Businesses ‘black cladding’ or trying to muscle in on federal contracts destined for First Nations’ companies will be targeted in a government review.

The Commonwealth is looking at ways to strengthen its Indigenous Procurement Policy, which aims to award three per cent of its contracts to Aboriginal and Torres Strait Islander businesses.

Since it was introduced in 2015, the policy has generated more than $9 billion in contracts for more than 3600 Indigenous businesses.

But, concerns have been raised about so called ‘black cladding’, when a non-Indigenous business takes unfair advantage to win otherwise inaccessible Indigenous deals.

Assistant Indigenous Australians Minister Malarndirri McCarthy said reviewing the eligibility criteria was the first step to ensuring benefits were genuinely flowing to First Nations businesses as intended.