‘Social Procurement ’ - A Leap Forward

Opinion: Social procurement – the concept of buying goods and services and social value – is not new but it is certainly making a leap forward in benefiting disadvantaged Australians with Gold Coast City Council leading the way, says Mark Daniels from Social Traders.

Government and others have used their contracting to achieve specific social outcomes for many years, be it requiring contractors to employ a certain number of trainees or apprentices or requiring local delivery components within contracts. More recently social procurement has been used as a vehicle for responding to some of the more intractable social issues such as job creation for the highly disadvantaged, indigenous employment and targeted initiatives around job creation for public housing tenants.

The concept of buying goods and services and social value (social procurement) has become more widespread as organisations and government have become more strategic in the way that they procure, recognizing that their spend can achieve broader organisational objectives.

Social Traders has been a strong advocate of social procurement because it places value on the very benefits that many social enterprises deliver and consequently leads to more work for social enterprises. Whilst there has been growth in social enterprise trade as a result of social procurement, many social procurement tenders result in mainstream businesses winning work without involving social enterprises in fulfilling the contract; not a bad outcome for the community but not a good outcome for social enterprise.

Gold Coast City Council (GCCC) advanced social procurement thinking this month when it offered tender opportunities directly to ‘social benefit suppliers’ beginning with council cleaning contracts and providing employment opportunities for the city’s most disadvantaged.

"While other organisations may include some social benefit criteria in their general tender documents, Council has committed to the next step – to offer tender opportunities to social benefit suppliers, or social enterprises only," Councillor Bob La Castra said at the time.

Councillor La Castra also said the benefits of the program included:

• developing and attracting social enterprises
• encouraging local businesses to include social or community objectives into daily business practices
• promoting employment opportunities, inclusive and accessible work environments for young people or older persons who are unemployed, people from Culturally and Linguistically Diverse (CALD) backgrounds and people with disabilities
• building the skills, knowledge and ability of Not for Profit community groups to enable them to access funding and expand services

Social benefit provider procurement – is a step beyond social procurement. This shift recognises the inherent value in social enterprises and other social benefit suppliers in providing the social impact the buyer is seeking. In this case, GCCC is seeking specific employment outcomes via the delivery of their cleaning contracts (see more in our lead news story).

Notably, this is a significant sum of work distinguishing it from the ‘bits and pieces’ types of contracts that often fall to social enterprises. GCCC has already indicated its desire to run similar tender processes for recycling rights at their recycling facility as well as other contracts in the future.

GCCC is leading the charge but is not on its own. We hear of more and more examples of local and state government socially procuring from social enterprises. From Townsville, to Parramatta, to Hume in Melbourne, and elsewhere, momentum is gathering and the number of practical examples of social procurement is growing significantly.

Recognising the momentum building across government social procurement, Social Traders has started to focus attention on corporate Australia. We have partnered with The Faculty – a specialist procurement consulting company with a real interest in generating social change through procurement – to take social procurement to a corporate audience.

Early in this journey we have had some strong engagement from several of Australia’s top 100 companies some of whom are already procuring from or intend to procure from social enterprise. We have also received a clear message from purchasers across the board that social enterprise accreditation will be critical to broad corporate adoption of social procurement and that there is a critical broker role in linking social enterprises to corporates.

The Faculty and Social Traders are currently undertaking research into corporate social procurement with a focus on social enterprise, to better understand which businesses are involved, what is working and why.

We believe this research is the first of its kind in Australia and the world. We expect it will lead to a better understanding of how private businesses and others can effectively procure from social enterprises. 

Gold Coast City Council has provided an important milestone in the evolution of social procurement in Australia; public procurement from social benefit providers. To our knowledge they are the first local government to do it in such a public way and on such a scale. Hopefully this will build the impetus for greater institutional procurement from social enterprises and other social benefit providers by the corporate, government and community sectors.

If you are a social enterprise that has benefited from social procurement or a corporate that has socially procured we would be keen to involve you in this research.

For further information about the cleaning tender process call 5667 3728 or by email. 

About the author:  Mark Daniels was appointed as Social Traders Manager Policy and Development in 2008. He has wide ranging experience in service delivery, advocacy and policy development. Prior to Social Traders, Daniels worked with the Brotherhood of St Laurence managing a number of social enterprises aimed at assisting people into mainstream employment as well as providing expertise to other agencies looking to establish social enterprise. 

You can email Mark by clicking here.