Mixed result on Aboriginal procurement

The state government has reported an increase in the number of contracts awarded to Aboriginal businesses but a substantial fall in their value.

It awarded 284 contracts to Aboriginal businesses in the year to June 2021, up from 234 in the prior year.

However the value of these contracts fell to $136 million, down from $172 million.

Finance minister Tony Buti highlighted that the government had exceeded its own targets under its Aboriginal Procurement Policy.

The government awarded 6.5 per cent of its contracts to Aboriginal businesses in FY21 - more than double the 3 per cent target.

That’s up from 5.5 per cent and 4.7 per cent in the two prior years.

Despite this track record, the government has chosen to maintain its target at 3 per cent for the next two financial years, before lifting it to 4 per cent in FY24.

It has previously defended its conservative target, saying the policy was last reviewed during COVID when the business outlook was uncertain.

Since its introduction in July 2018, the APP has awarded 697 contracts to 209 Aboriginal businesses, with a combined value of $476 million.

The total was inflated by a handful of very large contracts in the first two years.

The government said 97 per cent of the Aboriginal businesses to be awarded contracts were Western Australian.

The average contract value was about $520,000, excluding panel contracts and those valued at more than $25 million.

The highest performing agencies included the Department of Communities, Department of Education, Main Roads Western Australia and the Public Transport Authority of WA.

Despite Main Roads being named as a high performer, the government last week cited its track record on Aboriginal employment as one reason for in-sourcing roads maintenance.

Instead of hiring private contractors to undertake maintenance, Main Roads plans to employ 660 extra workers and undertake the work itself.

The claimed benefits included improved Aboriginal participation.

"In particular, it will also mean a stronger focus on Aboriginal employment, with Main Roads able to engage directly with local Aboriginal businesses and workers,” transport minister Rita Saffioti said last week.

Dr Buti, who is also Aboriginal Affairs Minister, said today that prior to 2018, there was no policy in place to set targets to measure contracting outcomes for Aboriginal businesses in WA.

“The McGowan Government recognises the need to build capacity and support for the development of the Aboriginal business sector,” he said.

“Growing this sector creates better financial outcomes for Aboriginal Western Australians and is part of broader McGowan Government initiatives towards self-determination and inclusion.

“I’m proud of the Aboriginal Procurement Policy’s outcomes, which have seen consistent year-on-year growth in WA Government contracting with Aboriginal businesses.

He noted that the policy has been expanded into employment and subcontracting targets, which came into effect at the start of 2022.