A useful overview of the modern history of including horizontal policies in government contracts is provided by McCrudden (2004; 2007). He identifies early attempts as having originated mostly in England, the United States and France during the 19th century. At this stage, the primary concern was with fair wages and labour conditions. For example, in 1840 a directive was issued that established the 10-hour working day as a requirement for certain US government contracts; and in 1891 the House of Commons in the UK passed a resolution specifying fair wages as a requirement. Public works were also used to address ‘sudden rises in unemployment’. In 1931 The Davis-Bacon Act in the US required contractors to pay ‘local prevailing wage rates’ on construction projects over a certain size. In this case, the aim was to protect against the suppression of wages through lowest-bidders bringing in out-of-area workers willing to work for less. These types of policies were all geared towards benefiting, primarily, the majority, i.e. the “able-bodied, male breadwinner” (McCrudden 2004, p.258). In this, these early examples could be characterised as concerned with relatively simple, single-issue policy objectives which nevertheless generate social value and change social norms. These early programs were characteristic of the classical public administration style of public sector governance prominent at the time.
After the First World War, the first programs focusing on issues related to more marginal workers were introduced. This is arguably the starting point for the trajectory towards the current interest in procurement as a tool for addressing more complex socio-economic issues. It is also when the modern welfare system began to be established, and so it is unsurprising that national social and economic policies began to influence across government (McCrudden 2004, p.258). The British Government introduced measures designed to generate employment for disabled ex-servicemen, and after the Second World War this was extended into the broader population of people with disabilities. In the US, The Wagner-O’Day Act of 1938 created a Committee on Purchases of Blind-made Products. The committee advised on fair prices for ‘suitable commodities’ (initially, for example, mops and brooms) and the Act required Federal agencies to procure the specified products ‘from non-profit agencies employing disabled workers’. The Act was revised in 1971 and extended to include ‘other severely handicapped’ persons and also services (McCrudden 2007, p.4; McCrudden 2004, p.258).
Beginning in the US in the 1950s and 1960s, the policy implementation role of public sector procurement was broadened further when it was directed towards racial equality agendas. Requirements to demonstrate non-discrimination were included in contracts, and later this was extended to proactive affirmative action policies and practices. These policies led to the introduction of ‘set asides’ for minority-owned businesses, initially aiming to ‘stimulate further the development of an entrepreneurial black middle class’, but also including other minority groups - The Public Works Employment Act of 1977 was an early example of this and required that ten percent of funds granted for local work projects be allocated to minority owned businesses (McCrudden 2007, p.8). From the 1960s onwards, anti-discrimination and affirmative action agendas were extended to include gender issues and procurement was similarly used as an implementation tool. Examples of set aside programs aiming to reduce barriers for various minority groups can now be found at all levels of government in the US (McCrudden 2004, p.260). Here we see the broadening of classical public
administration roles to include a wider range of social and economic issues, as discussed in Chapter 1.
From the 1960s onwards, as other common law countries also adopted anti- discrimination and affirmative action legislation, the use of procurement to support the implementation of related policy objectives spread beyond the US. A series of attempts and reforms in Northern Ireland, beginning in 1976, resulted in the adoption of The Fair Employment and Treatment Order in 1998. This made it unlawful to discriminate on religious or political grounds and imposed economic sanctions on firms failing to comply with the relatively significant monitoring and reporting requirements - in the form of exclusion from government contracts (McCrudden 2004, p.262). In 1996 Canada introduced measures that extended on the original set-aside concept through a two-pronged approach designed to encourage both an increase in Aboriginal-owned businesses bidding for government contracts, and to encourage non-Aboriginal- owned firms to subcontract their services (McCrudden 2007, p.9). In Australia, the Queensland State government introduced an Indigenous Employment Policy for building and civil construction projects in 2001. Where projects are being undertaken in specified Aboriginal communities, a minimum of 20 percent of total labour hours must be undertaken by Aboriginal people recruited from the local community and accredited training must also be provided (McCrudden 2007, p.9).
Equality agendas also drove similar approaches in countries going through decolonisation. In India, for example, an anti-discrimination principle and provision for extensive set asides for particular groups was included in the Constitution. The Malaysian government adopted a similar approach in its efforts to redress power and representation imbalances amongst the Bumiputera (native Malays), aiming to reduce the strong likelihood that civil unrest would occur (McCrudden 2004, p.261). Post-apartheid South Africa also used its new Constitution to direct aspects of procurement policy and practice. Together with overarching principles of efficiency and equity, an extensive system of ‘targeted
procurement’ was established to support the redress of institutionalised discrimination and inequality (McCrudden 2007, p.8).
Whilst not the focus here, concurrently there has been significant activity around ‘green procurement’ in the public sector. Particularly since the 1990s, there are examples of procurement strategies being used to help fulfil environmental targets and commitments at the local level (Barraket & Weissmann 2009, p.4). In Local Authorities, these programs often centre on various dimensions of product specification – such as recycled and/or recyclable content. Some of these programs came to prominence under NPM governance regimes, where linking the horizontal objectives to cost savings gave them credence within that discourse.