What Victoria’s Social Procurement Framework means for suppliers

The Victorian government’s Social Procurement Framework is a policy that introduces new government procurement criteria to encourage businesses to increase the social value and inclusion of their work, and to reward and recognise businesses that support their communities.

Its overall objectives are to harness the power of government procurement to drive genuine and lasting social, economic and environmental outcomes that create more inclusive growth to benefit the whole Victorian community.

At the heart of the Social Procurement Framework are 10 social and sustainable objectives:

1. Opportunities for Victorian Aboriginal people
2. Opportunities for Victorians with disability
3. Women’s equality and safety
4. Opportunities for disadvantaged Victorians
5. Supporting safe and fair workplaces
6. Sustainable Victorian social enterprises and Aboriginal business sectors
7. Sustainable Victorian regions
8. Environmentally sustainable outputs
9. Environmentally sustainable business practices
10. Implementation of the Climate Change Policy Objectives

These are described in more detail in Victoria’s Social Procurement Framework: Building a fair, inclusive and sustainable Victoria through procurement (PDF).

Government can achieve some of these social and sustainable procurement objectives by purchasing directly from a social benefit supplier such as a Victorian social enterprise, an aboriginal business or an Australian disability enterprise.

Many of these objectives can also be met by government purchasing from suppliers who, in turn, deliver against social and sustainable outcomes through tenders and quotations.  For example, suppliers who incorporate Aboriginal businesses, social enterprises and Australian Disability Enterprises (ADEs) into the supply chain or directly provide opportunities for disadvantaged Victorians.

As a procurement policy, the framework introduces additional considerations for businesses that do not already have a social benefit focus, that wish to work with the Victorian government through the procurement process. Where directed, businesses will need to incorporate the objectives of the framework in business offerings and bidding practices to maximise the chances of winning and retaining government contracts.

When social procurement requirements will apply

The Social Procurement Framework is flexible, so there are only a few mandatory requirements that are relevant to suppliers:

• Social procurement requirements must be incorporated in procurements >$1M in regional Victorian and >$3M in metropolitan and state-wide procurements.
• Social procurement evaluation criteria should have a minimum weighting of 5% (when they are included in any procurement), and
• Social procurement requirements are to contain a 1% Aboriginal business procurement target based on a threshold set by a government buyer. [The Victorian Government has set a target, committing that 1% of government procurement will be from Aboriginal businesses by 2019-2020].

However, it is very important that suppliers understand that in any procurement, regardless of value, Victorian government buyers will be encouraged to incorporate social procurement requirements or objectives.

How to supply to government under the Social Procurement Framework

When you look at a tender or quote you will begin to see questions and evaluation criteria asking suppliers what practices or policies they have to meet social procurement objectives. For example:

• How will you engage with a social benefit supplier?
• Do you have inclusive employment practices for Victorians with disabilities?
• Can you meet targets for employment and training for disadvantaged Victorians?
• Do you have performance standards for labour hours performed by women?
• Do you comply with industrial relations laws?
• Do you comply with climate change policies?
• How will you meet targets for recycled content, waste management and energy consumption?

Suppliers will not be required to deliver against all these requirements, but they may be asked to deliver against 2 or 3 of them.

Tips to get ready to respond to Questions on Social Procurement:

1. Read and understand the Social Procurement Framework – understand what you need to do to meet the new requirements and how you can use them to differentiate yourself and strengthen your position when bidding for government business.
2. Develop a Social Procurement Policy – document the processes and practices that prove your business is aligned with Government’s social procurement objectives.
3. Build an implementation plan to include social enterprises and Aboriginal businesses in your supply chain. Supply Nation, Social Traders and BuyAbility can introduce you to suppliers. Social Enterprises such as the Brotherhood of St Laurence can also support inclusive employment targets.
4. Develop your current business practices and policies to incorporate equal opportunity policies, compliance with industrial relations laws and family violence leave.
5. Develop your current business practices and policies to incorporate environmentally sustainable business practices, and climate change resilience.

Implementation of Victoria’s Social Procurement Framework can also offer new opportunities in how a business can be run and products and services that can be delivered.

From a tendering perspective, it also offers businesses another way to differentiate themselves. Business can show they are committed, like the government, to truly sustainable social change and inclusive growth, while still representing strong value for money.