minimum in that area. Teams that plan on a flat 4% across the job can miss the higher requirement written into the contract.
How Catchment manages the Commonwealth Indigenous Procurement Policy.
All Four MMR Options As Targets
SocialProAdopting the built-in IPP framework generates the Aboriginal/TSI Employment Hours targets (Option 1a Contract at 4, Option 1b Organisation at 3) and the Aboriginal/TSI Business Spend targets (Option 2a Contract at 4, Option 2b Organisation at 3). You switch on the ones your contract elected, and each work package reports against them.
Workforce Hours Sorted By Attribute
SocialProMMR asks for total workforce hours and Indigenous workforce hours each quarter. Monthly hours count towards the employment target when the worker is recorded as Aboriginal or Torres Strait Islander, so the two numbers sit side by side, ready for you to enter in IPPRS.
Indigenous Spend Row By Row
SocialProIPPRS asks for each enterprise's ABN and name plus the value and date of the purchase. Certified Spend holds one row per invoice with supplier ABN, entity type, certifications such as Supply Nation, value excluding GST and any invoice file you attach. It records the certification and does not check it with the certifier, so the 51% question stays with your team.
The Plan And The Quarterly Filing
GovAssureThe framework adds the Indigenous Participation Plan (IPP Plan), Quarterly MMR Compliance Reports (via IPPRS) and Final Reconciliation Report as document requirements. Keep each revision of your own copy in the Document Register and select the current one when you file it. Lodging in IPPRS stays with you, and the export gives you the record to report from.
Trade Partner Data Before The Quarter Closes
SocialProEach trade partner submits a monthly report free of charge, with reminder and overdue emails. The head contractor accepts or sends back each section, and an accepted period closes to the trade partner unless a reviewer reopens it.
Adopting this framework on a project generates these targets and documents. You can edit them to match your contract.
Commonwealth Indigenous Procurement Policy questions.
What are the Mandatory Minimum Requirements under the IPP?
They are Indigenous participation targets written into Commonwealth contracts of $7.5 million or more (GST inclusive) that are wholly delivered in Australia, with more than half the value in one of 19 sectors. The supplier commits to 4% at contract level or 3% at organisation level, through employment, supplier use or a mix of both.
What changed in the Indigenous Procurement Policy in 2026?
An updated policy was released in May 2026. From 1 July 2026 an Indigenous enterprise must be 51% or more First Nations owned and controlled, or registered with ORIC. The 2026-27 financial year is a transition, during which the original 50% ownership test also qualifies.
Is Supply Nation still used to verify Indigenous businesses?
For now, yes. Supply Nation's Indigenous Business Direct lists enterprises meeting the original criteria, and its contract was extended by 12 months during the transition. NIAA ran a market process from 13 August to 18 September 2026 to find a provider that will verify against the strengthened criteria and run a new register.
Can a contractor meet the IPP target with both employment and spend?
Yes. Employment and supplier use can be combined as long as they add up to the target, for example 1% employment plus 3% supplier use at contract level. Targets can also be varied during the contract, with a revised Indigenous Participation Plan agreed with the contract manager.
What happens if a supplier misses its MMR target?
The contract manager assesses final performance in IPPRS at the end of the contract. That assessment can be seen by future evaluation panels, and entities must consider a tenderer's past MMR performance when evaluating tenders. Any further consequence depends on the terms of your contract.
Does the IPP apply to work delivered partly overseas?
MMR does not apply to contracts delivered overseas in whole or in part. An entity may choose to apply it voluntarily to the part delivered in Australia or to the whole procurement, with reporting through IPPRS as a voluntary MMR.
What is the difference between the Mandatory Set Aside and MMR?
The Mandatory Set Aside gives Indigenous small and medium enterprises the first chance at remote procurements and at those valued from $80,000 to $200,000. MMR sits on much larger contracts and asks the winning supplier to meet participation targets while delivering the work.
- Indigenous Procurement Policy May 2026 (National Indigenous Australians Agency)
- Indigenous Procurement Policy (IPP) (National Indigenous Australians Agency)
- Indigenous Procurement Policy is changing (National Indigenous Australians Agency)
- IPP Mandatory Minimum Indigenous Participation Requirements factsheet (National Indigenous Australians Agency)
Reviewed 4 November 2026. General information to help you plan reporting, not legal advice. Policies change, so check the current version with the policy owner before you rely on it.
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