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Supplier diversity to increase through new procurement targets for Māori businesses

The Cabinet has agreed to a new procurement target for mandated agencies.

Government agencies need to ensure that at least 5% of the number of relevant contracts awarded are to Māori businesses.

The target is intended to increase the diversity of suppliers and to provide more procurement opportunities for Māori businesses across government contracts. This approach will support the economic recovery and development of Māori businesses and assist with the long term economic resilience of Māori communities.

A Māori business for government procurement purposes is one that has at least 50% Māori ownership or a Māori Authority as defined by the Inland Revenue Department.

This procurement policy applies to mandated government agencies that are required to follow the Government Procurement Rules. It is anticipated that government agencies will take the policy into account when they go to market for any contract opportunity and agencies will be expected to publish their progress against the target. This will encourage agencies to comply and improve their performance if they are not meeting their target.

Te Kupenga Hao Pāuaua, the project team based at Te Puni Kōkiri, is prototyping social procurement approaches over the next two years to reduce barriers for Māori businesses to engage in government procurement. It will also assist central and local government agencies to implement procurement practices that target Māori businesses.

We know that few Māori businesses apply for government contracts and fewer succeed in getting contracts through government’s procurement process. This policy will help in building capability for Māori businesses to tender for government contracts.

Over time this policy could be expanded to other traditionally marginalised groups such as Pacific peoples, women, people with a disability and youth.

Ministry of Business, Innovation and Employment (MBIE) and Te Puni Kōkiri will be developing guidance and instructions for agencies around the targets in early 2021 to support implementation.

Read about the Government’s target announcement - Beehive.govt.nz