A social enterprise’s guide to tenders, social procurement, scalability and financial sustainability

This is an incredible time for Victoria. Victoria’s social procurement framework is groundbreaking for Australia and the world. The important part to this triparty collaboration between Government, commercial businesses and social enterprises can leave a legacy of social and environmental impact that will be felt by our communities for many years to come.

Lucretia De Jong and Simon Coutts collaborated to write this article thanks to a common passion to help maximise sustainable, social and environmental outcomes.

Please contribute your thoughts and passions as well as share this with your networks so we all learn and evolve this landscape.

Victoria leading the way in social procurement 

Lucretia was lucky enough to attend the World Social Enterprise conference in Edinburgh in 2018 along with some of the most outstanding social enterprises in the world. I was proud to learn that Victoria, Australia IS leading the way with this kind of triparty Victorian Government lead initiative. 

Successfully implemented, Victoria will create jobs, training and financial support for those in our community with the greatest needs and contribute in a meaningful way to the environment.

With the world as our stage Victoria owes it to social enterprises everywhere to show how we can maximise social impact simply by changing the way Government, councils and businesses spend every day.

How social suppliers can embrace social procurement

At present Lucretia and Simon think there is some confusion about social procurement and fear that many smaller social suppliers may miss out on the opportunities available to them.

Due to the size of the Victorian infrastructure budget and the current lack of scale amongst many social enterprises, it is imperative that social enterprises work together, not against each other. Targets are not currently being met on current projects so working together to achieve scale is a good idea for enterprises with similar missions.

Here is our advice to social suppliers wanting to take advantage of Victoria’s social procurement framework. 

26 tips for social and sustainable suppliers

  1. Understand your strengths and weaknesses. Be upfront and honest with your potential client, let them know your challenges. Contractors working on major projects want to help and will help you look for solutions and opportunities.
  2. Don’t expect a contract will be given to you “JUST BECAUSE” you are a social enterprise. You will be competing with commercial businesses. Don’t expect your clients to understand your point of difference or community impact. Show previous outcomes/ social data/ environmental impact. if your product is more expensive let them know why! E.g. helping disadvantage young people requires financial resources. The point of social procurement is helping people. Validate your pricing.
  3. Stick to your knitting. Don’t spread your resources too thin and only take on what you can deliver professionally, and on time. Timing and quality is critical for construction projects. If you miss the mark you may not get a second chance. If you cannot fulfill your obligations, be transparent but don’t leave it to the last minute.
  4. No social procurement opportunity is too small. Starting small and provide consistent quality work to get started and then scale.
  5. Create a capability statement and make sure all insurances are current.
  6. Don’t be scared to request changes to contracts or payment terms. Remember their terms were created for commercial businesses and may not be appropriate for a social enterprise. Nobody wants to put a social enterprise under unnecessary financial pressure, but your clients aren’t mind readers.
  7. Review Government, Council, Westgate tunnel, Metro tunnel, LXRA, construction company websites to determine what their social procurement priorities will be for the next 12-18 months. Each department is expected to develop an annual Social Procurement Strategy that details what social or sustainable priority they will be focusing on for the next 12 months. (Note, this is being phased in over 2019 so for some departments it might be hard to find this year)
  8. Concentrate first on the department/s that best matches your organisations interests and those that share similar social or sustainable priorities. Don’t be scared to create new ideas for the supply of products and/or services. Remember this is a new framework and everyone is learning, now is the time to introduce something new. Ensure your product and service is relevant to construction, government or councils or their employees/contractors.
  9. Review the department’s future procurement opportunities. Each department must publish the future procurement activities for the coming year. Focus on local projects and or projects with a large labour component or material resource needs, i.e. infrastructure projects.
  10. Register on Tenders Vic website and set up an account and email notification for all new tenders. This is the platform that most agencies use to advertise tenders.
  11. Get to know the project social procurement managers and ensure they know the products/services you offer, so next time you will be included in their tender process. Do not rely on anyone to automatically send tenders to you, keep your social enterprise top of mind. Make contact regularly! If your social enterprise is currently not large enough to participate in a tender on your own, look to collaborate with other social enterprises. Alternatively, you may be able to provide your goods/services to a subcontractor as they will also be held accountable for their social procurement spend. Gradually we hope to see standalone social tenders emerging but for now keep an eye on tenders in your region or for the departments that share your priorities.
  12. Employment, training and labor hire is currently big business due to the demand and targets so ensure you are paying the correct awards to minimise risk for all concerned. A great place to start is a membership to Jobs Australia that has plenty of benefits, advice and training.
  13. Register on a panel of suppliers or prequalification scheme with relevant agencies. Many departments invite suppliers to quote under State Purchase Contracts and supplier pre-qualification registers, such as the Construction Supplier Register.
  14. Register your capability and interest with target departments. Letting the department know of your capability may result in an invitation to tender or they can pass your details onto suppliers. Attend new project information evenings. Try to speak the project manager, procurement managers or the chief superintendent.
  15. Start talking to a range of suppliers. Initiating early discussions with bid managers or the sustainability/social team of several suppliers. This will help build a relationship with them before they are deep into tender preparations. It’s like when a grant submission is due. Build the relationship before crunch time.
  16.  Become certified by Social Traders, or listed on Map of Impact, BuyAbility, Supply Nation and/or Kinaway. If Government or a mainstream supplier is looking for a social enterprise, they will be going to these sites. Attend network meetings and conferences as the social procurement managers do attend and are actively wanting to engage with you.
  17. Read about Victoria’s Social Procurement Framework and supplier sections. Familiarise yourself with what’s involved in the framework. Here’s a link to a summary of the Framework Simon wrote.
  18. Develop your own social/sustainable strategy to improve internal practices to align with the Social Procurement Framework. The more you align your deliverables with the social procurement framework, the greater chance you will have to supply to infrastructure projects.
  19. Seek mentors or partnerships through government or bigger suppliers to help you. Most Contractors allow staff to volunteer their time to help throughout. Just ensure you understand what skills you need so you can partner with the resources specific to your needs. If you choose to partner with a commercial business, make sure this business is not taking advantage of you to achieve social infrastructure business with your social enterprise receiving minimal return. Social enterprise collaborations provide an even playing field, create multiple social outcomes, while strengthening each other’s scalability.
  20. Decide whether you’re big enough to go it alone.
  21. Be the expert social enterprise in your field or location, don’t follow everyone else and find a niche market or point of difference.
  22. Consider how you will respond to a supplier if asked to deliver commitments far beyond your current capability. Can you scale up quickly?
  23. Identify and document how you measure social value. What measures and targets do you have to demonstrate that social and sustainable benefits/outcomes are being met?
  24. If regionally based, talk to local councils, regional departments and other regional agencies like roads authorities and water corporations. Being a locally based social enterprise does have strategic advantages as it’s a required part of the framework/ tender process.
  25. Be proud, as a social enterprise you are contributing to positive social and/or environmental change. No one else believes in your product more than you so let your voice be heard!
  26. Spread the word!

Spread the word, share our passion

Please share your thoughts and this article with your network to help social and environmental suppliers prepare for this game-changer.

Lucretia de Jong and Simon Coutts are happy to assist wherever possible and encourage you to contact us.

What more information? Message Simon Coutts for your free Social Procurement White Paper. The white paper will benefit social suppliers, businesses supplying government and public-sector employees wanting to make the most of social procurement.

Nb. The views expressed by Lucretia De Jong are her own individual opinions and experiences. Lucretia’s employer took no part in the writing of this article.

Read more about Victoria’s Social Procurement Framework here:

Part 1 – Buyers and suppliers guide to Victoria’s Social Procurement Framework

Part 2 – Challenges implementing the Framework

Part 3 – What Government Department and Agencies can do to champion social procurement

Part 4 – Suppliers guide to winning Victorian Government goods or services contracts

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