Social Procurement in 2021: Unprecedented potential for a paradigm shift

Jan 4th, 2021

As we enter 2021, we find ourselves facing the unprecedented potential of a procurement paradigm shift. Can we move social procurement from the exploration phase to a place of widespread adoption and implementation?

The term paradigm shift refers to a major change in the concepts and practices of how something works and how something is accomplished. Once a critical mass of organizations embraces the new concepts during the discovery and design phase, then a paradigm shift occurs.

What do we need to propel social procurement along the path from early exploration to majority user adoption?

Social procurement may be the next evolution of effective and pragmatic procurement practices, but it is still an emerging concept and practice. Social procurement leverages a social value from existing procurement. Social procurement provides the capacity to transform procurement from the traditional model of merely an economic transaction between buyer and seller, to a means for social transformation in communities. No longer will procurement be just about lowest price, but rather, which supplier offers the best value; including competitive price, required technical and product quality, environmental awareness and social outcomes.

Social procurement, depending on the purchaser’s goals, can include employment for persons facing barriers, training and apprenticeships, purchasing from social enterprises and diverse-owned suppliers, and local economic development.

However, the path to social procurement is not simply a plan for an event. The shift to social procurement requires a process that involves connecting goals to policy; learning and piloting new practices; adjusting relationships and procedures; moving to integrated measurement evaluations; and underlying it all, the need for attention to the change-management conditions and supports.

The challenges to this change have a set of real and perceived historic hurdles that still exist. Social procurement needs greater awareness and evidence to dispel the dogged myths about added costs, lower quality, legal barriers, trade agreement blockages, subjective evaluation assumptions, and the potential for social washing scams. Social procurement confronts the silos of government, or as one public employee stated, “It belongs everywhere but nowhere” within government. Social procurement dares the private sector to move their social purpose from acts of external corporate social responsibility and charity giving to integrate social value directly into their existing supply chain decisions and relationships.

But none of these struggles are insurmountable or even discouraging when weighed against the opportunities to address the social and economic needs that challenge our communities, like poverty, social exclusion, and employment barriers.

Stone Hearth Bakery produces high-quality European style breads, bagels and specialty baked goods, which are distributed throughout the Maritimes and available at most major grocery stores. Instead of relying on government funding, the social enterprise has been able to compete with traditional businesses in the industry, all while creating a life-changing impact on individuals facing barriers to employment.

Source: Social Enterprise Institute

Governments are gaining an understanding of how social procurement is actually a re-investment of taxes back into the communities it came from, resulting in stronger local economies.

The federal government initiatives include encouragement and directives in the most recent throne speech (1) and fall budget update (2), inclusion in the Public Service and Procurement Canada Minister’s mandate letter (3), the design and evaluation of several pilots and the implementation of Community Employment Benefit policy within Infrastructure Canada’s investments (4).

In multiple municipalities across Canada, we are seeing significant implementation efforts of social procurement and Community Benefit Agreements. The models and stories include the 21 rural and remote members of the Coastal Communities Social Procurement Initiative, and the cities of Vancouver, Calgary, Edmonton, Wood Buffalo, and Toronto; along with developing policy efforts in Winnipeg, Brampton, Peterborough, Ottawa, and Halifax.

Businesses recognize their competitive edge and employee engagement is being enhanced through integrating social value into their core values, including their direct purchasing and their own supply chain choices.

“As a general contractor, Chandos has a multi-layered supply chain that we leverage to support local economies and social enterprises through social procurement practices. When we enter a community, we work with local governments and trades to source labour from within the community. We choose sub-trades and vendors that are willing to do the same and seek out partners that prioritize the environment and social causes.”

Source: Chandos

Multiple actors from the public, private and community sectors, have been leading on the initial steps, setting the stage for the potential paradigm shift to social procurement.

“Building Up, a non-profit social enterprise, runs an intensive pre-apprenticeship trades training program for individuals who face barriers to employment. The profits generated by our work fund the social cause. 90% of Building Up graduates have moved into apprenticeships and/or full-time employment.

Source: Building Up

We have journeyed through discovery, design, and early explorations. Now we have the opportunity to move from merely early experiments and early adoption into a phase of significant implementation.

“There was some initial worry that unbundling the project would be an additional cost to the contract, but the results were actually the opposite. The multiple bids that came in demonstrated cost savings when compared to the project’s Phase 1 costs.”

Source: CCSPI

The next developments will build upon these existing policy frameworks and implementation strategies, but it won’t come without persistent, collaborative and effective efforts.

This new paradigm of collaboration and best value will require on-going soft and hard support for the change in procurement ‘culture’ and relationship models.

For purchasers we need to provide learning opportunities and knowledge sharing that will support implementation and minimize risk factors.

  • Provide policy models that vary across social value outcomes and respond to local goals
  • Assess and adjust existing supply chains to expand social value opportunities
  • Explore innovative procedures for engaging and contracting with social value suppliers (unbundle, Tier 2 and 3 supplier requirements, etc.)
  • Share RFx language that has been legally vetted and professionally reviewed
  • Share social value measurement criteria and compliance models

For social enterprises and social value suppliers we need to provide the capacity building and business acumen, and they need to respond effectively to procurement opportunities.

  • Expand supplier readiness tools and resources
  • Encourage broader supplier knowledge of procurement and awareness of bid opportunities
  • Build new relationships with purchasers to enhance capacity and opportunities
  • Share best practices to generate increased opportunities for scaling and collaborative bidding
  • Enhance demonstration of and stories about social value outcomes

Access to information on bids, knowledge about supplies, and creating new relationships between purchasers and suppliers will require facilitated networks and on-line platforms.

  • Establish an integrated network of local and regional social procurement ‘hubs’
  • Facilitate local and regional purchaser/supplier roundtables
  • Build an accessible and simple platform for social value directories

The potential of procurement initiated social value outcomes that is on the horizon offers a vision for the future we can’t turn our backs on. Buy Social Canada and many others have invested in the groundwork of early learning, resources, tools, pilots and policies that are the beginnings of a social procurement ecosystem in Canada.

What you can do in 2021 to support the social procurement shift:

  • Get certified as a social enterprise supplier to grow your market opportunities
  • Join the growing social procurement partnership programs to enhance your purchasing impact
  • Participate in learning and sharing of opportunities, like the BSC Community of Practice or the Supplier Readiness Program
  • Sign up for the Buy Social Canada monthly newsletter for the most up to date news and events to connect, share and learn

We can build healthier communities through leveraging a social value from existing procurement choices; but only if we work together, across sectors and across silos, then, we can accelerate this paradigm shift.

For more information or to discuss your options for engagement please contact us at: niamh@buysocialcanada.com or visit our website at www.buysocialcanada.com.

(1) “Going further on economic empowerment for specific communities, and increasing diversity on procurement” Page 27, A Stronger and More Resilient Canada, September 23, 2020

(2) The department will also be examining greater opportunities for supplier diversity across the government. Page 97, Supporting Canadians and Fighting COVID 19, Fall Economic Statement

(3) “With the support of the President of the Treasury Board, continue the modernization of procurement practices so that they are simpler, less administratively burdensome, user friendly, deploy modern comptrollership, encourage greater competition and include practices that support our economic policy goals, including innovation, as well as green and social procurement” Mandate Letter to Minister PSPC, December 2019

(4) https://www.infrastructure.gc.ca/pub/other-autre/ceb-ace-eng.html

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