Victoria’s social

procurement
framework
Building a fair, inclusive
and sustainable Victoria
through procurement
Acknowledgements
Victoria’s Social Procurement Framework has been
funded by the Department of Economic Development, Jobs,
Transport, and Resources and delivered in collaboration
with the Department of Treasury and Finance and the
inter-departmental Social Procurement Steering Committee.
The development of this Framework has been informed
through extensive consultation. The project team wishes
to acknowledge the Victorian Government departments
and agencies, industry representative bodies and social
enterprises that have contributed their expertise
and content.
Authorised and published by the Victorian Government
1 Treasury Place, Melbourne 3002
April 2018
© The State of Victoria 2018
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ISBN 978-1-925551-96-9 (pdf/online)

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the State of Victoria as author. The licence does not apply
to any images, photographs, or branding, including the
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To view a copy of this licence, visit http://creativecommons.
org/licenses/by/4.0/. Copyright queries may be directed
to [email protected].

Disclaimer
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State of Victoria and its employees do not guarantee
that the publication is without flaw of any kind or is wholly
appropriate for your particular purposes and therefore
disclaims all liability for any error, loss or other consequence
which may arise from you relying on any information
in this publication.

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Contents

Message from the Minister for Finance 1 06. Social procurement planning and tactics 28

Message from the Minister for 6.1 Partners and support agencies 31
Industry and Employment 2
6.2 Support and development for
Introduction 3 disadvantaged jobseekers 32

Purpose 4 07. Implementation and reporting 34

Approach 4 7.1 Implementation plan 35

01. Victorian Government’s social and 7.2 Measurement and reporting 36

sustainable procurement objectives 6
08. Appendices 37
02. Social procurement 10
8.1  Relevant Government policy,
2.1 Purchasing from social enterprises 11 legislation, and initiatives 37

2.2 Purchasing from Aboriginal businesses 11 8.2 Terms and definitions 41

2.3 Purchasing from Australian

Disability Enterprises 12

2.4 Suppliers that provide

inclusive opportunities 12

03. Sustainable procurement 14

04. Framework requirements and expectations 18

05. Embedding social procurement 22

5.1 Alignment with the Government’s

procurement processes 23

5.2 Major projects 24

5.3 State Purchase Contracts and

pre-qualification registers 25

5.4 Supplier Code of Conduct 26

 Message from the
Minister for Finance
All Victorians should have the Victoria’s Social Procurement Framework
clearly defines social and sustainable
opportunity to participate and procurement as a key value-for-money
contribute to our State’s growing component, and how it can make a difference
economy. Government has an to our communities. For buyers, the framework
provides the guidance to embed social
important responsibility to create and sustainable procurement into existing
the right conditions to enable processes. And for suppliers, the framework
informs them of the methods to deliver
this to happen. Government objectives, while continuing
As a major procurer delivering the high- to grow their business by participating
quality public services and infrastructure in government procurement.
needed for our thriving population, one The framework applies to all of Victoria’s
of the Government’s major priorities is procurement activity and covers goods,
achieving value for money. But this doesn’t services, and construction. It also builds
necessarily mean buying the cheapest on and complements other Government
option available. initiatives that support Victorians to realise
Using its buying power, government can their full potential. This includes Aboriginal
enter into procurement contracts that make businesses, social enterprises, people
a real difference to Victorians. Whether it with disability, women and the long-term
be creating job opportunities or skills-based unemployed, as well as initiatives that
training in areas of disadvantage, addressing address climate change.
structural and systemic inequalities, or The Victorian Government is not alone
delivering environmental benefits for local – social procurement initiatives are being
communities, government procurement can developed and implemented at the national
add value that all Victorians can share in. and international level – but our leadership
is vital in demonstrating the value of putting
social and sustainable outcomes at the centre
of government procurement activity.
As the Minister responsible for government
procurement in Victoria, I’m proud to launch
this framework, and look forward to working
with departments and agencies to ensure
Victoria’s Social Procurement Framework
delivers benefits for all Victorians.

1 Victoria’s Social Procurement Framework

Message from the Minister for
Industry and Employment
Across Victoria, Government investment In addition to increasing market access for
social enterprises, the framework is designed
to deliver sustainable economic growth to increase contracting opportunities for
is creating new jobs and businesses and Aboriginal businesses (a key ambition of
unlocking untapped potential across Tharamba Bugheen – Victorian Aboriginal
Business Strategy) and for businesses based
our diverse, ambitious population. in targeted regional areas. The framework
also ensures government suppliers support
Victoria’s Social Procurement Framework
the major progress already made through
presents another major step forward in our
the Government’s Jobs Victoria strategy
endeavours to work in deep partnership with
to prioritise the creation of employment
industry in building a fairer economy from
opportunities for those Victorians who are
which all Victorians can benefit – one which
often under-represented in our workforce,
is innovative, inclusive and adaptive to change.
including people with disability and young
The framework sets out our objectives people at risk of long-term unemployment.
for leveraging maximum value from the
The ongoing support of businesses, large
Victorian Government’s significant buying
and small, is crucial to achieving the aims
power, bolstered by our ongoing investment
identified in the framework. We recognise
in infrastructure and future industries. The
Government’s responsibility to grow and
framework will achieve this by increasing job
retain this support by reducing red tape
opportunities for under-represented groups
and making our systems and reporting
and providing greater support for businesses
requirements as streamlined and consistent
that prioritise social impact alongside the
as possible for suppliers and contractors.
delivery of competitively priced, high-quality
The framework provides the strong policy
construction projects, goods and services.
foundation we need while building on existing
Earlier this year, we published the Victorian Government procurement initiatives, such as
Social Enterprise Strategy in which we set the Major Projects Skills Guarantee and Local
out our vision for a mature and growing social Jobs First – Victorian Industry Participation
enterprise sector across the State. Social Policy. We will continue to work closely with
enterprises are already worth $5.34 billion industry as we develop further guidance
to the Victorian economy, while providing and implement the framework in 2018.
vulnerable groups with greater access
It is a privilege to launch Victoria’s Social
to employment and creating innovative
Procurement Framework as Victoria continues
solutions to complex social, economic and
to demonstrate its strong leadership and
environmental problems. This framework
progress in growing an economy that is
is a demonstration of our ambition to support
stronger, more productive and works for all.
and super-charge the sector’s growth.

Victoria’s Social Procurement Framework 2

 Introduction

Victorian Government procurement is one of the largest drivers

in the Victorian economy. In 2016-17, the Victorian Government
spent $16 billion on goods and services to support service delivery
and operations, in addition to a spend of $9.1 billion on public
construction and infrastructure. Annual infrastructure spending
alone will average $9.6 billion from 2017-18 to 2020-21 to deliver
the current pipeline of projects.
Value for money is the key Victoria’s commitment to social
driver underpinning all Victorian procurement reflects a growing
Government procurement national and international focus
decisions. Victoria’s Social on the strategic use of procurement
Procurement Framework aims to drive social, economic, and
to ensure value-for-money environmental outcomes, including
considerations are not solely recent activity such as:
focused on price, but encompass
• the new 2017 ISO: 20400
opportunities to deliver social
Sustainable Procurement
and sustainable outcomes that
Standard, which has created
benefit the Victorian community.
a global framework to stimulate
The framework sets out a whole the integration of social,
of government scalable and economic, and environmental
consistent approach to social objectives into strategic
procurement for all Government procurement practice;
departments and agencies.
• the planned update to the
For suppliers, whether they
Infrastructure Sustainability
be major businesses or small
Council of Australia Rating
to medium enterprises (SMEs),
Scheme, which will now include
the framework advises how to
social and local economic
incorporate social value when
objectives, influencing future
competing for government
construction development
procurement opportunities.
practice; and
• rapidly growing leadership and
support from the private sector
through the establishment of
targets for purchasing goods
and services from social
enterprises and Aboriginal
businesses, investment in skills
development and employment
for disadvantaged community
members in major projects,
and inclusion of practices
that support environmental
sustainability beyond
compliance requirements.

3 Victoria’s Social Procurement Framework

PURPOSE APPROACH
The framework seeks to streamline The framework – and accompanying
and embed social procurement within guidance materials – applies to procurement
ordinary government processes. of all goods, services and construction
The framework is informed by the undertaken by, or on behalf of, departments
following guiding principles: and agencies subject to the Standing
Directions. Other Victorian public bodies are
• a standard and consistent approach
encouraged to adopt the framework.
across the Victorian Government;
The framework establishes:
• easy to understand and adopt with
minimal administrative burden for • the Victorian Government’s social and
all businesses, especially SMEs; sustainable procurement objectives;
• simple for government to embed • framework requirements and expectations,
in everyday business; for individual procurement activities
and for department and agency
• scalable for all sizes and types
procurement planning; and
of businesses and suppliers;
• measurement and reporting requirements.
• user-friendly and supported
with guidance, education, tools,
and templates;
• able to be effectively measured
and reported; and
• demonstrates Government Public Tenant Employment Program (PTEP)
leadership in promoting the use
of social procurement across Victoria. Departmental programs delivering training
and employment pathways
The Department of Health and Human Services’ (DHHS) PTEP
helps public housing residents across Victoria gain the hands-on
experience and training they need to enter the workforce. One
of the longest running Victorian Government social procurement
initiatives, the program provides an important pathway for those
who want to gain secure employment, but may lack the skills
or confidence to find work. The PTEP provides:
• a free recruiting service to help fill job vacancies;
• easy to use online forms to lodge job vacancies;
• ongoing support for the lifetime of the partnership; and
• subsidised construction industry apprenticeships for
public housing residents.

Victoria’s Social Procurement Framework 4

5 Victoria’s Social Procurement Framework
01
Victorian Government’s
social and sustainable
procurement objectives

Victoria’s Social Procurement Framework 6

 The Government seeks to increase the value of procuring goods,
services, and construction. The Government’s social procurement
objectives are outlined in Table 1 and sustainable procurement
objectives in Table 2.

Table 1: Victorian Government’s social procurement objectives

Social procurement objectives Outcomes sought

Opportunities for Victorian • Purchasing from Victorian

Aboriginal people Aboriginal businesses
• Employment of Victorian
Aboriginal people by suppliers
to the Victorian Government

Opportunities for Victorians • Purchasing from Victorian social

with disability enterprises and Australian
Disability Enterprises
• Employment of Victorians with
disability by suppliers to the
Victorian Government

Women’s equality and safety • Adoption of family violence leave

by Victorian Government suppliers
• Gender equality within Victorian
Government suppliers

Opportunities for • Purchasing from Victorian

disadvantaged Victorians social enterprises
• Job readiness and
employment for:
–– long-term unemployed people
–– disengaged youth
–– single parents
–– migrants and refugees
–– workers in transition

Supporting safe • Purchasing from suppliers that

and fair workplaces comply with industrial relations laws
and promote secure employment

Sustainable Victorian social • Purchasing from Victorian

enterprise and Aboriginal social enterprises and
business sectors Aboriginal businesses

Sustainable Victorian regions • Job readiness and employment

for people in regions with
entrenched disadvantage

7 Victoria’s Social Procurement Framework

Table 2: Victorian Government’s sustainable procurement objectives

Sustainable procurement Outcomes sought

objectives

Environmentally • Project-specific requirements

sustainable outputs to use sustainable resources and
to manage waste and pollution
• Use of recycled content in construction

Environmentally • Adoption of sustainable business

sustainable practices by suppliers to the
business practices Victorian Government

Implementation • Project-specific requirements to minimise

of the Climate Change greenhouse gas emissions
Policy Objectives
• Procurement of outputs that are resilient
against the impacts of climate change

Victoria’s Social Procurement Framework 8

9 Victoria’s Social Procurement Framework
02
Social procurement

Victoria’s Social Procurement Framework 10

Social procurement is when 2.1 PURCHASING FROM 2.2 PURCHASING
organisations use their buying SOCIAL ENTERPRISES FROM ABORIGINAL
power to generate social Social enterprises are businesses BUSINESSES
value above and beyond that trade to intentionally The Victorian Government has
tackle social problems, improve
the value of the goods, communities, provide people
committed to a one per cent
Aboriginal business procurement
services, or construction access to employment and training, target by 2019-2020. The Victorian
or help the environment. They
being procured. derive most of their income from
Government defines an Aboriginal
business as:
In the Victorian Government trade (not donations or grants) and
use the majority of their profits (at • at least 50 per cent
context, social value means
least 50 per cent) to contribute to Aboriginal and/or Torres
the benefits that accrue to all
their social mission. Strait Islander-owned;
Victorians when the social and
sustainable outcomes in this Among other benefits, social • undertaking commercial
Framework are achieved. enterprises play an important activity; and
Social procurement can be grouped role in providing transitional • main business location
into two broad approaches: employment for disadvantaged is in Victoria.
job seekers, including people
1. Direct – Purchasing of goods, with disability, as a pathway Tharamba Bugheen – Victorian
services or construction (by to employment in mainstream Aboriginal Business Strategy
government) from: businesses. Social enterprises can 2017-2021 highlights that the
a. Victorian social enterprises; also provide ongoing employment Victorian Aboriginal business
options for disadvantaged job sector is large, diverse, and
b. Victorian Aboriginal seekers who may not be well growing. The sector includes
businesses; or placed to sustain mainstream for-profit businesses, Traditional
c. other social benefit suppliers, employment over the longer term. Owner corporations, social
including Victorian Australian enterprises and community
Disability Enterprises. enterprises in metropolitan
and regional areas. Land-based
2. Indirect – Using the invitation to Aboriginal businesses, including
supply process and clauses in Traditional Owner corporations,
contracts with the private sector are active in several fields,
to seek social and sustainable including primary production,
outcomes for Victorians. natural resource management,
ecosystem services and
Victoria’s Social Procurement
cultural tourism.
Framework will support the
expansion and standardisation
of social procurement practice
across all government procurement

Kalinya servicing the Department

activities through both direct
and indirect methods.
The Government acknowledges of Premier and Cabinet
that regional SMEs play a critical
role in the sustainability of regional
Purchasing from Aboriginal businesses
economies and communities. Aboriginal businesses provide a diverse range of goods
In applying this framework, and services that can be used by all areas of government.
government departments and The Victorian Government’s Department of Premier and
agencies are encouraged to Cabinet, for example, has purchased the services of
consider how they can use Kalinya Communication – an Aboriginal communication
place-based approaches to consultancy – to provide strategic communications
address entrenched disadvantage advice, professional editing, and supported research
and support regional SMEs. into media bias in reporting of family violence.

11 Victoria’s Social Procurement Framework

2.3 PURCHASING 2.4 SUPPLIERS THAT
FROM AUSTRALIAN PROVIDE INCLUSIVE
DISABILITY OPPORTUNITIES
ENTERPRISES This framework seeks to incentivise
Australian Disability all suppliers and supply chains to
Enterprises (ADEs) are adopt and maintain fair, inclusive
Commonwealth-funded and sustainable business practices.
and generally not-for-profit The private sector plays a vital role
organisations operating in a in providing direct employment
commercial context, specifically for people from disadvantaged
to provide supportive employment communities, and in providing
opportunities to people with employment opportunities that
moderate to severe disability. are gender equitable and inclusive
Some ADEs also operate as of people with disability.
social enterprises. Under this The framework incentivises the
framework, the Government employment of disadvantaged
encourages engagement with Victorians by suppliers, to maximise
Victorian ADEs that offer the positive employment outcomes
award‑based pay rates for they can provide. The range of
all staff. employment programs supported
through Jobs Victoria present
a strategic mechanism through
which suppliers can leverage from
existing Government programs
to support more job seekers at
risk of being left behind into work.

Melton City Council, Citywide and the Brotherhood

of St. Laurence (BSL)
Using targets to deliver employment outcomes
Melton City Council recently went to market for provision of open space
services. As part of their procurement process, the Council included
a 10 per cent target for suppliers to offer employment for local people
experiencing unemployment. In responding to this tender, Citywide
partnered with the BSL in their successful response. The BSL provided
identification of personnel, pre-employment training and mentoring.
They also provided training and post-placement support for employers to
assist them in integrating new staff who may require additional mentoring.
Twelve months on, more than 10 per cent of the workforce (9 out
of 70 employees) is filled by people previously having difficulty gaining
employment. Supplier market collaboration with the community sector
has helped to deliver an outstanding outcome.

Victoria’s Social Procurement Framework 12

13 Victoria’s Social Procurement Framework
03
Sustainable procurement

Victoria’s Social Procurement Framework 14

 In addition to the social outcomes described in the previous
section, the Government is committed to achieving positive
environmental outcomes through sustainable procurement
practices, which achieves value for money while minimising
impact to the environment.

Reduction of air travel CO2 emissions

Working with suppliers to achieve environmental sustainability
The Department of Treasury and Finance (DTF) and Department
of Environment, Land, Water and Planning (DELWP) offset their travel CO2
emissions through the purchase of carbon credits. These carbon credits
support the Lavers Hill reforestation project on the Great Ocean Road.
This project was established in partnership with the Victorian
Government’s travel provider, CTM, and specialist supplier, The South
Pole Group. These providers supply an end-to-end solution to DTF and
DELWP, including tracking of emissions, automatic addition of the offset
cost to all travel itineraries and the purchase of carbon credits.
The typical cost to DTF and DELWP for offsetting a return air trip to Sydney
is approximately $4. DTF is working with other departments and agencies
to promote uptake of this seamless solution.
DTF is also working to reduce demand for air travel by promoting
alternatives such as audio-video conference facilities. By making it easier
for staff to book conference calls, and adding links to these facilities
on the CTM travel portal, DTF is actively seeking to change purchasing
behaviour to reduce expenditure and emissions.

15 Victoria’s Social Procurement Framework

Sustainable procurement practices may include:
• maximising recyclable/recovered content;
• minimising waste and greenhouse gas emissions;
• conserving energy and water;
• minimising habitat destruction and environmental degradation; and
• providing non-toxic solutions.

Under this framework, the Victorian Government promotes

sustainable practices that go beyond compliance requirements
to both minimise adverse environmental impact and deliver
positive environmental outcomes.

Sustainability Victoria
Supporting supplier development for social
and environmental outcomes
Waste management has been a key area of growth in social
enterprise, and an example of integrated triple-bottom-line
outcomes through procurement. Social enterprises such
as Outlook, which works for a range of municipalities across
Melbourne, not only provide training, skills, and employment
for Victorians with disability, but increase the diversion
of waste from landfill.
Sustainability Victoria has supported the development of social
enterprises’ capacity, such as Outlook, through its Social Value
from Waste (SVfW) Grants Program, which commenced in 2014.
The program aims to build the capacity and capability of social
enterprises, including in this case, targeted support to Outlook
to build a new e-waste facility in Officer, providing training,
skills, and employment for Victorians with disability.

Victoria’s Social Procurement Framework 16

17 Victoria’s Social Procurement Framework
04
Framework requirements
and expectations
The framework is to be applied to procurement of all goods,
services and construction, based on a scalable approach linked
to procurement activity expenditure. The thresholds outlined
are consistent with those used across government to determine
requirements under policies such as Victorian Industry
Participation Policy (VIPP) and Major Projects Skills
Guarantee (MPSG). Two tables are provided:
• Individual procurement activity The Government does not
requirements – Table 3 outlines expect every procurement to
buyer requirements and the pursue all of the recommended
recommended approach for actions in Table 5.
the inclusion of social and
Government buyers are expected
sustainable objectives into
to decide which social and
procurement planning
sustainable objectives are to be
processes within each
pursued and prioritised in each
expenditure threshold.
procurement. While this permits
• Government department and flexibility for government buyers,
agency requirements – Table the recommended approaches
4 outlines the requirements for are expected to achieve greater
each department and agency commonality across government.
to be consistent with the
The framework is supported
framework’s objectives.
by guidance, tools and templates
for the benefit of government
buyers and suppliers.

Victoria’s Social Procurement Framework 18

Table 3: Individual procurement activity requirements for government buyers

Victoria’s Social Procurement Framework Individual procurement activity requirements

Below threshold Lower band Middle band Upper band

Regional under Regional $20 to $50 million Over $50 million
$1 million $1 to $20 million
Metro or State-wide Metro or State-wide
under $3 million $3 to $20 million

Planning requirement Incorporate SPF objectives and outcomes into Complete a Social Procurement Plan during
for government buyers regular procurement planning procurement planning

Encouraged Proportionate Targeted Strategic

Seek opportunities Use evaluation criteria Include performance Include targets and
where available to (5 to 10 per cent standards and contract requirements
Described approach directly or indirectly weighting) to favour contract requirements that pursue social
procure from social businesses whose that pursue social and sustainable
enterprises, ADEs practices support and sustainable procurement
or Aboriginal social and sustainable procurement objectives
businesses procurement objectives objectives

Recommended actions for government buyers

Seek opportunities to Consider whether part Set targets for supplier expenditure with social
Social Enterprises, directly or indirectly of the procurement enterprises, ADEs or Aboriginal businesses and
procure from social can be unbundled for ask suppliers to demonstrate how they will
ADEs and Aboriginal
enterprises, ADEs or delivery from social meet targets
businesses Aboriginal businesses enterprises, ADEs or
Aboriginal businesses

Disadvantaged Set supplier targets for employment and

communities training for disadvantaged Victorians

Ask suppliers to Include performance Include industry-

demonstrate gender standards on labour appropriate targets
Gender equitable employment hours performed for labour hours
practices in weighted by women to be performed
framework criteria by women

Ask suppliers to Include performance Include targets

demonstrate inclusive standards on labour for labour hours
employment practices hours performed to be performed
Disability
for Victorians with by Victorians with by Victorians with
disability in weighted disability disability
framework criteria

Ask suppliers whether they offer family violence

Family Violence Leave
leave in weighted framework criteria

Fair and safe Ask suppliers to demonstrate compliance with

workplaces industrial relations laws

Ask suppliers Include requirements as relevant on

to demonstrate recycled content, waste management
Environmental environmentally and energy consumption.
sustainability sustainable business
practices in weighted
framework criteria

Where procurement includes a design

Climate change component, include requirements on greenhouse
gas emissions and climate change resilience

19 Victoria’s Social Procurement Framework

Table 4: Government department and agency planning requirement

Victoria’s Social Procurement Framework department and agency planning requirement

Social Procurement Strategy Each department and agency is to prepare a Social Procurement Strategy,
which includes consideration of the following areas:

Planning • Leadership and governance

–– Key priorities and objectives.
–– Roles and responsibilities.
–– Consideration of department or agency targets, such as:
a. meeting the required 1 per cent Aboriginal business
procurement target;
b. social enterprise expenditure target (percentage or amount);
c. targets for gender equality, family violence leave and employment
of Victorians with disability;
d. target for job creation from priority disadvantaged
communities; and
e. target for proportion of suppliers with environmentally
sustainable business practices.
• Policy and process
–– Integration into policy, processes, documentation, tools, and templates.
• Planning and opportunity analysis
–– Integration into forward procurement planning.
–– Completion of an opportunity and risk analysis.
–– Prioritisation of activities.
• Action plan
–– Key actions, timeframes, and owners.

Staff and stakeholder • Communication and education for staff and key stakeholders
communication and education in delivering against the framework, including:
–– targeted awareness and training programs (e.g. procurement
teams, project managers, buyers); and
–– provision of access to expertise.

Supplier communication, • Supplier development and education, including:

education, and development
–– targeted communication to suppliers on expectations and
opportunities under the framework;
–– targeted awareness sessions for key suppliers and access
to training programs as required; and
–– proposed supplier development activities, including engagement
with social enterprises, ADEs and Aboriginal businesses.

Measurement and reporting • Development of a reporting and management framework that includes:
–– a data collection model to track against government requirements and
the targets and measures outlined in the Social Procurement Strategy;
–– tools and methods for data collection and analysis; and
–– reporting on achievements against the strategy and
organisational targets.

Victoria’s Social Procurement Framework 20

21 Victoria’s Social Procurement Framework
05
Embedding social procurement

Introducing a whole of government social

procurement framework requires a shift
in procurement practices whereby decisions
are based on an evaluation of social and
sustainable outcomes as well as price,
quality, and risk. Embedding this framework
will need consideration of:
1. alignment with government and departmental
procurement processes;
2. setting targets and measuring outcomes; and
3. an implementation plan for the framework.

Victoria’s Social Procurement Framework 22

 5.1 ALIGNMENT WITH THE GOVERNMENT’S
PROCUREMENT PROCESSES
Victorian Government procurement is governed through relevant Acts
and Regulations and through the Victorian Government Purchasing Board
(VGPB) for goods and services.
The VGPB processes shown in Figure 1 identify key steps in Annual
Procurement Planning and Individual Procurement Activity. While social
procurement practice should be incorporated into all stages, specific steps
have been highlighted below as key enablers of successful practice.

Figure 1: Social procurement throughout the procurement process

Planning phase
Planning
Annual

Conduct Conduct
Create Gather Develop
Identify complexity capability
procurement market category contract
catergory assessment by assessment to
activity plan intelligence planning strategy
catergory match complexity

Sourcing phase
Procurement Activity

Evaluate,
Review Conduct Develop plan
negotiate and
procurement market for market
select a
requirement analysis approach
supplier
Individual

Contract management phase

Create Commit Contract

Manage
a to a review or
contract
contract contract closure

Social procurement in the procurement process*

*VGPB procurement processes referenced

23 Victoria’s Social Procurement Framework

5.2 MAJOR PROJECTS
Social procurement approaches are increasingly being incorporated
into Victorian Government major projects. This framework draws on
this momentum and creates a consistent and coordinated approach.
The Government expects major projects to continue to drive innovation
and best practice.
This momentum leverages existing policies such as Local Jobs First – VIPP
and MPSG. These policies drive local industry participation and the
delivery of job outcomes in major projects and other procurements.

Level Crossing Removal Authority (LXRA)

Major projects creating meaningful employment
The LXRA (part of the Department of Economic Development, Jobs,
Transport, and Resources) has been undertaking social procurement
through each of its project packages. The Authority has established
a range of requirements, including a target that 3 per cent of the total
contract spend will go to social enterprises, Aboriginal businesses, and
direct employment of disadvantaged jobseekers in the supply chain.
LXRA has supported these targets with a comprehensive data collection
and dashboard reporting model, which it uses to provide monthly tracking
of progress for the suppliers and for Government. The targets, together
with a focus on tracking activity, have helped to drive a significant
response, particularly from ‘Tier 1’ suppliers, across the LXRA program
of major projects. The outcomes have included:
• major new expenditure creating growth and driving opportunities
for social enterprises and Aboriginal businesses throughout the
project supply chains;
• organisations such as Social Traders and Social Ventures Australia
working with buyers and social enterprises (particularly those
providing employment for people with disability or from disadvantaged
backgrounds) to build capacity to respond to the new opportunities;
• significant new employment outcomes for a range of target
disadvantaged communities working directly for private sector
providers across the supply chain; and
• helping to further embed supplier commitment to deliver on the
Government’s Local Jobs First – VIPP requirements and MPSG
targets and employment for disadvantaged communities.

Victoria’s Social Procurement Framework 24

 5.3 STATE PURCHASE CONTRACTS AND
PRE-QUALIFICATION REGISTERS
A substantial proportion of Victorian Government procurement is
undertaken under State Purchase Contracts (SPCs) and through supplier
pre-qualification registers. Over time, SPCs and registers will be adapted
to embed the framework’s objectives. Some opportunities exist under
existing contracts. Others will be considered when contracts are renewed.
While opportunities vary for each SPC and register, actions may include:
• increasing the number of targeted suppliers on panels and
registers, and making it easy for buyers to identify them;
• incorporating questions into panel rules and response templates
that incentivise gender-balanced and regionally located teams
on individual engagements; and
• working with suppliers on workforce development
and environmental sustainability.

Women Barristers Briefing Policy –

Department of Justice and Regulation
Gender equality in State Purchase Contracts
In 2015, the Government Legal Services Panel revived
a policy requiring private firms contracted by the
Victorian Government to:
• report on their briefing of female barristers;
• comply with the Victorian Bar’s Equal Opportunity
Briefing Policy; and
• report on their workplace equal opportunity
arrangements.

Reporting is published in the Women Barristers

Briefing Report – the report for 2009 to 2015 recorded
that female barristers received 25.4 per cent of total
fees paid to counsel and 34.9 per cent of briefs.
Women comprise 27 per cent of the Victorian Bar.

25 Victoria’s Social Procurement Framework

5.4 SUPPLIER CODE OF CONDUCT
The Victorian Government’s commitment to ethical, sustainable and socially
responsible procurement is reflected in its Supplier Code of Conduct,
designed to ensure that its suppliers maintain the same values.
The Code outlines the minimum ethical standards in behaviour
expected of suppliers when conducting business with or on behalf
of the State, in the areas of:
a. integrity, ethics, and conduct;
b. conflict of interest, gifts, benefits, and hospitality;
c. corporate governance;
d. labour and human rights;
e. health and safety; and
f. environmental management.

The Supplier Code of Conduct is available at

www.procurement.vic.gov.au/Suppliers/Supplier-Code-of-Conduct.
The Supplier Code of Conduct and this framework are complementary
policies. The Supplier Code of Conduct sets minimum standards
aimed at reducing harm, whereas this framework encourages
inclusive practices aimed at value creation.

Victoria’s Social Procurement Framework 26

27 Victoria’s Social Procurement Framework
06
Social procurement
planning and tactics

Victoria’s Social Procurement Framework 28

 This framework establishes a requirement for departments
and agencies to develop organisation-wide Social Procurement
Strategies. These need to support policy, practice and capability
development for staff, suppliers and supply chains. The flexible
application of this framework within existing procurement
practice seeks to ensure that social procurement is embedded
in ordinary government business, with minimal burden
on buyers or suppliers.

G21 GROW Program

Regional programs achieving local
and social outcomes
G21 GROW is a joint regional initiative between
the Give Where You Live Foundation and the G21
– Geelong Regional Alliance. Together with partners
across the government, private, community and
philanthropic sectors, GROW’s primary focus is on
creating job opportunities specifically benefiting the
most disadvantaged in the region’s community.
GROW has developed and implemented a social
procurement framework that is driving increased
local and social procurement.
This is a long-term strategy to deliver employment
opportunities through the delivery of specific projects.
The Year One (2015-16) Report Card on the Program
was released in May 2017 and the outcomes from
the first 18 Compact signatories included:
• 72 employment outcomes for GROW target
communities, including traineeships and
apprenticeships; and
• a 9.34 per cent shift to local procurement, or
$23.88 million into the region (which equates to
145 jobs).

There are now 70 Compact signatories from across

all types of sectors working on GROW action plans.

29 Victoria’s Social Procurement Framework

The framework also promotes the use of best practice sourcing tactics
to drive social procurement. Depending on the size, expenditure category,
and level of opportunity and risk, there are several tactics that can be
applied. Some of the more common approaches are highlighted in Table 5.

Table 5: Social procurement sourcing tactics

Social procurement Description

sourcing tactics

Bundle Increasing the size and scope of a procurement to enable

a social or sustainable solution.

Unbundle Decreasing the size and scope of a project/contract where

social enterprises, ADEs or Aboriginal businesses in the
supply market do not have the capacity to meet scope.

Evaluation criteria or targets Asking all businesses to demonstrate impact, while

for delivering social value communicating to the market the importance placed
on social value.

Evaluation criteria or targets Higher value contracts can require or encourage

for subcontracting suppliers to incorporate social enterprises, ADEs
or Aboriginal businesses in their supply chain.

Expressions of interest When there is limited knowledge of how social impact

could be addressed or there is a desire to encourage
innovation from the supply market.

Partnerships Creates long-term opportunities for innovation

around shared social and sustainable objectives,
including partnering with private sector and support
organisations or strategic matching of social enterprise,
ADE or Aboriginal business supplier capability with
a pipeline of work.

Supplier relationship Relationships and structured SRM processes enabling

management (SRM) engagement with existing long-term suppliers
to explore opportunities to strengthen the delivery
of social objectives.

Targeted panels Using panels as an opportunity to encourage

and enable market participation by social enterprises,
ADEs and Aboriginal businesses.

Targeted sourcing Allowing direct sourcing from known social enterprises,

ADEs and Aboriginal businesses with demonstrated
capability. Initially, this might apply to lower value
procurements as sector capability develops.

Victoria’s Social Procurement Framework 30

 6.1 PARTNERS AND SUPPORT AGENCIES
The Victorian Government works collaboratively with partners
and supporting agencies to:
• develop buyer and supplier capability;
• support suppliers with recruiting, pre-employment, on-the-job
training and mentoring; and
• connect buyers to certified social enterprises and certified
Aboriginal businesses.

The Victorian Government’s current social procurement

partnerships include:
• Kinaway – the Victorian Aboriginal Chamber of Commerce
supports Aboriginal businesses and entrepreneurs. Through policy,
advocacy, and representation services, Kinaway seeks to grow
the capacity of the Aboriginal business sector, entrepreneurs,
and Aboriginal business leadership in Victoria. In doing so, it aims
to have a positive and direct influence in increasing economic
participation by the Aboriginal community and its contribution
to the Victorian economy. Kinaway is developing and will maintain
a directory of Victorian Aboriginal businesses to further support
and promote the sector.
• Social Traders – Australia’s leading organisation that connects
social enterprise with social procurement opportunities. Through
certification and an annual buyer membership, Social Traders
links business and government buyers with social enterprise and
aims to create 1,500 jobs for disadvantaged Australians by 2021.
• Supply Nation – the Australian leader in Indigenous supplier
diversity, established in 2009 to connect its membership
of Australia’s leading government agencies and corporates
with 1450 Indigenous businesses across the country. Supply
Nation’s rigorous registration and certification processes ensure
members can be confident of Indigenous ownership. Supply Nation
has a team of specialist consultants across Australia working
intensively with Government and Corporate organisations
to embed supplier diversity into their supply chains.

31 Victoria’s Social Procurement Framework

Social Traders
Creating jobs through social enterprise
Social Traders supports the Victorian Government in delivering
on the Victorian Social Enterprise Strategy by:
1. Certifying social enterprises that meet the criteria (as outlined
in the Social Enterprise Strategy) and offering services to support
the growth and impact of business-to-business enterprises.
Specifically, Social Traders provides social enterprises with:
–– the ability to be recognised as a social enterprise and share
best practice and challenges with other social enterprise
procurement leaders; and
–– a range of tailored support for Social Traders certified social
enterprises to scale, grow and successfully deliver on the
contracts they win.
2. Helping to put social enterprises into supply chains by making
introductions, hosting networking events, and working with business
and government buyers to update their tender processes to open
new opportunities for social enterprises. Specifically, Social Traders
provides buyers with:
–– support to identify suitable providers from a database
of approximately 200 certified social enterprises (of which
more than 100 are based or operating in Victoria) to all staff
employed by the Victorian Government; and
–– the ability to track and report on the social impact of social
procurement expenditure (e.g. number of jobs created for
disadvantaged communities).

6.2 SUPPORT AND DEVELOPMENT FOR

DISADVANTAGED JOBSEEKERS
The Government’s existing employment, inclusion and training programs will
help support suppliers to find, employ and train disadvantaged Victorians.
The Government established Jobs Victoria to provide a comprehensive
approach to supporting job seekers at risk of being left behind.
Jobs Victoria is supported by arrangements with leading organisations
in the community sector and private sector employers.
Social enterprises, TAFEs and other training providers play a significant role
in offering disadvantaged and high needs Victorians the skills they need
to be job-ready now and in the future. The Government will seek to ensure
that training and skills gaps are identified and addressed on an ongoing
basis and the training and TAFE system’s role to deliver government
and community benefits are acknowledged.
The Government recognises the distinct role that TAFEs have,
as public providers who partner with industry and Government on
key economic priorities, in leading the training system in excellence
and innovation, providing essential life skills and support services,
and helping disadvantaged students and communities.

Victoria’s Social Procurement Framework 32

33 Victoria’s Social Procurement Framework
07
Implementation and reporting

Victoria’s Social Procurement Framework 34

 7.1 IMPLEMENTATION PLAN
The implementation of Victoria’s Social Procurement Framework will be
phased in throughout 2018-19. Specific activities, roles and responsibilities
will be determined through further consultation and development.

Action By when

Release framework along with detailed April-September 2018

guidance and tools for buyers and suppliers
to support planning and reporting
by departments and agencies

Complete roll out of the framework across September 2018

all government departments and agencies

Government departments and agencies July 2019

submit first annual report against
the framework

35 Victoria’s Social Procurement Framework

7.2 MEASUREMENT AND REPORTING
It is important that processes exist to measure the costs and
benefits of social procurement to ensure value for money is achieved
and substantiated. Sound measurement and reporting will enable
evaluation of the framework over time, and inform future consideration
as to the framework objectives and recommended approaches.
Government departments and agencies subject to the Standing
Directions are required to report on their social procurement activities
in their annual reports under this framework.
Reporting against the framework and delivery against the outcome
priorities is required against individual contracts and at the department
or agency level.

Table 6: Department and agency measurement for reporting

Level Measures

Contract Measuring supplier performance, such as:

• employment and training opportunities for
disadvantaged Victorians; and
• the proportion of supplier personnel by gender
and people with disability.

Department Aggregated outputs, such as:

or agency
• the number of social enterprises, ADEs and
Aboriginal businesses engaged and total spend;
• the proportion of suppliers that offer family
violence leave; and
• the proportion of suppliers with environmentally
sustainable practices.

Annual whole of government reporting will publish aggregated outputs

and benefits. On commencement, these whole of government reports will
focus on key indicators, with an aim to increase in sophistication over time.

Victoria’s Social Procurement Framework 36

08
Appendices

8.1 RELEVANT GOVERNMENT
POLICY, LEGISLATION,
AND INITIATIVES

Local Jobs First – Victorian Industry

Participation Policy (VIPP)
The VIPP is governed by the Victorian Industry
Participation Act 2003 (the VIPP Act), the main
Major Projects Skills Guarantee
objectives of which are to: (MPSG)
• promote employment and business growth by The MPSG provides opportunities for Victorian
expanding market opportunities for local industry; apprentices, trainees, and engineering cadets to work
• provide contractors with increased access to, and on some of Victoria’s biggest building and construction,
raised awareness of, local industry capability; infrastructure, and civil engineering projects. It is
designed to ensure that young Victorians in particular
• expose local industry to world’s best practice benefit directly from the major infrastructure projects
in workplace innovation, e-commerce and use being undertaken in Victoria.
of new technologies and materials; and
The MPSG requires all publicly funded building,
• develop local industry’s international construction, infrastructure, civil engineering, or other
competitiveness and flexibility in responding capital works over $20 million to use local apprentices,
to changing global markets by giving local trainees, or engineering cadets for at least 10 per cent
industry a fair opportunity to compete against of the total estimated labour hours.
foreign suppliers.
jobs.vic.gov.au/about-jobs-victoria/major-projects-skills-
The VIPP requires Government departments and guarantee
agencies to consider competitive local suppliers,
including SMEs, when awarding contracts valued at:
• $1 million or more in regional Victoria; or
• $3 million or more in metropolitan Melbourne
or for State-wide activities.

The VIPP focuses particular attention on strategic

projects valued at $50 million or more, with contractors
required to deliver Local Industry Development
Plans and commit to delivering local content
and job outcomes.
economicdevelopment.vic.gov.au/victorian-industry-
participation-policy

37 Victoria’s Social Procurement Framework

The Value Creation and Capture
(VCC) Framework
The VCC Framework is designed to encourage
Government sponsors and delivery partners for
capital investments, projects to develop public
land, and precinct projects, to consider broader
opportunities to enhance public value.
www.dpc.vic.gov.au/index.php/news-publications/value-
creation-and-capture-framework Tharamba Bugheen – Victorian
Aboriginal Business Strategy
Tharamba Bugheen supports Aboriginal
businesses to grow, extend networks and build
upon entrepreneurial skills within communities.
Fully participating in the economy provides
Jobs Victoria Aboriginal Victorians with the resources they
need to determine their own future. Economic
Jobs Victoria, established in May 2016, provides participation is critical to self-determination.
targeted support services to job seekers at risk www.vic.gov.au/news/tharamba-bugheen-victorian-
of being left behind, through: aboriginal-business-strategy.html

• the Jobs Victoria Employment Network

to support jobseekers;
• the Youth Employment Scheme and Youth
Cadetship Scheme to provide pathways
to public service careers;
• the Business in Transition Support program
to reduce the impact of retrenchments;
Victorian Aboriginal Economic Board
• Work and Learning Centres; (VAEB)
• the Jobs Victoria Innovation Fund to support The Victorian Aboriginal Economic Board was
innovative employment services; and established in June 2016 and is a key commitment
under the Victorian Economic Strategy. The Board’s
• JobsBank, by which businesses pledge to employ role is to champion economic development initiatives,
long-term jobseekers with complex needs. advise the Minister for Aboriginal Affairs on projects
to be delivered, and identify any barriers to Aboriginal
The VIPP focuses particular attention on strategic
economic development. The Board will also provide
projects valued at $50 million or more, with contractors
advice on the implementation of Tharamba Bugheen.
required to deliver Local Industry Development
Plans and committing to deliver local content A key priority for the Board is to improve Aboriginal
and job outcomes. procurement opportunities. In 2017, the Board hosted
an Aboriginal procurement event series to identify
jobs.vic.gov.au
procurement barriers and develop practical solutions
to support the growth of Aboriginal businesses. These
events highlighted the Government’s commitment to
procure from Aboriginal businesses, and encouraged
the private sector to do the same.
www.vic.gov.au/aboriginalvictoria/policy/victorian-aboriginal-
economic-development.html

Victoria’s Social Procurement Framework 38

Victorian Government Purchasing
Board (VGPB)
The VGPB has a supply policy framework that
recognises procurement as a core business function.
The framework uses a complexity and risk-based
model to inform the approach to market. The

Victorian Small Business Commission

framework covers the whole procurement lifecycle
and is underpinned by high levels of probity,
accountability, and flexibility with a strong focus
The Victorian Small Business Commission promotes
on value for money, more interactive engagement
a fair and competitive environment for Victorian
with the market and productivity improvement.
small business to operate, grow, and prosper.
All Victorian Government organisations subject to The Commission’s support extends to social
VGPB policies must operate under the VGPB policy enterprises and Aboriginal businesses, including
framework for non-construction goods and services. programs and training to help win business.
This includes contractor adherence to the Supplier
www.vsbc.vic.gov.au
Code of Conduct.
Victorian Government Purchasing Board (VGPB) Framework
and associated policies
www.procurement.vic.gov.au/Buyers/Applying-the-VGPB-
framework
Supplier Code of Conduct
www.procurement.vic.gov.au/Suppliers/Supplier-Code-of-
Conduct Absolutely everyone: state disability
plan 2017-2020
Every opportunity: Victorian economic participation
plan for people with disability 2018-2020
The state disability plan tackles the negative
Victorian Social Enterprise Strategy attitudes and barriers that more than one million
Victorians with disability deal with on a daily basis.
The Victorian Social Enterprise Strategy advocates In response to the plan’s key priorities, Every
for greater coordination across government to support opportunity: Victorian economic participation
social enterprises. The strategy is the first of its kind plan for people with disability 2018-2020 was
in Australia, and includes eight initiatives across launched in February 2018.
three action areas to support the growth of the
social enterprise sector and inclusive economic www.statedisabilityplan.vic.gov.au/every-opportunity
growth across Victoria. The action areas are:
Every opportunity outlines 21 actions to improve
1. increasing impact and innovation; work, study and business opportunities for Victorians
with disability, and to maximise the benefits of the
2. building business capacity and skills; and
National Disability Insurance Scheme.
3. improving market access.
Every opportunity will drive positive change across
jobs.vic.gov.au/about-jobs-victoria/victorian-social- the economy by activating two major stakeholders
enterprise-strategy – government itself (as a major employer and
purchaser of goods and services) and the broader
Victorian business community.
www.statedisabilityplan.vic.gov.au

39 Victoria’s Social Procurement Framework

Safe and Strong: Victoria’s Gender
Equality Strategy
This strategy sets out a framework for enduring
and sustained action over time. It aims to progressively
build the attitudinal and behavioural change required
to reduce violence against women and deliver
gender equality.
The progressive introduction of gender ethical
procurement policies is a founding reform within
Safe and Strong. Policies in relation to contracted
organisations, suppliers and funded agencies,
to encourage and promote commitments to family
leave, work towards gender equality in their own 2017 ISO: 20400 Sustainable
Procurement Standard
workplaces and (where relevant and appropriate)
to reflect gender equality considerations
in procurement contracts.
The new 2017 ISO: 20400 Sustainable Procurement
www.vic.gov.au/system/user_files/Documents/women/161108_ Standard creates a global framework to stimulate
Victorian_Gender_Equality_Strategy_ONLINE.pdf the integration of social, economic, and environmental
objectives into strategic procurement practice.
Building on progress to date for environmental
sustainability and climate change, the Standard
paves the way for further development work
by the Victorian Government.
www.iso.org/standard/63026.html
Climate Change Act 2017
The Climate Change Act 2017 provides Victoria with
a world-leading legislative foundation to manage
climate change risks, maximise the opportunities
that arise from decisive action, and drive our transition

Infrastructure Sustainability Council

to a climate resilient community and economy with
net zero emissions by 2050. It gives effect to the
majority of the commitments set out in the Victorian
Government Response to the 2015 Independent
of Australia (ISCA) Rating Scheme
Review of the Climate Change Act 2010. ISCA provides a comprehensive rating system for
www.climatechange.vic.gov.au/legislation/climate-change- evaluating sustainability across design, construction,
act-2017 and operation of infrastructure. ISCA evaluates
the sustainability (including environmental, social,
economic and governance aspects) of infrastructure
projects and assets. An update to this scheme
is planned at the time of the development of
Victoria’s Social Procurement Framework.
isca.org.au/is-rating-scheme/about-is

Victoria’s Social Procurement Framework 40

8.2 TERMS AND DEFINITIONS
The following terms used in this document – and in the accompanying suite of guidance materials – have
been defined to establish a shared social procurement language and are consistent with related Government
legislation and policy, where applicable.

Term Definition

Climate Change The policy objectives set out in section 22 of the Climate Change Act 2017 (Vic).
Policy Objectives

Construction Includes ‘Works’ and ‘Construction Services’ as defined in the Ministerial

Directions for Public Construction Procurement in Victoria.

Disadvantaged Victorians Victorian people or groups that are in unfavourable circumstances or

considered to be vulnerable, especially in relation to financial, employment
or social opportunities. This may include, but is not limited to, youth, long-
term unemployed, people with disability, refugees, migrants and persons
needing to develop skills to become work ready.

Long-term unemployed A person who has been unemployed for 12 months or more excluding people
undertaking studies.

Victorians with disability Victorian people who have long-term physical, mental, intellectual or sensory
impairments which in interaction with various barriers may hinder their full
and effective participation in society on an equal basis with others.

Standing Directions Standing Directions of the Minister for Finance 2016 under the Financial
Management Act 1994 (Vic).

Women in non-traditional Women working in technical or operational fields such as mining,

trades or professions construction, or utilities, with trade or higher education qualifications in the
areas of building and construction, architecture, engineering, surveying,
business, economics, and law.

Workers in transition Jobseekers who are recently retrenched or facing pending retrenchment
due to business closure or industry transition, who require further training or
on-the-job support to transition to new employment.

Disengaged youth People aged 15 to 24 years not studying and seeking full-time work.

41 Victoria’s Social Procurement Framework

DEDJTR-11427/18
Government Inquiry:
Implementation Plan