The construction industry in Queensland is regulated by various procurement policies and requirements, including social procurement initiatives and requirements.
The Queensland government (‘the government’) has imposed procurement requirements on parties wishing to supply goods or services or undertake work on their behalf.
The government has established a set of procurement policies and guidelines to be followed by all parties involved in government procurement.
Social procurement within government is:
“Using the government’s purchasing power to generate social benefits, adding value to procurement outcomes and supporting supplier and workforce diversity.”
This guide helps resolve how social procurement considerations should be embedded in government procurement processes as soon as a need to buy a good or service is identified.
The guide outlines steps for government agencies to take. These steps include, identifying social procurement opportunities, engaging with suppliers, and evaluating the social value generated by the procurement process.
Social inequities that the government is attempting to address
Some examples of social inequalities in the construction industry include:
*Sources: Disadvantaged groups, economic vulnerability, modern slavery, unemployment and environmental sustainability.
In summary, the government is promoting social procurement initiatives in the building and construction industry to create social value through its purchasing power.
I strongly support the government in leading change of this nature. The urgent need to address social inequities, as outlined above, can be supported and indeed accelerated through social procurement initiatives.
However, I wonder, how many parties view government requirements as a chore; where it is seen as something they just must address if they want to do business with the government.
I suspect that a significant number of parties have this attitude.
Talk about ‘an own goal’.
In my view, parties that have these views are missing out on a great opportunity to promote their business as being committed to leaning into Social Enterprise Procurement (SEP).
Consequently, for the remainder of this article, I will primarily focus on the benefit to construction industry parties embracing social procurement initiatives. Not because of government enforced requirements, but purely because it is good for:
Am I missing something?
Surely, these ‘3 Ps’, in themselves provide very compelling reasons for construction industry parties to embrace social procurement objectives. Also, let’s remember, not all parties are ‘motivated’ to embrace these objectives because of government requirements. There are many parties (typically smaller businesses) that choose not to procure government goods or services.
What is SEP?
SEP is a process where buyers use their purchasing power to generate social benefits, in addition to the goods and services they are procuring.
SEP provides a clear means of engaging social benefit suppliers. The social procurement guide mentioned previously in this article defines social benefit suppliers as:
“Organisations that have a social purpose or mission. They are often owned or managed by disadvantaged groups. These include, but are not limited to:
Aboriginal businesses and/or Torres Strait Islander businesses – making a substantial contribution to addressing disadvantage, primarily by growing and developing the Indigenous business sector, and through this, generating employment opportunities.
Social enterprises – led by an economic, social, cultural, or environmental mission consistent with a public or community benefit. Social enterprises trade to fulfil their mission and derive a substantial portion of their income from trade, and reinvest most of their profit/surplus into the fulfilment of their mission.
Procuring goods and services directly from social benefit suppliers will often help buyers meet other procurement priorities, such as supporting small and medium size businesses, and buying local or from regional businesses.
It is important to note that you can leverage any supplier to deliver greater social value. For example, as part of their service offering construction companies or professional services firms might commit to employment targets for disadvantaged jobseekers, share profits to support charities and/or engage social benefit suppliers in their supply chains.”
SEP and the Construction Industry
The construction industry is a major focus of social procurement. Due to the large scale and scope of purchasing involved in procuring a building or infrastructure project.
In the context of the construction industry, SEP can have significant implications.
For instance, construction companies can choose to procure from social enterprises that employ people from disadvantaged backgrounds.
This not only helps to create jobs and reduce inequality, it helps to build a more diverse and inclusive industry. Furthermore, by procuring from social enterprises that focus on environmental sustainability, construction companies can also contribute to the creation of greener, more sustainable buildings and infrastructure.
In conclusion, SEP is a powerful tool that can help to drive social and environmental change, support local communities, and foster inclusive economic growth.
For businesses and stakeholders in the Queensland construction sector, understanding and embracing this approach to procurement can bring about significant benefits, both for their operations and for the wider community.
What are the key principles of SEP?
I have read many reports and papers on the key principles of SEP and outlined below is a summary of this information. If anybody disagrees with me as always, I welcome feedback!
Final thoughts
SEP holds significant potential for the construction industry in Queensland and beyond. It presents a transformative approach to procurement that goes beyond traditional cost and quality considerations to incorporate social and environmental value.
By engaging with social enterprises, construction companies can contribute to solving social problems, reducing inequality, and promoting environmental sustainability.
There are compelling reasons for businesses in the construction industry to adopt this approach, despite government-imposed SEP requirements.
SEP can help companies to diversify their supply chains, stimulate local economic development, and enhance their corporate social responsibility profiles.
It can also provide a competitive edge in an increasingly socially conscious market where customers, investors, and other stakeholders are demanding greater social and environmental responsibility from businesses.
Furthermore, SEP can contribute to the long-term sustainability and resilience of the construction industry.
By supporting social enterprises, the industry can help to create a more inclusive and diverse workforce. Subsequently, fostering innovation, and building more resilient local economies. This can help the industry to navigate future challenges and opportunities; and to play a leading role in building a more sustainable and inclusive economy.
Considering these benefits, SEP can deliver significant benefits for businesses, the industry, and society.
Therefore, I believe that it is a no-brainer that all stakeholders in the construction industry. From small businesses to large corporations, consider integrating SEP into their procurement strategies and practices.
I will be writing several follow up articles delving into the major social inequalities SEP is designed to address.
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Not intended as legal advice. Read full disclaimer.
