Understanding Social Procurement

September 2022

by Fiona Nissen, Director at ArcBlue New Zealand

Many organisations have implemented social statements into their vision & values and are asking Procurement to align the sourcing process to meet the organisation’s objectives.

This is nothing new for Procurement – it remains important to align procurement strategy to the overall organisational strategy to deliver a competitive advantage and value to the entire organisation.

Social Procurement continues to be a developing concept within organisations and there is often some confusion as to what social procurement really is.

What is Social Procurement?

At ArcBlue, we have a clear definition of social procurement; When organisations use their buying power to generate social value above and beyond the value of the goods, services, or construction being procured.

There are 2 broad avenues where social procurement can be implemented:

Where the purchasing of goods or services is from a social enterprise.

This may be fair trade business, indigenous or other social benefits groups (e.g. disability services). A social enterprise is usually not for profit or feeds any profits they make back into their enterprise.

ArcBlue works collaboratively with a number of organisations who create social enterprise opportunities through supplier development and accreditation processes to expedite the procuring of services and goods from these social enterprises.

Where the tendering process creates an opportunity for social impact.

This type of social procurement can be seen in tendering processes where suppliers may be required to satisfy a certain requirement; such as providing direct employment for people from disadvantaged communities, including people with a disability, or requiring a pay equity statement.

Social impact tendering processes can be mandatory and must have an ability to be verified to ensure there is genuine social impact provided.

We help organisations formulate their tenders to ensure the market can respond to provide clarity on opportunities available.

What’s in it for my organisation?

The benefits of social procurement can be seen in a variety of ways, to both the community and to the tendering organisation. These benefits include innovation, reputation and integration.

There is a strong alignment with team job-satisfaction and engagement where businesses openly support social enterprise.

The opportunity for collaboration with government agencies, businesses and community groups creates efficiencies, value, and often, innovative ideas that are not always visible in the usual procurement process.

And last but not least, at ArcBlue, we think Social Procurement is The Right Thing To Do.

What should I do now?

Rather than responding in an ad hoc way to government and community demands, procurement teams need to plan and build their overarching social procurement strategy into their procurement framework.

To do this, there must be a clear understanding of where the organisation wants to be, and by working together, the social procurement framework can be integrated into organisational practice.

When engaging with social enterprise, it is important to remember they may not have strong procurement capability. Build the relationship prior to starting the tender process and ensure all suppliers can respond to your requests in a timely and fair way. Try and keep the “procurement lingo” to a minimum!

Get to know your supply chain – you may be surprised with how many opportunities for social procurement already exist.

Related Services

ArcBlue works within organisations to educate, build awareness and develop planned strategies to position them as ‘Social Procurement Ready’ organisations.

Find out how ArcBlue can help you