Suppliers of goods and services to Victorian Government agencies need to think more than just price in their future tender bids.
It’s not new that suppliers to government are being asked to
consider local, social and sustainable practices in their tenders and
quotes. Latest OECD research
indicates that 17.8 per cent of Australia’s GDP is already spent on
social spending. Whilst a large component of this is spent on health and
pensions, the total social spend as a component of GDP has consistently
increased since the 1960’s.
Let’s face it though, most government tenders traditionally placed
more focus on the bottom line rather than giving any added focus to
additional, hard to measure, nice to have addon’s.
Has the Victorian Government taken a bold stance to lead a change?
What if I told you that 20 per cent of your next tender would be
evaluated on how you provided for victims of family violence, how you
have made your workplace accommodating to people with disabilities and
what you are working towards to adapt to climate change? In the same
submission you’ll be judged on how you intend on allocating 3 per cent
of your total contract spend on employing single parents and people with
disabilities as well as reaching challenging energy targets over the
For large infrastructure projects, one Victorian Government agency
weighted 20 per cent towards social and environmental practices in their
tender evaluation criteria and set a 3 per cent target spend on social
Not all suppliers will be required to go to such lengths in their
proposals. If you intend on supplying or sub-contracting on any of
Victoria’s multi-billion-dollar infrastructure boom, then it will pay to
spend more time thinking more than just the lowest price.
For lower valued contracts, government agencies are being
encouraged to factor in 5-10 per cent of their tender evaluation for
social and environmental outcomes and favour more local suppliers.
At the lower end of purchasing contracts, government agencies must
consider social and environmental practices of suppliers when assessing
quotes and tenders. The higher the value of the contract, the more
demanding government agencies will be on suppliers and their
Incorporating social and environmental practices into your business
could be the competitive edge your business needs to win future
To help suppliers navigate their way through this new Framework,
I’ve listed some suggestions to help you prepare for your next
Promote any existing sponsorship or support you already provide
your communities in the way of social or environmental practices. This
can be anything from donating services or goods to a local fete through
to sponsoring major events.
Dust off any awards or recognitions and consider nominating yourself for anything coming up.
Look at what social and or environmental community groups you would like to team up with or support more.
Look to update your own policies around environment, family violence leave, diversity and employment practices.
Train staff on new policies and make your business more socially and environmentally conscious.
When looking for new staff consider taking on apprentices,
long-term unemployed, migrants, refugees, single parents or workers in
Use more sustainable resources and recycled content, manage waste and pollution and minimise greenhouse gases.
For larger suppliers, create a social and sustainable procurement strategy of your own.
Prequalify where possible with a department or agency. I.e.
consider the Victorian Government Purchasing Board, Construction
Suppliers Register, Health Purchasing Victoria, State purchasing
contracts and check individual agencies.
Scan the government agency website that you have supplied to in
the past or want to supply to. They need to start publishing their
social procurement priorities for the coming 12-18 months so you can get
an idea what they’ll expect in upcoming tenders.
Check out Social Traders for certified social enterprises that government endorses to help partner with on your next submission.
Seek out social enterprises that are located close to where the contract spending will occur by checking out Map of Impact.
Focus your tender responses in terms of benefits to the community and environment, not just lowest cost price.
Get innovative about how your support for local communities and
the environment will have ongoing benefits long after the project or
contract has finished.
Identify key community groups that you want to work with and
mentor and support them to become capable of supporting your bid on
bigger projects. If they are not already, help them become a certified
social enterprise with Social Traders.
Apply the same scrutiny to your sub-contractors as the government agency will on you.
Help existing sub-contractors build their capacity in social and sustainable practices.
Check that your sub-contractors are not associated with any
industrial disputes or claims against them that will hamper your bid.
If you’re a sub-contractor, choose a niche (one area of the priorities) and be the best in the state.
Acknowledge that the Local Jobs First and the Major Skills
Guarantee policies are still required, this policy goes one step
Prepare for government agencies to negotiate more during the
contracting phase to include more social and environmental outcomes.
Responding to the new framework
Tier 1 construction companies know that social and sustainable
practices can improve their reputation, social licence and win them more
The social procurement framework is new, but corporate social
responsibility, sustainability and gaining social licence is not. Big
companies sponsor events, volunteer their staff for great causes,
participate in charities, set up community funds….
Regardless of whether their motive is profit, big companies
acknowledge that people’s expectations are changing and that having a
social and environmental conscious makes good business sense.
Big companies know that building a strategy around social and
sustainable procurement may win them the next $billion job. Big
companies know that they can’t do this alone. They need sub-contractors,
social enterprises and environmentally sustainable companies to help
If you supply to Government, they will focus more on what your
company already does and what you can deliver during the contract.
Identifying small actions that you can take now to make your
business more community and environmentally friendly makes good business
When bidding on work, check with the client how much emphasis they
are placing on social and environmental initiatives. If this is new to
you, start small and don’t over budget for additional social and
sustainable activities. Aim to integrate and substitute activities and
make sure your next submission focuses more on your commitment to a
lasting legacy rather than lowest cost.