the aim of intentionally creating social outcomes (both directly and indirectly)” (Furneaux & Barraket 2014, p.269)
The definition adopted here is based on a typology developed by Furneaux & Barraket through case analysis. However, whilst the intent of the definition is adopted, its wording I modify it to refer to ‘socio-economic’ procurement rather than simply ‘social’ procurement. I understand that this could lead to additional blurring in an already messy domain, but this choice has been made for several reasons.
Importantly, the term socio-economic procurement more accurately reflects what is actually meant by social procurement, which in all its examples is concerned with some form of socio-economic outcome/s. As discussed earlier, ‘socio-economic’ is also another name for ‘horizontal’ policies and therefore this language locates the practice within the bounds of existing and historical work,
and thus potentially helps to improve its positioning within procurement regulatory frameworks and with the procurement profession.
Socio-economic also intentionally blurs traditional silo-lines in policymaking, reflecting the orientation towards complex public issues and new trends in policymaking. In this regard, the choice of language was also influenced by the input of the public sector ‘user group’ participants. They identified the separation of social and economic issues and outcomes as a barrier to fostering social innovation assemblages within their remits. Clarity of intent and purpose, and adoption of language that reflects this, is therefore considered an important contributor to fostering the necessary conditions for socio-economic procurement practice to thrive. In particular, participants felt that language was a barrier in communicating with many of those who have roles (internal and external) associated with conventional economic activity, including procurement officers and others responsible for budget allocations. All of this not-with- standing, where I refer to socio-economic procurement this includes what is more commonly described as social procurement.
The design and delivery of socio-economic procurement strategies requires close-working, imagination and open-mindedness (Bovaird 2006, p.84) and a much higher degree of inter-departmental coordination, cooperation and trust than is often exhibited by conventional public sector entities (Erridge & Greer 2002, p.503). Developing a common language is a precursor to developing common objectives, and these are central to realising the potential of socio- economic procurement strategies.
The inclusion of intentionality in Furneaux & Barraket’s definition also links current interests to historical trajectories, reflecting the proactive approaches evident in the affirmative action agendas enacted in the 1960s, when there was a shift away from simply seeking to prohibit discrimination through contractual requirements to a focus on promoting proactive measures (McCrudden 2004, p.260).
I am not suggesting that the language of socio-economic procurement replace that of social procurement in popular or policy use; but for the clarity it affords the discussion here it is adopted in this thesis. The efficacy of this language refinement was not tested with the two ‘user groups’ as the selection of policymaking domain was made after the workshops. It would be interesting to explore this further in future research.
4.2.1 Direct and indirect
Furneaux & Barraket’s definition is the first to specifically differentiate between direct and indirect forms of socio-economic procurement. This distinction makes a useful contribution towards theory development specific to the field as it promotes a more textured engagement with the details of practice. Promulgation of the typology will also assist practitioners achieve greater clarity in developing and implementing programs.
The public sector, by its very nature, is engaged in a wide range of procurement activity that is inherently concerned with implementing policies designed to generate public benefit in various forms. Examples of this type of activity include procuring goods and services to provide health facilities, deliver education programs, or construct a recycling plant. This is not the type of procurement that is the focus here as it does not intentionally seek to generate any additional socio- economic outcomes beyond the delivery of the products, services or works being purchased.
However, if the procurement strategy for the hospital, education program, or recycling plant included objectives designed to create, for example, employment or training opportunities for people facing barriers to entering the labour market – then it would be an example of indirect socio-economic procurement. Typical approaches to indirect socio-economic procurement use award conditions to require certain behaviours of suppliers. These are sometimes called ‘social
clauses’ or Community Benefit Clauses.49 The most commonly cited indirect approaches include screening supply chains for ethical considerations, and inserting employment targets for particular target groups into capital works contracts awarded via competitive tender (Furneaux & Barraket 2014, p.270). Indirect approaches focus on how a procurement activity is designed and delivered, by incorporating horizontal policy objectives into ‘regular’ contracts. In Australia, we are seeing governments adopt indirect approaches through requiring the inclusion of a Reconciliation Action Plan and/or Disability Action Plan in tender responses. Indirect approaches in the form of local procurement programs are also increasingly popular amongst Local Authorities in Australia. For example, the City of Gold Coast supports its policy objective of a ‘competitive local business and industry’ through: 1) issuing requests for quotation for contracts with a value under $200 000 AUD to businesses with a local branch office first, before going to the wider market; 2) including a sliding-scale weighting of up to 15 percent for local, regional, intrastate and interstate suppliers; 3) allowing a 15 percent pricing advantage on contracts under $1 million AUD for local businesses employing a minimum of 10 full time employees; and 4) a two percent weighting related to the Gold Coast Business Excellence Awards (McNeill 2015).
Direct approaches to socio-economic procurement involve purchasing from
various types of for-social-benefit entities (Furneaux & Barraket 2014, p.270). For-social-benefit suppliers are organisations and enterprises driven by a primary purpose that revolves around delivering socio-economic outcomes - including entities that are owned by groups or people who are considered marginalised or socially excluded. By virtue of their purpose and/or ownership
49 Community Benefit Clauses are those criteria included in tenders that require demonstration of how “. . .
targeted recruitment and training, small business and social enterprise development and community engagement . . .” will be achieved (Scottish Government n.d. a).
structure, for-social-benefit suppliers are resource generators for and resource distributers into community economies.
For-social-benefit suppliers include, for example: nonprofits; social enterprises; Australian Disability Enterprises; Aboriginal-owned businesses; social businesses; worker owned cooperatives; community owned cooperatives (McNeill 2015, p.3); and the emerging Fair Shares ‘solidarity cooperative’50 and B-Corps51 models. Direct approaches often take the form of ‘set-asides’ and other corralling techniques designed to build capacity amongst particular types of suppliers. Many of the early examples of socio-economic procurement activity outlined in the historical overview fit into this category.
An example of how the NSW Government in Australia shifted its policy emphasis from an indirect to a direct approach is outlined in Figure 3.52 The reasons for reviewing the original policy and the intended impact of the shift from an indirect to a direct socio-economic procurement strategy demonstrate the growing recognition that direct forms of socio-economic procurement are well suited to enabling social innovation assemblages.
50 See: Ridley-Duff 2015; and FairShares Association n.d. 51 For more information, see: B-Corporation n.d.
52 The description is a modified excerpt from McNeill 2015, (pp.6-7); for the policy itself see: NSW
Figure 3: NSW 2015 Aboriginal Participation in Construction Policy