Social procurement is when organisations use their buying power to generate social value above and beyond the value of the goods, services, or construction being procured.
In the Victorian Government context, social value means the benefits that accrue to all Victorians when the social and sustainable outcomes in this Framework are achieved.
Social procurement can be grouped into two broad approaches:
- Direct – Purchasing of goods, services or construction (by government) from:
- Victorian social enterprises
- Victorian Aboriginal businesses
- other social benefit suppliers, including Victorian Australian Disability Enterprises
- Indirect – Using the invitation to supply process and clauses in contracts with the private sector to seek social and sustainable outcomes for Victorians.
Victoria’s Social Procurement Framework will support the expansion and standardisation of social procurement practice across all government procurement activities through both direct and indirect methods.
The Government acknowledges that regional small and medium enterprises play a critical role in the sustainability of regional economies and communities. In applying this framework, government departments and agencies are encouraged to consider how they can use place-based approaches to address entrenched disadvantage and support regional small and medium enterprises.
Purchase from social enterprises
Social enterprises are businesses that trade to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment. They derive most of their income from trade (not donations or grants) and use the majority of their profits (at least 50 per cent) to contribute to their social mission.
Among other benefits, social enterprises play an important role in providing transitional employment for Victorian priority job seekers as a pathway to employment in mainstream businesses. Social enterprises can also provide ongoing employment options for job seekers who may not be well placed to sustain mainstream employment over the longer term.
Purchase from Aboriginal businesses
The Victorian Government defines an Aboriginal business as:
- at least 50 per cent Aboriginal and/or Torres Strait Islander-owned
- undertaking commercial activity
- operates and has business premises in Victoria
Purchase from Australian Disability Enterprises
Australian Disability Enterprises are Commonwealth-funded and generally not-for-profit organisations operating in a commercial context, specifically to provide supportive employment opportunities to people with moderate to severe disability. Some Australian Disability Enterprises also operate as social enterprises.
Under this framework, the Government encourages engagement with Victorian Australian Disability Enterprises that offer award based pay rates for all staff.
Suppliers that provide inclusive opportunities
This framework seeks to incentivise all suppliers and supply chains to adopt and maintain fair, inclusive and sustainable business practices. The private sector plays a vital role in providing direct employment for Victorian priority jobseekers , and in providing employment opportunities that are gender equitable and inclusive of people with disability.
Jobs Victoria is a strategic mechanism through which suppliers can leverage from existing Government programs to support more job seekers at risk of being left behind into work.
Tools and support
The content on this page is taken from Victoria’s Social Procurement Framework. Access a PDF version in the social procurement document library.
For more information about social procurement, please contact the Buying for Victoria team.
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