Introduction to social procurement

Social procurement homepage

Social procurement is when organisations use their buying power to generate economic, social and environmental benefits above and beyond the value of the goods, services, or construction procured.

In April 2018, the State Government introduced Victoria’s Social Procurement Framework to enhance value for money in public procurement. Victorian Infrastructure Delivery Authority (VIDA) now mandates social procurement in all construction contracts, making Victoria’s Big Build a leader in social value creation.

Social procurement is achieved by:

employing, training, or supporting people facing barriers to employment
purchasing goods and services directly from social benefit suppliers, i.e., Aboriginal businesses, social enterprises or Australian disability enterprises
purchasing goods and services from mainstream suppliers who purchase from social benefit suppliers.

Engaging in social procurement benefits your business as well as social benefit suppliers and the communities they serve.

Benefits to your business

Demonstrating meaningful social outcomes from previous projects and innovative approaches in tender responses can potentially set your organisation apart from others.

Social and sustainable impact is becoming increasingly important to clients, employees and stakeholders. Showcasing your work in this space gives you a point of difference.

Engaging with social benefit suppliers allows you to diversify your supplier base and reduce the risk of supply chain gaps.

Social benefit suppliers in your supply chain can offer unique perspectives and problem-solving approaches. Being smaller, they can adapt quickly to new opportunities and are more inclined to co-design solutions with their customers, fostering innovation.

Benefits for Aboriginal businesses

Aboriginal businesses are defined as enterprises that are at least 51% Aboriginal and/or Torres Strait Islander owned, engage in commercial activity, operate from business premises in Victoria, and are certified by Kinaway or Supply Nation.

Supporting Aboriginal business empowers Indigenous communities economically, creating jobs, income and sustainable growth. It reduces reliance on government assistance, and promotes self-determination.

Aboriginal businesses incorporate traditional knowledge and cultural elements into their products and services. Supporting these businesses preserves and promotes Indigenous cultures, enriching Victoria’s cultural diversity.

Aboriginal businesses reinvest profits in their communities for programs, education, healthcare and infrastructure. Directly supporting them enhances well-being and quality of life for Indigenous communities.

Engaging with Aboriginal businesses strengthens relationships between Indigenous and non-Indigenous communities. Supporting these businesses demonstrates a commitment to reconciliation and respect for Indigenous rights and cultures.

Benefits for social enterprises

Social enterprises are businesses with a primary social or environmental purpose, deriving a significant portion of their income from trade and reinvesting 50% or more of annual profits toward their social goals. They are certified by Social Traders.

Many social enterprises create job opportunities, which not only provide income and financial independence but also contribute to an individuals' well-being and strengthen community bonds.

Many social enterprises are led by, and for, marginalised communities with a specific focus on supporting the growth of entrepreneurs. Such opportunities can lead to inter-generational wealth creation and empowerment, particularly for women.

Social enterprises often fill gaps in community needs and contribute to community cohesiveness.

Buying from a social enterprise with an environmental purpose can reduce waste and carbon emissions, creating cleaner communities and promoting a circular economy.

Refer to our Reporting social procurement impact webpage for guidance on how to get started measuring these benefits.

How to get started

Request access to the LXRP Social Procurement eLearning module to build knowledge and skills in social procurement. Contact lxrp-socialprocurement@levelcrossings.vic.gov.au for access.
Map work packages to spot Social benefit supplier opportunities (PDF, 545.7 KB).
Learn from other contractors who have done this before.
Reach out to Kinaway and Social Traders for support.

Introduction to social procurement

Benefits of social procurement

Benefits to your business

Benefits for Aboriginal businesses

Benefits for social enterprises

How to get started

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