Social Procurement—Adding Value to Community Well-Being
From the April 2019 print edition
The concept of social procurement is getting a great deal of buzz within both public and private sector organizations these days, and for good reason. For instance, federal, provincial and local governments
are all looking at ways in which they can achieve additional value. As well, businesses are incorporating social impact and outcomes into core their business practices while social enterprises are looking at social and economic returns. At the same time, communities are faced with complex challenges that require many different responses‚—social procurement is one solution.
But just what is social procurement? Each and every purchase produces an economic, environmental and social impact and those impacts can be either intentional or not, says David LePage of Buy Social Canada. According to LePage, “social procurement is about capturing those impacts and seeking to make intentional, positive contributions to both the local economy and the overall vibrancy of the community.”
Social procurement involves leveraging a social value from existing procurement practices. Social procurement adds a social value consideration to an organization’s current evaluation of price, quality and environment of the goods and services that it purchases. The concept and practice of social procurement can be broken down into two different methodologies or ways of implementation: one is the social purchasing of goods and services (for example, from social enterprise suppliers) and the other is the inclusion of community benefit agreements (CBAs) in infrastructure development.
For example, public purchasers often need to procure catering services. Social procurement opens up catering opportunities to social enterprises that may be providing employment opportunities to people who face barriers to employment. Similar pricing, similar quality, local employment and social impact translates to greater value for the communities involved. The Government of Canada is piloting this very approach.
As Larry Berglund of Presentations Plus, a CCSPI training partner says, social procurement is the transition from making good deals, to making deals that do good. Procurement, which is a transactional tool of the demand side, redefines the value proposition to go beyond the lowest cost and be based on values of a larger stakeholder base.
Another example of this can be found in the Village of Cumberland. In November 2016, the Village Council adopted a social procurement policy. When evaluating bids for a Village of Cumberland contract, staff and elected officials consider the usual criteria of quality, price and environmental issues, but now add a fourth component: social.
Bidders must meet certain social values determined by the Village Council, on Vancouver Island in British Columbia. The village includes a living wage evaluation, along with apprenticeship opportunities, for residents of the village who are at-risk youth, aboriginal people, women, newcomers to Canada or retiring veterans and people transitioning into new careers.
When a local company called J.R. Edgett was hired to build a new bike lane for mountain bikers to travel safely from the Cumberland Recreation Institute parking lot down to the main entrance into the mountain bike trails, the company also contributed to the building of trails in the Cumberland Community Forest.
The municipality’s council members and staff initially worried that fewer vendors would bid on Cumberland projects after the social procurement policy was adopted. But this turned out to be a needless worry—the village’s last tender for its new water supply UV treatment plant attracted eight bidders.
Yes, there are challenges that come along with social procurement. However, there are not as many as you might assume. Under trade agreements, competition is required. Social procurement does not remove that competition, but the practice does ask for and evaluate the potential social benefits and impacts of procurement practices. There are also opportunities within trade agreements to provide direct award to social enterprises; this is an opportunity to direct spending to enterprises with community value and impact baked into their offering. The New West Partnership Trade Agreement (NWPTA) and the Canadian Free Trade Agreement (CFTA) also provide exemptions for social enterprises.
Buy Social Canada is a certification approach that works to advance and build social procurement by bringing together socially driven purchasers and social enterprises together, building business relationships that generate social benefits to communities across the company. Purchasers can find certified social enterprises by checking out their growing social enterprise directory on their website.
Social procurement is quickly becoming a best practice among many public sector organizations. The municipalities of Vancouver and Calgary, along with Manitoba Housing, are all examples of governments actively using social procurement criteria and frameworks in their procurement practices. The Coastal Communities Social Procurement Initiative (CCSPI) is a two-year initiative to support the implementation of social procurement across Vancouver Island, the Sunshine Coast and coastal communities on the West Coast. Communities large and small are making the shift.
CCSPI provides education, training, resources and consultation to local government and First Nation purchasers on the West Coast. The initiative supports social enterprise and local goods and services suppliers and construction firms to prepare and respond to social procurement opportunities.
That opportunity is significant. On Vancouver Island alone, local governments and institutional buyers spend $1.5 billion each year. When matched to social and community benefits, that’s a lot of additional value for communities, taxpayers and governments.
To learn more about social procurement, visit www.cspi.ca or contact the author, Kristi Fairholm Mader, at [email protected]