Commonwealth Australian Industry Participation (CAIP) policy

Commonwealth AIP policy aims to leverage Australian Government spending to maximise Australian industry participation, capability and jobs. It requires giving Australian businesses full, fair and reasonable opportunities to bid to supply goods and services on government-funded projects.

Commonwealth entities that fund projects through procurements, grants, investments and payments of $20 million or more are responsible for applying this policy.

Companies that receive these funds and carry out the project are responsible for meeting CAIP requirements. These are the project proponents.

Our department administers the policy in line with the Australian Industry Participation (AIP) National Framework and Australian Government decisions on its application. We work with Commonwealth entities and project proponents to help them fulfil their obligations.

Full, fair and reasonable opportunity

These principles explain the policy intent in more detail:

  • Full: Australian industry has the same opportunity as other global supply chain partners to participate in all aspects of an investment project. For example, by supplying design, engineering, project management, professional services or IT architecture.
  • Fair: Australian industry has the same opportunity as global suppliers to compete on investment projects on an equal and transparent basis. This includes having reasonable time to tender.
  • Reasonable: Tenders are free from non-market burdens that might rule out Australian industry. Their structure gives Australian industries the opportunity to participate in investment projects.

Commonwealth Australian Industry Participation (CAIP) plans

Under this policy, project proponents may need a CAIP plan.

A CAIP plan ensures Australian industry have:

  • full, fair and reasonable opportunity to bid to supply key goods and services for the project
  • the opportunity to demonstrate their capabilities when the company purchases or subcontracts these goods and services.

A CAIP plan outlines how a project will provide opportunities to Australian industry. However, it does not mandate that a project must use Australian industry.

CAIP plan criteria

A project may or may not need a CAIP plan depending on:

  • the type or amount of funding
  • what the funding is being used for
  • who can supply goods and services for the project
  • whether the project is being carried out in Australia or internationally. 

A project may need a CAIP plan if it is receiving:

Project proponents can also voluntarily complete a CAIP plan to show commitment to local industry participation, even if the project doesn’t meet the above criteria.

Get in touch with the CAIP team for help or more information.

A project may not need a CAIP plan if:

  • The total tender value of the grant or project (including extension options) is less than $20 million.
  • The panel arrangement is worth $20 million or more but no single contract is worth $20 million or more.
  • The grant program is worth $20 million or more but no individual grant is worth $20 million or more.
  • Australian suppliers will deliver all the work.
  • There are no subcontracting opportunities.
  • All subcontracting opportunities to provide goods and services can only be delivered by international businesses because there is no Australian industry capability.
  • The project already has obligations under a state or territory local industry participation plan that meets CAIP policy requirements.
  • The procurement is subject to the Department of Defence’s Australian Industry Capability (AIC) program.

If the project has a capital expenditure of $500 million or more to establish or upgrade an eligible facility, it may need an AIP plan under the Australian Jobs Act 2013. If an AIP plan is in place, the project will not need a CAIP plan. Read more about AIP plan criteria.

Some types of domestic projects may not need a CAIP plan. These include:

  • office leases
  • leases or lease renewals for government buildings
  • labour hire including training, physical filing and moving services
  • managing or cleaning the environment
  • scholarships or bursaries
  • research, for example medical research
  • investments related to equity and debt funding
  • direct procurement where no subcontracting opportunities exist
  • subsidies for wages, such as Medical Research Future Fund grants
  • management services for government buildings, such as cleaning services
  • direct procurement of employment or professional services, for example temporary employment services
  • clinical trials that don’t have an approach to market.

Some types of international projects are unlikely to require a CAIP plan. These include:

  • goods and services that must be delivered outside Australia
  • overseas activities that are unlikely to attract Australian industry, for example a renovation of government properties held overseas.

How to meet CAIP plan requirements

  • Planning

    The Commonwealth entity plans an approach to market that maximises opportunities for Australian businesses. Include model clauses in tender documents or grant guidelines.

  • Self-assessment

    The Commonwealth entity completes the self-assessment to determine if a CAIP plan is required. It also provides a useful record of compliance even if the project may not need a CAIP plan.

  • Submission

    If a CAIP plan is required, the Commonwealth entity works with the project proponent to submit it.

  • Approval and publishing

    We approve CAIP plans and publish CAIP plan executive summaries.

  • Implementation

    The project proponent implements the CAIP plan.

  • Reporting

    The project proponent reports regularly to the Commonwealth entity on implementing their CAIP plan. The Commonwealth entity approves reports and submits them to us for data capture, monitoring and evaluation purposes.

We are transitioning to a new system for Commonwealth entities and project proponents to manage their CAIP plan obligations.

Read about the changes

Commonwealth entity responsibilities

When you are planning a procurement, grant, investment or payment, you should complete the self-assessment form (SAF) to find out if the project needs a CAIP plan. This notifies our team about the project.

If the project needs a CAIP plan, you are responsible for:

  • notifying the project proponent
  • initiating a CAIP plan in the system and sending it to the proponent to complete
  • reviewing, endorsing and submitting the completed CAIP plan to our team for approval
  • reviewing and approving implementation reports the project proponent submits
  • submitting the approved reports to us for data capture, monitoring and evaluation purposes.

You can maximise opportunities for Australian businesses by using CAIP model clauses in:

  • tender documentation
  • grant guidelines
  • funding agreements or contracts.

Contact us if you need more guidance.

Read more information about the Department of Finance’s procurement connected policies and grant connected policies.

Complete the SAF to work out if the project needs a CAIP plan. You can do this when you:

  • have selected the preferred tenderers or recipients
  • know any proposed subcontracting arrangements.

If the project needs a plan, we will get back to you to invite you to start the process.

Follow these steps:

  1. Initiate the CAIP plan in our online system and enter the project details. We will give you a link and a user guide to help you do this. You can also request a meeting with our team and the proponent at this stage to discuss or clarify requirements.
  2. Forward the CAIP plan to the project proponent for them to complete. 
  3. Review the CAIP plan and ask for additional information if needed.
  4. Endorse the CAIP plan then submit it to us for final review and approval.
  5. We review the plan against CAIP policy requirements.
  6. We approve the plan then publish the summary on our website.

Follow these steps:

  1. Review the implementation plans the proponent submits to evaluate their actions against their plans. Ask for additional information if needed.
  2. Approve the plans then submit them to us for data capture, monitoring and evaluation purposes.

Project proponent responsibilities

If a Commonwealth entity notifies you that you need a CAIP plan, you are responsible for:

  • completing a CAIP plan for the Commonwealth entity to endorse and for our team to approve
  • initiating implementation reports when prompted
  • implementing actions in the CAIP plan
  • completing implementation reports and sending them to the Commonwealth entity for approval
  • keeping detailed records.

Follow these steps:

  1. Fill in the details of your CAIP plan in our online system. You will receive a link and a guide to help you do this.
  2. The Commonwealth entity will review your CAIP plan. You may need to provide additional information to complete it.
  3. The Commonwealth entity endorses the CAIP plan and then will submit it to our team for the final review and approval.
  4. We review the CAIP plan to make sure it covers the right information. If we need you to make changes, we’ll provide feedback in 10 business days. It may take multiple reviews to finalise the plan.
  5. We approve the plan then publish the executive summary on our website.

When we approve a CAIP plan, the system will send you and the Commonwealth entity:

  • the approved CAIP plan
  • the executive summary
  • implementation report reminders.

As the proponent, you must describe the actions you’ll take to give full, fair and reasonable opportunity to Australian industry to participate in the project.

You must include:

  • opportunities the project will provide to Australian industry
  • strategies you will use to communicate openly and effectively about opportunities for Australian suppliers to supply goods and services. This may include a publicly accessible website that will provide:
    • general information about the project
    • supply opportunities
    • pre-qualification requirements
    • contact details for supplier enquiries.
    • assessment criteria that demonstrates how you will assess suppliers fairly and equally.

You must explain how you intend to:

  • develop an understanding of Australian industry capability before approaching the market for goods and services
  • communicate CAIP plan requirements with your contractors and sub-contractor
  • help Australian suppliers develop their capabilities and integrate into global supply chains.

As the proponent, you must:

  • Submit an implementation report to the Commonwealth entity in the agreed timeframes. This is generally 14 months from the contract execution or financial close and every 12 months from then until all sub-contracting opportunities are complete.
  • Keep records of how you are implementing the CAIP plan, providing opportunities for Australian industry to compete for work and meeting the CAIP principles.

Examples include how you:

  • distributed supplier information guides
  • held information sessions
  • offered feedback to unsuccessful tenderers.
  • developed excerpts from tender documents
  • set standards for goods and services
  • set pre-qualification requirements
  • designed work packages.

The system will send you and the Commonwealth entity copies of the implementation report once they approve it.

Contact the Commonwealth entity if you need help preparing your implementation report.

Feedback and complaints

To give feedback on CAIP processes and policy for Australian Government funded projects (Commonwealth AIP) email commonwealthaip@industry.gov.au.

If you have a complaint about CAIP processes or policy for Australian Government funded projects, clearly explain the issue and attach any relevant documents. If you make a complaint in person or by phone, follow it up in writing.

We will record and investigate your complaint and give a detailed response. If you’re not satisfied with our response, you can contact the Commonwealth Ombudsman.

More information

Find CAIP summaries for current Australian Government funded projects
Find out how the Australian government is maximising opportunities for Australian industry to participate in government funded projects through the Buy Australian Plan
Find information and resources on selling to government including finding and bidding for opportunities
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