Keogh Bay was contracted by IBA in 2012 to evaluate options for IBA to better support Indigenous businesses that are seeking to work in the resource sector. The study looked at:
- Prequalification requirements in 6 major companies;
- The barriers to prequalification faced by Indigenous businesses;
- Existing support for Indigenous businesses trying to prequalify; and
- Recommendations to help Indigenous business achieve prequalification
The key findings were:
- Indigenous contractor participation is low within the resource sector.
- Prequalification requirements are different from company to company but generally cover key areas such as HSE, organisational capacity, financial capacity, human resource management and quality assurance.
- A mixed bag of government and company support is available to Indigenous businesses but these initiatives are not well targeted and have not historically been effective in enabling large numbers of Indigenous businesses to achieve prequalification.
- Indigenous businesses see significant barriers to achieving prequalification (e.g. complexity of process, implementation of new processes, complex language and demands on the time of business owners).
- Resource companies also recognised that barriers exist (e.g. fragmented support, perception that Indigenous businesses don’t have capacity to develop and implement management systems, perception that Indigenous businesses are too small and reluctance to use Indigenous businesses at procurement level).
Recommendations to IBA
Develop a Prequalification Toolkit, specific to the resources industry, that Indigenous businesses could draw from when developing their systems.
Provide substantial one-one-one mentoring to help businesses develop their systems and put them into action.
Indigenous Prequalification Support Program – Pilot
Keogh Bay were subsequently contracted by IBA to develop a Prequalification Toolkit and run a pilot of workshops and mentoring support for a limited number of Indigenous businesses in South Australia and Western Australia.
- Following extensive industry and stakeholder consultation, Keogh Bay developed a Prequalification Toolkit which can be found at http://www.iba.gov.au/wp-content/uploads/2013/09/Publication_IBA-Contracting-Prequalification-Toolkit_PDF.pdf. This toolkit is very long and contains a large number of templates and example documents. It is not envisaged that companies will simply pick up the Toolkit and work their way towards prequalification. Rather, its usefulness will come to life when accompanied by expert business mentoring support.
- In August / September 2013, Keogh Bay ran four Prequalification workshops in Adelaide, Kalgoorlie, Port Hedland and Perth which were attended by a total of 47 Indigenous businesses. Overall, the feedback from participants on the quality and usefulness of the IPSP workshops was extremely positive as can be see from the figure below.
- Seventeen businesses subsequently signed on to Prequalification Mentoring (3 months). Sixteen of these businesses were assessed as making significant progress towards prequalification by the end of the pilot (for example through developing HSE systems, Environmental management systems and quality assurance systems).
- Seven businesses submitted prequalification applications during the pilot project. Six of these businesses have been successful in their application and the 7th is still in play.
- Prequalification has helped those participants to win contracts with a combined value of more than $7 million to date.
- Keogh Bay submitted an report to IBA that evaluated the strengths and weaknesses of the pilot model and made recommendations for future development of the IPSP program.
- IBA is going through the process of considering the evaluation report and potential expansion of the Prequalification support program later in 2014.
- IBA is looking at expanding future support to cover regions including Queensland, NT and NSW.
- There is potential that the IPSP program may be made available across Australia.
- In the meantime, Keogh Bay continues to work with Australian resource companies and Indigenous business in overcoming the challenges of contractor prequalification.
If you have any queries on the IPSP or Keogh Bay’s prequalification support services then please contact Jonathan Price on firstname.lastname@example.org or on 0423765437.