Social Procurement

“Social procurement involves organisations choosing to purchase a social outcome when they buy a good or a service”Social Procurement Australasia.

Social procurement can occur in a number of ways, including:

  • procuring from social enterprises
  • including a clause in procurement policies that requires tenders to be assessed in according to the social impact they create
  • requiring successful tenderers to employ a certain percentage of people from disadvantaged backgrounds in their workforce

The potential social impact of social procurement is enormous. According to Social Procurement Australasia, Australian governments alone spend around $141 billion on procured goods and services ($41 billion through the federal government, $20 billion through local governments and $80 billion through the state governments). A 2013 study (PDF) found that 11 Australian leading ASX corporations alone directed over $905 million to social procurement in that year. Huge volumes of products, services, and labour can be procured for social impact, from the coffee and snacks in the office kitchen, to cleaning supplies and services, and the staff hired in an organisation.

Policy settings in the UK and US are facilitating a rapid uptake of social procurement in those countries. For instance, the UK Social Value Act requires public authorities to consider economic, social and environmental well-being in their public services contracts.

Social Enterprise Finders

Governments, corporates and non-profits looking to procure from social enterprises might use the following social enterprise finders. Similarly, social enterprises seeking to access the social procurement market may seek listing on these tools:

Resources

A number of publications have been released in Australia explaining the context and business case for social procurement, including:

Social Value UK have collated case studies and resources supporting the experience of UK agencies in applying the UK Social Value Act.

The video below demonstrates Western Sydney Parklands’ experience with social procurement: