14 Indigenous Procurement Best Practices Suggestions

September 04, 2019

The minds and hearts of most Canadians are opening to the severity of colonial practices that helped shaped this country and how those policies continue to impact the socio-economic well-being of Indigenous Peoples. Improving the socio-economic well-being of Indigenous Peoples is key to reconciliation and will benefit the entire country. 

“Economists estimate that Canada would be $27.7 billion richer every year if Indigenous income levels were comparable to the rest of the population, resulting in a 1.5% boost in Canada's GDP. Closing this gap would also result in fewer Indigenous peoples living in poverty.” [1] 

Procurement contracts with Indigenous-owned businesses are a means of closing that Indigenous Procurement Best Practices Suggestionsgap. The growth of Indigenous-owned businesses and the increase in procurement contracting opportunities that growth represents is often overlooked. Across Canada, Indigenous entrepreneurs are responding to emerging opportunities, leveraging partnerships, and expanding existing businesses.

Today, the Indigenous economy in Canada is growing at an exponential rate. Indigenous Peoples contribute over $30 billion annually to Canada’s GDP and, based on this growth, the CCAB (Canadian Council for Aboriginal Business) estimates this is expected to increase to $100 billion by 2024. [2]

The federal government relies on goods and services from the private sector to deliver its programs and services and has an annual expenditure of approximately $18 billion. To encourage Indigenous participation in the procurement process, the federal government developed the Procurement Strategy for Aboriginal Business (PSAB) over twenty years ago. But, the PSAB has not been as effective as anticipated. In 2015, Indigenous procurement was $93.5 million, or less than 1 per cent of all federal procurement. In 2016, Crown-Indigenous Relations and Northern Affairs initiated a review PSAB and how to improve the rate of Indigenous-owned businesses in the procurement process. 

But, it’s not just the federal government that is looking at ways to increase procurement relationships with Indigenous-owned businesses. With the publication of the Truth & Reconciliation Commission’s calls to action, many corporations and organizations are looking for ways to fulfill #92 and contribute to reconciliation. 

Business and Reconciliation:
ii Ensure that Aboriginal peoples have equitable access to jobs, training, and education opportunities in the corporate sector and that Aboriginal communities gain long-term sustainable benefits from economic development projects.

If your corporation or organization is one of those looking for ways to increase the participation of Indigenous-owned suppliers of goods and services in your supply chain, here are some suggestions on how 

Best practice suggestions for attracting Indigenous contractors:

  1. Develop an Indigenous procurement strategy with set goals; ensure the strategy is apparent on your website
  2. Create opportunities for Indigenous suppliers 
  3. Learn about the communities near your organization and their existing capacity to provide the goods and services you require
  4. Consider offering some skills development and training programs to support the business capacity of the communities you want to engage with 
  5. Engage with the communities and let them know about available and upcoming procurement opportunities
  6. Access the Indigenous Business Directory  to learn about the goods and services available across Canada and include a link on your Indigenous procurement page to the Directory
  7. Some Indigenous businesses do not have the resources available to devote to filling in long and complicated forms - keep this in mind when developing your Request for Proposals (RFP)
  8. When it comes to RFPs, include provisions that require non-Indigenous suppliers to have procurement sub-contracts with Indigenous suppliers and give them points or credit in the RFP process for doing so
  9. Review your procurement process and look for ways to streamline it
  10. Hold workshops with potential suppliers that:
    1. Instruct how to complete a Request for Proposal
    2. Describe your organization’s qualification process
  11. Consider increasing the time required to submit the bid
  12. Consider reducing the financial requirements for security and bid deposits
  13. Consider making it a policy that large infrastructure projects have a set minimum percentage requirement for indigenous participation which ensures suppliers subcontract to Indigenous businesses
  14. Ensure that everyone in your supply chain has had Indigenous Awareness training

I hope this helps you with your goal to contribute to reconciliation and increase participation of Indigenous-owned businesses in your organization.

[1] Modernization of Indigenous participation in procurement: discussion paper Crown-Indigenous Relations and Northern Affairs Canada

[2] Business Reconciliation in Canada Guidebook, Canadian Council for Aboriginal Business p 6 

Topics: Reconciliation, Indigenous procurement

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