Decoding Social Procurement

As built-environment tendering specialists, we have witnessed the rise of social procurement criteria in public, institutional, and corporate tendering over the past decade. Social procurement is the application of procurement processes and purchasing power to generate social impact. 

Figure 1. What is social procurement. 

Such criteria can encompass a wide variety of issues that broadly fall into three main categories:

• Ethical procurement

• Sustainable procurement

• Local procurement

The collective weighting of these types of criteria can range from 5% to 20%, and they are becoming increasingly difficult to address at the point of tendering. 

We deal with a wide range of actors in the construction supply chain, from micro businesses to multi-national companies, and there is a lot of confusion throughout the industry about why these criteria should apply, especially to small to medium-sized businesses. On the surface, expecting SMEs to address these criteria seems disproportionate and unfair. So, we have embarked on a project to better understand social procurement and develop tools to help businesses approach them strategically. Here’s what we learned:

The rise of social procurement is progressive and increasing

When we say social procurement is progressive, we mean progressive in every sense of the word ‘progressive’. It is progressive in tense or aspect, it happens or develops gradually or in stages and favours or advocates for social reform. In other words, it represents a slow march towards a better society. Figure 2 below provides a brief, high-level overview of the progression of issues relating to ethical procurement over the past 80 years.

Figure 2. The progression of ethical procurement.

This slow march is largely driven by one of the key mechanisms of democracy - legislation and, in other cases, by more informal/opt-in frameworks and charters. As new legislation is introduced by the representatives we elect and as leading social and industry groups introduce new frameworks and charters, progress towards social reform is made. In this way, social procurement topics reflect the pulse of contemporary society. 

If you look at any dimension of social procurement, whether ethical, sustainable, or local, best practices in each area continue to reach an ever-higher standard. 

Social procurement is becoming essential to business competitiveness

It is important to remember that although most businesses involved in the built environment are small to medium enterprises, each plays a role in a much larger supply chain. The procurers of infrastructure and capital works projects at the heads of those supply chains are often government, institutional, not-for-profit or large corporate entities. When businesses provide services to these entities, they become part of their supply chain and must meet the legislated standards they are subject to or the values they espouse.

As legislation is introduced, such as mandatory reporting around CO2 emissions or modern slavery, the legislated requirements large businesses are subject to filter down to the smaller companies that provide services to them. 

There is no silver bullet

All businesses want to be prepared to maximise the points they earn for social procurement criteria. Who wants to miss out on an opportunity they are otherwise qualified for because they lack a clear position on the dimensions of ethical, sustainable and local procurement?

Businesses should take a strategic and proactive approach to developing their social procurement credentials. This transition, however painful, is exactly the effect that legislation, frameworks and charters are designed to bring about - systemic change in society.

We believe in the power of social procurement to drive the sort of systemic change that can make the world a better place. We also realise that many businesses are struggling to keep pace with the rate of change in this space, so we are working on a solution. Our forthcoming Social Procurement Kit is designed to help you understand the key issues and develop a strategic approach suited to your practice’s clients, scale, and values. We are developing a self-guided kit and related consulting options to help you achieve a meaningful approach. If you’d like to know more, pre-register and receive updates below. 

We recently presented the framework underpinning our Social Procurement Kit in partnership with the Association of Consulting Architects. Click here to access the recording.