Indigenous participation in public bids: what evaluators want
Federal buyers now track how much of their spending reaches Indigenous businesses, and they are checking the claims. Firms that bid with Indigenous partners need arrangements that stand up to that scrutiny.
Photo by Chad Montgomery on Unsplash
Indigenous participation in public bids is no longer a side issue for firms that sell to the federal government. It is built into how departments plan their buying, and into how some contracts are scored. For engineering, construction and professional services firms, that changes who you bid with and how you describe the arrangement.
It also raises the bar. Buyers and oversight bodies are now checking whether Indigenous participation is real. Firms that treat it as a box to tick are taking a growing risk.
The federal 5% target
Indigenous Services Canada (ISC) sets out the rule plainly: federal departments and agencies must ensure that a minimum 5% of the total value of contracts are held by Indigenous businesses. The requirement was phased in across 96 departments and agencies, with all of them expected to meet or exceed the target no later than the end of the 2024 to 2025 fiscal year.
The government reports that it is ahead of the target overall. According to ISC, in 2023-24 the Government of Canada awarded over $1.24 billion in contracts to Indigenous businesses, representing 6.1% of all eligible government contracts. That is a national total. Individual departments are at different points, and each has its own plan for how to get there.
How set-asides work
The main tool is the Procurement Strategy for Indigenous Business (PSIB). Under it, some contracts are reserved for Indigenous businesses. The federal buyer’s guide on Indigenous considerations explains that a procurement must be set aside if the primary recipients or end users are an Indigenous population and the value exceeds $5,000. Departments may also choose to set aside any other procurement for qualified Indigenous businesses.
Eligibility is specific. ISC states that a business must be at least 51% owned and controlled by Indigenous people to be listed in the Indigenous Business Directory. A joint venture can qualify, but the agreement must show that the Indigenous partner has a lead role, with direct responsibility for managing and executing core business activities.
There is a second test that firms often overlook. ISC’s compliance guidance states that at least 33% of the total value of work performed under a PSIB contract must be performed by the Indigenous business awarded the contract. Other businesses that also meet the ownership test can count towards that share. Owning the contract is not enough. The work itself has to be done.
Where Indigenous participation in public bids is scored
Set-asides decide who may bid. In other procurements, Indigenous participation can affect the score.
Modern treaties are the clearest case. The buyer’s guide notes that when goods, services or construction will be delivered in an area covered by a comprehensive land claim agreement, the contracting obligations of that agreement apply. Several of those agreements require socioeconomic evaluation criteria in solicitations when feasible. The criteria cover subcontracting to beneficiary businesses, employment, training and skills development, and regional offices. Bidders must provide proof of their efforts and commitments.
Read those criteria the way an evaluator will. A commitment to hire “where possible” gives an evaluator little to score. A stated number of positions, a training plan with named courses, and a subcontract with a named business give them something concrete. Every commitment you make becomes a contract term, so make only the ones you can keep and report on.
Owning the contract is not enough. The work itself has to be done.
Scrutiny is increasing
ISC reports that since 2023 it has taken on the vast majority of Indigenous Business Directory assessments and audits itself. In October 2024 it began a review of every entry in the directory to confirm that listed businesses still meet the requirements.
The Office of the Procurement Ombud (OPO) went further. Its 2026 review of contracts awarded to Indigenous businesses found limited verification of Indigenous business status before award, and a failure to monitor whether the work was completed by Indigenous suppliers. It warned that if the 33% rule is not applied, non-Indigenous businesses may use Indigenous businesses as shell companies that meet the ownership test on paper but do not do the work.
For bidders, the direction is clear. Expect more checking of ownership, control and who actually delivers.
What a genuine partnership looks like
The firms that do this well start early and build arrangements that would make sense even without a set-aside. In practice, that means four things.
The Indigenous business does real work. Its share of the scope reflects its capacity and is large enough to meet the 33% rule with room to spare. It is not limited to administration or a share of profit.
Control matches ownership. Decisions, staffing and money flow in the way the joint venture agreement says they do. An evaluator or auditor reading the agreement should see the lead role in practice, not only on paper.
Capacity is built, not borrowed. Training, mentoring and equipment arrangements help the Indigenous partner win work on its own later. That is the purpose of the policy.
The partnership respects the Nation’s own priorities. Many First Nations and their development corporations have their own procurement and economic development policies. Learn them before you propose anything.
British Columbia is moving in a similar direction. The Province describes its Indigenous Procurement Initiative as working towards culturally appropriate procurement practices and an Indigenous-specific procurement plan.
A practical next step
Before your next federal pursuit, check whether the opportunity is set aside, whether the solicitation includes socioeconomic criteria, and what each would require of your team. If you intend to bid with an Indigenous business, agree the scope split, the decision rights and the reporting in writing before the solicitation closes.
Our Public Sector & Bids practice helps firms plan participation commitments and write them so evaluators can score them. If you are weighing a partnership for an upcoming bid, start a conversation.
Sources
- “Mandatory minimum 5% Indigenous procurement target”, Indigenous Services Canada. https://www.sac-isc.gc.ca/eng/1691786841904/1691786863431
- “Facts about federal Indigenous procurement policies and practices”, Indigenous Services Canada. https://www.sac-isc.gc.ca/eng/1746637262900/1746637283564
- “Socioeconomic considerations: Indigenous considerations”, Buyer’s Guide, CanadaBuys, Government of Canada. https://canadabuys.canada.ca/en/buyer-s-portal/buyer-s-guide/plan/socioeconomic-considerations/indigenous-considerations
- “Procurement Strategy for Indigenous Business compliance audit information”, Indigenous Services Canada. https://www.sac-isc.gc.ca/eng/1407949234714/1610985664338
- “Procurement Practice Review of Contracts Awarded to Indigenous Businesses”, Office of the Procurement Ombud, 2026. https://opo-boa.gc.ca/praapp-prorev/2026/epa-ppr-03-2026-eng.html
- “Procurement strategies and initiatives”, Province of British Columbia. https://www2.gov.bc.ca/gov/content/bc-procurement-resources/procurement-strategies-and-initiatives
