Australian Industry Participation Plans in
Commonwealth Government Grants
User Guide for Granting Agencies
October 2013
E-mail: aip@industry.gov.au
Website: www.industry.gov.au/aip
Phone: +61 2 6213 6404
Department of Industry
User Guide for Granting Agencies
Version 2.0 October 2013
Table of contents
Overview of User Guide for Granting Agencies ...................................................................................... 3
1.
2.
Introduction .................................................................................................................................... 4
1.1.
Background ........................................................................................................................... 4
1.2.
Policy Objectives ................................................................................................................... 4
1.3.
Legal Framework ................................................................................................................... 5
Information for granting agencies .................................................................................................. 6
2.1
Types of grants subject to AIP Plan requirements ................................................................ 6
2.2
AIP Plans for infrastructure projects funded through the States and Territory
Governments ..................................................................................................................................... 6
3.
2.3
Determining if an AIP Plan is required .................................................................................. 6
2.4
Background information on grant to be provided to Department of Industry .................... 7
2.5
Overview: Determining if an AIP Plan is required................................................................. 8
2.6
Flowchart: AIP Plan required of grant recipients .................................................................. 9
2.7
The AIP Plan ........................................................................................................................ 10
2.8
Timing Considerations ........................................................................................................ 10
2.9
AIP Plan approval documentation ...................................................................................... 10
2.10
Publication of AIP Plan executive summaries ..................................................................... 10
2.11
Grant Document Preparation ............................................................................................. 11
2.12
Funding Agreement Preparation ........................................................................................ 11
Implementation Reports ............................................................................................................... 12
3.1
What is an Implementation Report .................................................................................... 12
3.2
When an Implementation Report is due ............................................................................ 12
3.3
How to evaluate an Implementation Report ...................................................................... 12
3.4
Unsatisfactory or incomplete Implementation Reports ..................................................... 12
3.5
Publication of Implementation Report outcomes .............................................................. 13
3.6
Reviewing Implementation Report outcomes .................................................................... 13
3.7
AIP Annual Report ............................................................................................................... 13
Attachment A: AIP Plan Criteria ............................................................................................................ 14
Attachment B: Abbreviations, acronyms and definitions ..................................................................... 15
Attachment C: Grant Guidelines model wording.................................................................................. 17
Attachment D: Funding Agreement model clauses .............................................................................. 18
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Overview of User Guide for Granting Agencies
Determining if an Australian Industry Participation (AIP) Plan is required

The requirement for AIP Plans may apply to grants administered by agencies subject to the
Financial Management and Accountability Act 1997 that are:
o
One-off grants over $20 million (ex GST); or
o
Grant programmes where there is an expectation that successful applicants may each
receive more than $20 million (ex GST) of Commonwealth funding.

Granting agencies providing grants over $20 million should consult with the AIP Section in the
Department of Industry who will determine if an AIP Plan is required. Contact:
aip@industry.gov.au or +61 2 6213 6404.

The Department of Industry will consider two criteria to determine if an AIP Plan is required:
o
Do opportunities exist to increase opportunities for Australian suppliers and, if so, will
requiring an AIP Plan increase access to these opportunities?
o
Do Australian suppliers have the capability and capacity to supply to the project?
Developing an AIP Plan and Executive Summary

If the grant programme or one-off grant meets these two criteria, then the Department of
Industry will advise the granting agency that grant documentation and funding agreement must
inform applicants that developing and implementing an AIP Plan will be required as a condition
of receiving funding.

Successful applicants receiving over $20 million of funding are required to submit an AIP Plan to
the Department of Industry for approval.

The Department of Industry will provide advice and approval of AIP Plans.

An Executive Summary of the grant recipient’s AIP Plan will be published on
www.industry.gov.au/aip.
Implementation of the AIP Plan

The granting agency is required to ensure that the grant recipient is contractually obliged
through the funding agreement to comply with the AIP Plan and to submit an Implementation
Report.

An Implementation Report sets out how the grant recipient has provided full, fair and
reasonable opportunity to Australian industry and provides details of how all elements of the AIP
Plan have been implemented.

An Implementation Report should be required within 60 days of the one year anniversary of
signing the funding agreement. Only one report is required.

Granting agencies will make the final decision on approving or accepting Implementation
Reports. However, the granting agency can seek Department of Industry advice and/or
assistance when determining whether the grant recipient has met the AIP Plan requirements.

A copy of the Implementation Report must be provided to the Department of Industry.
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1. Introduction
The Australian Industry Participation Plans in Commonwealth Government Grants: User Guide for
Granting Agencies (AIP Plans: User Guide for Granting Agencies) outlines the steps required to be
taken by granting agencies when providing Commonwealth grants over $20 million (exclusive of
GST).
The AIP Plans: User Guide for Granting Agencies includes descriptions of the types of grants that may
require grant recipients to develop an AIP Plan and information on how AIP Plans are developed,
assessed and implemented.
The AIP Plans: User Guide for Granting Agencies should be read in conjunction with the Australian
Industry Participation Plans: User Guide for developing an AIP Plan (AIP Plans: User Guide) and the
Australian Industry Participation Plans: User Guide for developing an Implementation Report
(Implementation Report User Guide) which provides information to grant recipients on how to
develop an AIP Plan. These User Guides, and associated documents, are available at
www.industry.gov.au/aip.
1.1. Background
To ensure you are reading the most up to date version of the User Guide, you should visit the
Australian Industry Participation website at www.industry.gov.au/aip.
On 6 October 2011, the Australian Government announced that AIP Plan requirements would be
extended to cover Commonwealth Government grants over $20 million from 1 July 2012. Grant
recipients who receive more than $20 million of Commonwealth funding may be required to develop
and implement an AIP Plan. An AIP Plan sets out how the grant recipient will provide full, fair and
reasonable opportunity to Australian suppliers to provide goods and services on the project. AIP Plan
requirements for Commonwealth Procurements over $20 million have been in place since 2010.
AIP Plans require potential suppliers to detail actions and strategies which will be implemented to
provide full, fair and reasonable opportunity to Australian small and medium sized enterprises
(SMEs) to supply goods and services to the project. Suppliers will be contractually required to
implement these actions, if successful in being awarded a contract, and to develop an
Implementation Report detailing evidence of AIP Plan implementation and the outcomes achieved.
1.2. Policy Objectives
AIP policy has been developed in accordance with the principles and strategic approaches of the
Australian Industry Participation National Framework (AIP National Framework). The AIP National
Framework provides a nationally consistent approach to maximising Australian industry participation
in investment projects and significant public and private sector activity. The AIP National Framework
was agreed between Commonwealth, State and Territory Governments in 2001 to promote, develop
and maintain a sustainable Australian industry capability by encouraging competitive Australian
industry participation in investment projects.
The key principle of the AIP National Framework is to provide Australian industry, especially SMEs,
with full, fair and reasonable opportunity to participate in major investment projects, in Australia
and overseas.
Applying the AIP National Framework principles and strategic approaches to Commonwealth grants
is aimed at increasing opportunities for capable and competitive Australian suppliers, to participate
in large Commonwealth granting activities. AIP Plans provide a mechanism for grant recipients and
potential primary suppliers to familiarise themselves with capable and qualified Australian suppliers.
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AIP Plans can lower grant recipients transaction and search costs, and reduce risks by broadening
the supply base and understanding of the market. The AIP National Framework is available at
www.industry.gov.au/aip.
1.3. Legal Framework
This policy applies to Australian Government agencies that are subject to the Financial Management
and Accountability Act 1997 (FMA Act). While this policy does not cover Commonwealth Authorities
and Companies Act 1997 (CAC Act) bodies, CAC Act bodies may voluntarily apply the policy to
procurements valued at over $20 million.
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2. Information for granting agencies
2.1 Types of grants subject to AIP Plan requirements
The requirement for AIP Plans applies to grants administered by agencies subject to the Financial
Management and Accountability Act 1997 (FMA Act) that are:

one-off grants over $20 million; or

grant programmes where there is an expectation that successful applicants may each receive
more than $20 million of Commonwealth funding.
If an AIP Plan is required, it will be a condition of funding and will be included in the funding
agreement between the Commonwealth and the grant recipient.
Agencies administering Commonwealth grants of less than $20 million as well as non FMA Act
agencies are encouraged to voluntarily apply AIP Plan requirements to their grant programme or
one-off grant.
2.2 AIP Plans for infrastructure projects funded through the
States and Territory Governments
AIP Plans are a requirement for large infrastructure projects where funding over $20 million is
provided to state and territory governments from the Commonwealth. This initiative was announced
by the Prime Minister on 6 October 2011 and will increase opportunities for Australian industry to
win work supplying goods and services to major projects. This policy is in effect from 1 July 2012.
Some projects already require a Local Industry Participation (LIP) Plan under state and territory LIP
policies. To avoid duplication, the Commonwealth will not require an AIP Plan where a state or
territory LIP policy is already applied to the project.
The preference is, where LIP policies exist, they should be applied to Commonwealth funded
projects delivered by the states and territories. States and territories will then confirm to the
Commonwealth funding agency that the LIP policy will be applied to the project.
Agencies planning to provide funding over $20 million to a state or territory for a major project
should contact the Department of Industry early in the process. The Department will, in consultation
with the Commonwealth agency, advise whether industry participation policies should apply. If the
state or territory will apply its own LIP policy to the project, an AIP Plan will not be required. The
state or territory will be asked to confirm in writing that it will apply its LIP policy (or AIP Plan) to the
project. In practice this will most likely occur as part of funding agreement preparations.
2.3 Determining if an AIP Plan is required
Agencies providing grants over $20 million or that anticipate their grants programme may provide
individual grants over $20 million, should consult with the Department of Industry which will
determine if a requirement for AIP Plans will be necessary. When calculating the value of the grant,
granting agencies should consider possible options, extensions, renewals or other mechanisms that
may be executed over the life of the funding agreement.
In consultation with the granting agency, the Department of Industry will consider the two criteria
listed below to determine if an AIP Plan is required. This determination will be made by the
Department of Industry on a case-by-case basis.
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
Do opportunities exist to increase opportunities for Australian suppliers and, if so, will requiring
an AIP Plan increase access to these opportunities?

Do Australian suppliers have the capability to supply to the project?
If the Department of Industry considers that a grant programme or one-off grant meets these two
criteria then it will advise the granting agency that an AIP Plan will be required as a condition of
funding for grant recipients receiving over $20 million of Commonwealth funding.
To allow sufficient time for a granting agency to finalise its grant documentation, the granting
agency should contact the Department of Industry as early as possible, allowing for at least ten
working days for the Department of Industry to provide a determination.
The Department of Industry can be contacted at aip@industry.gov.au or on +61 2 6213 6404.
2.4 Background information on grant to be provided to
Department of Industry
To assist the Department of Industry to determine whether an AIP Plan will be required, the granting
agency should provide the following information (where known):

The value range of the grant(s) across the life of the funding agreement (e.g. a one-off grant is
for $30 million, or, grants will be available from a minimum of $5 million to a maximum of $25
million etc).

If the grant funding is going to be used by the grant recipient to procure goods and/or services.

The type of goods/services likely to be procured on the project and how they are expected to be
procured.

If the goods and services are available from Australian suppliers.

Potential opportunities for Australian suppliers to provide goods and services to the project.

Expected length of grant (covered by the funding agreement).

Time frames for the release of the grant documentation and the duration of time the
programme/round will be open.

Any sensitivities with the grants (i.e. sensitive data, security issues etc).

Any other background information which may help the Department of Industry determine if an
AIP Plan should be required.
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2.5 Overview: Determining if an AIP Plan is required
Is the grant valued at over $20 million or can grant
applicants request grants over $20 million?
Legend
No
Yes
Contact Department of Industry
aip@industry.gov.au or
+61 2 6213 6404
Granting agency activity
No AIP Plan
required
Department of Industry activity
Is an AIP Plan required (as advised by the Department
of Industry)?
Opportunities for SMEs?
Do SMEs have the capabilities?
No
No AIP Plan
required
Yes
Grant documents (funding agreement, programme
guidelines, etc.) need to advise potential grant
recipients that an AIP Plan will be required as a
condition of receiving funding. Department of Industry
can assist with wording.
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2.6 Flowchart: AIP Plan required of grant recipients
The following flowchart outlines the process to be followed by granting agencies and grant
recipients where an AIP Plan is required.
Grant documentation advises that an
Approved AIP Plan will be required for
successful applicants receiving over $20
million of Commonwealth funding
Legend
Granting agency activity
Department of Industry
activity
Applicant submits grant application to the
granting agency (for grant programmes)
Grant recipient activity
Granting agency makes offers of funding
Successful applicants for grants over $20 million
develop an AIP Plan
Department of Industry provides
advice and approval of AIP Plans
Successful applicant provides copy of their AIP Plan
and Certificate of Approval from the Department of
Industry to granting agency before, or within 30 days
of, signing funding agreement
Grant recipient implements its Approved AIP Plan
Grant recipient provides an Implementation Report to
granting agency
Granting agency assesses Implementation Report
and provides a copy to the Department of Industry
Department of Industry can provide
advice to assist the grant recipient in
implementing its Approved AIP Plan
Department of Industry can assist
the grant recipient in preparing the
Implementation Report
Department of Industry can
advise granting agency on
Implementation Reports
Department of Industry reports on implementation
of AIP Plans
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2.7 The AIP Plan
Grant recipients will be required to develop an AIP Plan to be approved by the Department of
Industry which covers the grant. The AIP Plan criteria are outlined at Attachment A. An AIP Plan only
covers the specified grant and cannot be submitted for other grants.
The grant recipient’s AIP Plan will be assessed by the Department of Industry in accordance with the
AIP Plans: User Guide (available at www.industry.gov.au/aip).
The Department of Industry will provide guidance and feedback to the grant recipient on their AIP
Plan.
2.8 Timing Considerations
Grant recipients who receive over $20 million in Commonwealth funding are required to submit an
AIP Plan to the granting agency before signing a funding agreement or within 30 days of signing a
funding agreement.
Grant recipients should be aware of AIP requirements prior to signing a funding agreement or
receiving an offer. This can be achieved by AIP requirements being incorporated into grant
guidelines and draft funding agreements.
If the grant recipient requests an extension beyond 30 days of signing a funding agreement to
submit the AIP Plan, this can be accommodated where it does not undermine the intent of the AIP
policy. This should only be done in consultation with the Department of Industry.
The Department of Industry requires at least 10 working days from receiving a grant recipient’s draft
AIP Plan to assess and approve the AIP Plan and provide the approval documents. The Department
of Industry provides grant recipients with feedback on their draft AIP Plans and, when necessary,
their revised AIP Plans. The timeframe for the approval process is dependent on how long grant
recipients take to incorporate feedback into their AIP Plans.
It is the sole responsibility of the grant recipient to manage the timeframes around the approval of
the AIP Plan and ensure the minimum timeframe is provided.
2.9 AIP Plan approval documentation
If the Department of Industry approves an AIP Plan it will issue the potential grant recipient with:

a cover letter stating the AIP Plan is approved

the Approved AIP Plan

a Certificate of Approval
The grant recipient needs to submit a copy of the Approved AIP Plan and Certificate of Approval to
the granting agency by the time specified by the granting agency in the programme documentation
or the funding agreement. If these documents are not provided, the grant recipient should not
receive any further payments until the documents have been provided.
2.10 Publication of AIP Plan executive summaries
The Australian Government requires executive summaries of AIP Plans to be published on
www.industry.gov.au/aip. Grant recipients will be required to draft the executive summary and
provide it to the Department of Industry for approval. The executive summary of the AIP Plan will
need to exclude any commercially confidential material (e.g. the estimated calculation of Australian
industry value added).
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Executive summaries can be updated or modified by grant recipients in consultation with the
Department of Industry.
The executive summary of an AIP Plan will be published as soon as the grant notice is published on
the granting agencies website. It will be the responsibility of the granting agencies to inform the
Department of Industry when this announcement is made to facilitate timely publication of the
executive summary. Grant recipients may also publish the executive summary of the AIP Plan on the
organisation website.
2.11 Grant Document Preparation
Grant applicants should be made aware at an early stage that developing and implementing an AIP
Plan and Implementation Report is a condition of funding. These requirements should also be
included in grant documentation such as grant guidelines and expressions of interest
documentation.
Suggested wording for use in grant guidelines are at Attachment C.
2.12 Funding Agreement Preparation
The granting agency is required to ensure that the grant recipient is contractually obliged to comply
with the AIP Plan and to report on the implementation of the AIP Plan (an Implementation Report).
This should be done by including a requirement in the funding agreement for the grant recipient to
develop and implement an AIP Plan and Implementation Report.
Attachment D provides model clauses for granting agencies to include in the funding agreement.
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3. Implementation Reports
Grant recipients will be required to provide an Implementation Report on their AIP Plan to the
granting agency as a requirement of the funding agreement. An Implementation Report template is
available for grant recipients to complete at www.industry.gov.au/aip.
3.1 What is an Implementation Report
An Implementation Report sets out how full, fair and reasonable opportunity has been provided and
provides evidence of how all essential elements of the AIP Plan have been implemented as agreed.
An Implementation Report will also detail the outcomes that were achieved as a result of AIP Plan
implementation, including providing an estimate of the total Australian industry value added
achieved in the project.
3.2 When an Implementation Report is due
An AIP Plan implementation report should be required within 60 days of the anniversary of signing
the funding agreement (for example, within 14 months of the funding agreement being signed). Only
one Implementation Report is required.
3.3 How to evaluate an Implementation Report
Granting agencies will make the final decision on approving or accepting Implementation Reports.
However, the granting agency can seek Department of Industry advice and/or assistance when
determining whether the grant recipient has met the AIP Plan requirements to ensure consistency in
AIP Plan implementation across agencies and grant recipients.
When evaluating an Implementation Report, granting agencies should ensure that the following key
components are addressed for each individual action in the AIP Plan:

That appropriate evidence of AIP Plan implementation has been provided

That the outcomes listed as being achieved are supported by the evidence.
Where an action has not been implemented the granting agency should be satisfied that appropriate
information has been provided detailing why the action was not implemented and what additional
activities were undertaken.
The granting agency must provide a copy of the compliant Implementation Report to the
Department of Industry to inform the AIP annual report to Government.
For further information on the outcomes expected in an Implementation Report, see the
Implementation Report User Guide which is available at www.industry.gov.au/aip.
3.4 Unsatisfactory or incomplete Implementation Reports
Where an Implementation Report is incomplete or does not provide sufficient evidence that the AIP
Plan has been implemented as agreed, the granting agency will advise the grant recipient on any
additional information required. The granting agency should proactively manage the requirement
for an Implementation Report to be properly submitted by the grant recipient and ensure that the
grant recipient meets the requirements of the AIP Plan. Any revisions or amendments to the
Implementation Report should be provided by the grant recipient within the specified timeframe of
the request being sent by the granting agency. If such additional information is not received within
the timeframe specified, the report will be deemed to be non-compliant by the granting agency.
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Once completed, a copy of the Implementation Report must be provided to the Department of
Industry which will report annually on the implementation of AIP Plans.
3.5 Publication of Implementation Report outcomes
For public reporting purposes only an aggregate percentage of Australian industry value added will
be published for each project. Australian industry value added in purchased goods and services is
defined as: the supply price of those products or services less the amount spent on imported
products and services. This value will be published once the Implementation Report has been
deemed acceptable by the granting agency. The granting agency will be responsible for providing the
Department of Industry a copy of the acceptable Implementation Report to allow for the Australian
industry value added to be published for each project.
The Department of Industry and/or granting agency may also publicise or report on the grant
recipient’s performance in relation to and level of compliance with the AIP Plan and/or
Implementation Report provided.
3.6 Reviewing Implementation Report outcomes
In conjunction with the granting agency, the Department of Industry may follow up on the
implementation of AIP Plans in order to monitor the effectiveness of AIP Plans in providing benefits
to all tiers of successful suppliers and providers of goods and services. The Department of Industry
will select major Commonwealth grants each year for these reviews (as well as other areas of
government spending such as major procurements) and will work with granting agencies in
conducting these reviews.
3.7 AIP Annual Report
The Australian Government will prepare an Annual Report on AIP Plans and outcomes. Information
provided to the Department of Industry through AIP Plans and Implementation Reports will be
incorporated into this Annual Report.
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Attachment A: AIP Plan Criteria
Criterion 1: Organisation and project details
Provide detail on the grant recipient and the project to be undertaken.
Criterion 2: Opportunities for Australian industry
Where it is known, provide detail on the goods and services to be procured for the project, an
indication of expected areas of opportunities for Australian suppliers, and an estimate of the
percentage of Australian industry value added for the project.
Criterion 3: Communication strategy
Provide detail on the applicant’s communication strategy that provides for the early identification of
opportunities for Australian industry and the effective transfer of information on opportunities for
Australian industry through all tiers of supply (e.g. along sub-contracting chains).
This must include detail on how the organisation will actively seek information on Australian industry
capability and communicate opportunities to potential suppliers.
Criterion 4: Opportunities through all tiers of supply and in all stages of the project
Describe strategies to include Australian industry through all tiers of supply and all stages of the
project (i.e. through design, procurement, construction, operation and whole-of-life support).
This must include information on the standards to be applied in the project and how AIP Plan
commitments will cascade to (at a minimum) tier 1 or Engineering, Procurement and Construction
Management (EPCM) companies. This must also explain the process and criteria to assess potential
suppliers (including any prequalification processes).
Criterion 5: Opportunities for longer-term participation
Describe opportunities for longer-term participation by Australian industry, including how the
project will work with suppliers (and government programmes where applicable) to encourage
capability and capacity development and integration into global supply chains.
Criterion 6: Procedures and resources
Describe the internal procedures, resources and systems in place to monitor the implementation of
the AIP Plan.
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Attachment B: Abbreviations, acronyms and definitions
AIP Plan
Australian Industry Participation Plan
AIP National Framework
Australian Industry Participation National Framework
AIP Plans: User Guide
Australian Industry Participation Plans: User Guide for
developing an AIP Plan
AIP Plans: User Guide for
Granting Agencies
Australian Industry Participation Plans in Commonwealth
Government Grants: User Guide for Granting Agencies
CAC Act
Commonwealth Authorities and Companies Act 1997
FMA Act
Financial Management and Accountability Act 1997
Implementation Report
User Guide
Australian Industry Participation Plans: User Guide for
developing an Implementation Report
SME
Small and Medium Enterprises
AIP National Framework
The AIP National Framework encourages a nationally consistent approach to maximising Australian
industry participation in major projects in Australia and overseas. Commonwealth, State and
Territory Ministers signed the AIP National Framework in 2001. The AIP National Framework is
available at www.industry.gov.au/aip.
AIP Plan requirement
An AIP Plan outlines the actions a grant recipient intends to take to provide SMEs with full, fair and
reasonable opportunity to participate in the project. Attachment A provides the criteria that are to
be met for an AIP Plan to be approved by the Department of Industry. In meeting these criteria,
grant recipients should outline specific activities they will undertake to provide SMEs with full, fair
and reasonable opportunity. Grant recipients are given further guidance on how to prepare and
implement an AIP Plan in the AIP Plans: User Guide.
Approved AIP Plan
An Approved AIP Plan means an AIP Plan that has been approved by the Department of Industry in
accordance with the AIP Plans: User Guide.
FMA Act agencies
FMA Act agencies are as defined in section 5 of the FMA Act.
Full, Fair and Reasonable opportunity
The concept of providing full, fair and reasonable opportunity to Australian industry is the core
principle of the AIP National Framework. The definitions are as follows:
Full – Australian industry has the same opportunity afforded to other global supply chain
partners to participate in all aspects of a project (e.g. design, engineering, project management,
professional services and IT architecture).
Fair – Australian industry is provided the same opportunity as global suppliers to compete on
projects on an equal and transparent basis, including given reasonable time in which to tender.
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Reasonable – tenders are free from non-market burdens that might rule out Australian industry
and are structured in such a way as to provide Australian industries the opportunity to
participate in projects.
Grant
FMA Regulation 3A(1) defines a “grant” as an arrangement for the provision of financial assistance
by the Commonwealth:
a) under which public money1 is to be paid to a recipient2 other than the Commonwealth; and
b) which is intended to assist the recipient achieve its goals; and
c) which is intended to help address one or more of the Australian Government’s policy
objectives;3 and
d) under which the recipient may be required to act in accordance with specified terms or
conditions.4
Implementation Report
An Implementation Report documents (by providing evidence) the actions and activities that a grant
recipient (and where appropriate its sub-contractors) have taken to implement the AIP Plan under a
major Commonwealth grant and the resulting outcomes. Grant recipients are given further guidance
on how to report on the implementation of their AIP Plan in the Implementation Report User Guide.
Small and medium sized enterprise (SME)
As defined by the Australian Bureau of Statistics, an SME is a business employing less than
200 people5. In this document all references to SMEs refers to Australian and New Zealand SMEs.
1
Public money is defined in section 5 of the FMA Act.
2
A recipient means a recipient of a grant that is external to the legal entity of the Commonwealth. Notional payments and
receipts by agencies within the meaning of section 6 of the FMA Act are not grants.
3
In an accounting sense, a grant is a non-exchange transaction, as government does not directly receive approximately equal
economic value directly in return.
4
If terms and conditions are not specified in legislation, a grant agreement, guidelines or other documentation, agency staff
should consider the substantive purposes and characteristics of a financial arrangement to determine the nature of the financial
arrangement.
5
ABS Small Business in Australia 2001 – 1321.0, p 1.
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Attachment C: Grant Guidelines model wording
The model clauses in this attachment can be used in grant programme guidelines (if applicable).
Note to drafters: These model clauses are provided as an example of clauses that could be included
in grant guidelines where the agency is advised by the Department of Industry, that an AIP Plan is
required. Agencies, in consultation with the Department of Industry, may modify or adapt these
clauses to ensure consistency with their grant guidelines.
Where an agency develops its own clauses or modifies these clauses, the agency should consult with
the Department of Industry to ensure that it is compatible with the AIP policy.
Granting agencies should take into account the time needed by grant recipients to obtain the
Department of Industry’s approval of their AIP Plan.
Please note: The Department of Industry requires at least 10 working days from the receipt of a
grant recipient’s draft AIP Plan to assess and approve the AIP Plan and provide the approval
documents. The Department of Industry provides grant recipients with feedback on their draft AIP
Plans and, when necessary, their revised AIP Plans. The timeframe for the approval process is
dependent on how long grant recipients take to incorporate feedback. It is the sole responsibility of
the grant recipient to manage the timeframes around the approval of the AIP Plan and ensure the
minimum timeframe is provided.
1 Australian Industry Participation Plan
1.1
Where a Grant Recipient receives over $20 million in grant funding from the
Commonwealth, the Grant Recipient must develop an Australian Industry Participation Plan
(‘AIP Plan’) in accordance with the AIP Plan User Guide prior to entering into a funding
agreement / or within 30 days of entering into a funding agreement (select one) with the
Commonwealth.
1.2
The AIP Plan must be approved by the Department of Industry prior to submission to (insert
name of granting agency). The development and implementation of an AIP Plan is a
requirement for receiving Commonwealth funding.
1.3
The Grant Recipient is required to develop an Implementation Report showing how the
Grant Recipient has implemented the AIP Plan. More information on AIP Plan requirements
and the Australian Industry Participation Plans: User Guide for developing an AIP Plan can be
found at www.industry.gov.au/aip.
1.4
Grant Recipients must provide an executive summary of their AIP Plan to the Department of
Industry which will be published at www.industry.gov.au/aip.
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Attachment D: Funding Agreement model clauses
The model clauses in this attachment are intended to be used in a funding agreement between a
granting agency and a grant recipient.
Note to drafters: These model clauses are provided as an example of clauses that could be included
in a funding agreement for a grant where the agency is advised by the Department of Industry that
an AIP Plan is required. Agencies are able to modify or adapt these clauses in consultation with the
Department of Industry to ensure consistency with their grant guidelines.
Where an agency develops its own clauses or modifies these clauses, the agency should consult with
the Department of Industry to ensure that it is compatible with the AIP policy.
The requirement for an AIP Plan Implementation Report should be included as a
milestone/deliverable with a due date, as should the AIP Plan and Executive Summary (if they are
required within 30 days of signing a funding agreement). Where possible, the provision of an
acceptable Implementation Report should be tied to a milestone payment.
Definitions
Australian Industry Participation Plan
Australian Industry Participation Plan (‘AIP Plan’) is a plan, required where the
Commonwealth has awarded more than $20 million in funds, prepared by the Recipient
(including while it was still an Applicant), and approved by the Commonwealth, that
demonstrates how Australian industry will be provided with full, fair and reasonable
opportunity to supply goods and services arising from the Project.
Approved Australian Industry Participation Plan or Approved AIP Plan
Approved AIP Plan means an AIP Plan that covers the grant project and that has been
approved by the Department of Industry in accordance with the User Guide for developing
an AIP Plan.
1.1
Australian Industry Participation Plan, Executive Summary and Implementation Report
1.1.1
The Grant Recipient must prepare and implement an AIP Plan and Executive Summary,
which:
a) demonstrates how Australian industry will be provided with full, fair and reasonable
opportunity to participate in all aspects of the project from design to completion;
b) must be submitted to (insert name of granting agency) by the date specified at Item X
(‘Milestones’) at Schedule X to the Deed; and
c) must be approved by the Department of Industry prior to submission to (insert name of
granting agency).
1.1.2
In addition, the Grant Recipient must prepare an AIP Implementation Report, which:
a) demonstrates how the Grant Recipient has satisfied the requirements under the AIP
Plan;
b) must be submitted to (insert name of granting agency) by the date specified at Item X
(‘Milestones’) at Schedule X to this Deed.
1.1.3
Where the Implementation Report does not meet the requirements outlined in the User
Guide for developing an Implementation Report, (insert name of granting agency) may by
written notice reject the Implementation Report. Where (insert name of granting agency)
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rejects the Implementation Report, (insert name of granting agency) will provide the Grant
Recipient with reasons for the rejection.
1.1.4
Where (insert name of granting agency) rejects the Implementation Report pursuant to
clause 1.1.3, the Grant Recipient must provide (insert name of granting agency) an amended
Implementation Report addressing the reasons advised by (insert name of granting agency),
and that otherwise meets the implementation report requirements, within 10 business days
of the date of the notice issued under clause 1.1.3.
1.1.5
If a conflict arises between part of the AIP Plan and any other part of the funding agreement,
the funding agreement prevails.
1.1.6
The Grant Recipient consents to (insert name of granting agency) or any other
Commonwealth agency:
a) publishing the executive summary of its AIP Plan at www.industry.gov.au/aip;
b) providing a copy of the Implementation Report to the Department of Industry; and
c) publishing or reporting on the Grant Recipient’s performance in relation to the AIP Plan
including:
i. the level of Australian industry goods and services purchased for the project; and
ii. the Grant Recipient’s compliance with the AIP Plan.
1.1.7
If requested, the Grant Recipient agrees to assist the Commonwealth with the collection of
information from the project to help monitor and report on the performance of its AIP
policy.
1.1.8
Once approved, the AIP Plan will form Schedule X to this Funding Agreement. Breach of
Schedule X will constitute a breach of this Agreement.
Note to drafters: Grant recipients should be required to provide a single Implementation Report on
their implementation of the AIP Plan as set out in the funding agreement. The appropriate time for
providing the Implementation Report will depend on the term of the funding agreement and the
nature of the activity being performed under the funding agreement, taking into account the areas
that are to be addressed in the Implementation Report. Generally, for longer term funding
agreements, within 60 days of the first anniversary of the commencement of the funding agreement
would be appropriate. For shorter term funding agreements (e.g. less than 12 months), 30 days prior
to the completion of the funding agreement would be appropriate.
Drafters should confirm that the AIP Plan, AIP Plan Executive Summary and Implementation Report
are not included as confidential information of the grant recipient under the contract. The AIP Plan
should be included as a Schedule to the funding agreement.
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