Federal Audit Flags Weaknesses in Indigenous Procurement Strategy

The Office of the Procurement Ombud (OPO) has found significant compliance gaps in the federal program for directing contracts to Indigenous businesses.

Since 2022, federal departments have been required to ensure that at least 5% of the total value of their annual contracts are awarded to Indigenous businesses. The OPO’s review of four departments and 27 set-aside contracts found the program lacks the centralized policy, enforcement mechanisms, and accountability structures to reliably meet that commitment.

Key findings include the absence of a centralized Indigenous procurement policy, inconsistent departmental practices including skipped pre-award audits and failure to verify supplier eligibility, no recourse mechanism for Indigenous suppliers challenging contract awards, and a reporting methodology that overstates actual economic benefit by including work performed by non-Indigenous subcontractors.

The Ombud made three recommendations: develop a government-wide Indigenous Procurement Policy; establish a recourse mechanism for Indigenous supplier complaints, with a permanent mechanism to be Indigenous-led; and update the 5% target methodology to reflect only work performed by Indigenous businesses.

Public Services and Procurement Canada, which acts as contracting authority for major DND procurement programs, was among the departments reviewed, making the findings directly relevant to defence procurement.



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