What is social procurement?
Social procurement is when organisations use their buying power to create social value.
Social value is created when a procurement activity delivers social or sustainable outcomes. This can be things like:
- creating jobs and training opportunities for Victorians finding it hard to get work
- achieving a better outcome for the environment
- purchasing from a social benefit supplier
There are direct and indirect approaches to social procurement, see Social procurement overview: Approaches to social procurement.
What is the Social Procurement Framework?
The Social Procurement Framework is a whole-of-government policy that aims to build a fair, inclusive and sustainable Victoria through procurement.
Through Victoria’s Social Procurement Framework, the Victorian Government uses its buying power to create social and sustainable outcomes:
- jobs and skills-based training opportunities for priority jobseekers
- business opportunities for social benefit suppliers
- environmental outcomes
The Social Procurement Framework applies to all the goods, services and construction that the Victorian Government procures.
Access Victoria’s Social Procurement Framework.
Who is a supplier under the Social Procurement Framework?
Under the Social Procurement Framework, there are 2 main types of suppliers. Suppliers provide an Agency with goods, services or construction.
Social benefit suppliers
The Social Procurement Framework provides business opportunities for social benefit suppliers. These opportunities help build the business as well as the skills of its employees.
Through indirect social procurement opportunities, suppliers to the Victorian Government may be required to engage social benefit suppliers (e.g. Victorian Aboriginal businesses) in their supply chain. When suppliers include social benefit suppliers in their supply chain, it is important that these business relationships or partnerships are genuine and undertaken in a culturally-safe way that is respectful of the needs of Aboriginal workers.
For more information access the social benefit suppliers register.
Mainstream suppliers
A mainstream supplier is any supplier that is not a social benefit supplier. Most mainstream suppliers are small and medium sized enterprises, however there are also many large mainstream suppliers.
Mainstream suppliers can find work opportunities advertised on the Buying for Victoria Supplier Portal. They can register there to get emails when opportunities arise.
When bidding for government work, these mainstream suppliers need to show:
- an ability to perform the works or services under the tender
- that all of the evaluation criteria are met
- how they will deliver social and sustainable outcomes.
The buyer may ask the mainstream supplier to deliver social and sustainable outcomes such as employing Aboriginal Victorians, Victorians with disability or Victorian priority jobseekers.
To deliver on these social and sustainable outcomes, a larger supplier (for example, a head contractor) can sub-contract small and medium sized enterprises on a project, such as a public construction project.
In these cases, small and medium sized enterprises need to negotiate a contract with the larger supplier and deliver goods or perform works or services under the subcontract. This will include meeting social and sustainable outcomes and reporting on them.
Support is available to small and medium sized enterprises to build their knowledge, skills and ability to win government work. This support includes:
- Industry Capability Network - Supports local businesses by providing procurement and supply chain tools, as well as expert advice and support.
- Business Victoria - Provides business information, learning and advice, tools and templates and grants and programs opportunities.
Public construction
The Social Procurement Framework applies to public construction procurements regardless of contract type. This includes works and services awarded under:
- Consultancy agreements
- Panel arrangements
- Construct-only or Design and Construct contracts
- public-private partnerships contracts
- cost-reimbursable contracts, including Managing Contractor, Incentivised Target Cost and Alliance contracts.
The social and sustainable procurement requirements for a project are specified in tender documentation. Bidders are required to demonstrate how they will deliver outcomes by outlining relevant actions in their tender response. If successful, these obligations are then specified in the contract.
If a supplier has committed to certain social and sustainable outcomes in its tender response, for example employing a certain number of Aboriginal Victorians on a project, buyers will hold them accountable for these commitments.
It is important that suppliers follow through with their commitments and take the necessary steps to ensure successful implementation, for example by providing culturally-safe work environments for Aboriginal workers.
There are various points during the procurement process, including contract management, where buyers can take action to hold suppliers accountable for their commitments. One critical action is specifying social procurement commitments in a contract so that both buyer and supplier are aware of what the supplier has committed to and will be held accountable for.
Although many public construction suppliers are mainstream suppliers, social benefit suppliers can be leveraged throughout the supply chain to support the delivery of social and sustainable outcomes. In these types of arrangements where cultural issues may apply, for example if Aboriginal businesses are subcontracted, it is important that business relationships and partnerships are genuine undertaken in a culturally-safe way, that is respectful of the needs of Aboriginal workers.
Suppliers can visit the Find social benefit suppliers page for information about accessing social benefit suppliers.
Learn more on Support for suppliers.
Support
For more information about social procurement, please contact the Social Procurement team.
Updated