Gabrielle Williams, Minister for Government Services

Government procurement is one of the largest drivers in our state’s economy. Through innovative social procurement policy, government procurement decisions have the power to drive sustainable growth for all Victorians.

The Social Procurement Framework (the Framework) ensures that value-for-money considerations that underpin all Victorian Government procurement decisions encompass opportunities to deliver sustainable social, environmental and economic outcomes that benefit our communities.

During the 2022–23 financial year, the Victorian government spent $27.3 billion on goods and services and $21.8 billion on public construction and infrastructure¹. With careful planning in line with the Framework, we used this spending strategically to create employment opportunities for priority groups and make it easier for Victorian Aboriginal businesses, social enterprises and Australian Disability Enterprises to do business with government.

From 1 January 2023, the social procurement policy implementation and assurance functions were brought together under the Minister for Government Services at the newly created Department of Government Services (DGS). This consolidation improves coordination and delivers efficiency dividends among these different services.

In 2022–23, DGS focused on supporting government buyers in engaging with Victoria’s vibrant social enterprise sector and growing the Aboriginal business sector to strengthen Aboriginal Victorians’ self-determination.

DGS also improved social procurement data collection and digital tools to demonstrate the value of social procurement and help government hone in on areas where we can deliver valuable social, environmental and economic outcomes.

The Framework continues to be an important policy lever to generate social value above and beyond the value of the goods, services or construction being procured. With it, we can ensure that Victorians, regardless of gender, background or ability, share in our state’s prosperity. I am proud to share some of their stories in this report with you.

_{1: Figures were extracted from the 2022-23 Financial Report. The Victorian government goods and services spend figure used in this report was calculated by deducting finance expenses and fees, and insurance claim expenses from ‘Other operating expenses’.}

Victorian Government procurement is one of the largest drivers of the Victorian economy. Value for money is the key consideration underpinning all Victorian Government procurement decisions. The Social Procurement Framework (the Framework) ensures value-for-money considerations are not solely focused on price but encompass opportunities to deliver social and sustainable outcomes that benefit the entire Victorian community. In this way, the Framework helps government create economic benefit and jobs for all Victorians.

Objectives and outcomes

The Framework has 10 objectives, each with specific and measurable outcomes.

Social procurement objectives and summary of priorities

The Framework is used by more than 260 government departments and agencies³ to identify their social and sustainable procurement goals. These goals are detailed in the agency’s Social Procurement Strategy or Plan and will often align with other government strategies, priorities and initiatives. Departments and agencies report on progress towards their social and sustainable procurement goals in their respective annual reports and contribute to the whole-of-government report. The priority objectives of departments and core agencies in 2022-23 are depicted in Table 2⁴

_{2: For all publicly funded construction projects valued at $20 million or more, the Building Equality Policy replaces this objective.}

^{3: This refers to government departments and agencies subject to the Standing Directions 2018 under the Financial Management Act 1994 as at January 2023. 
4: On 1 January 2023, a number of Machinery of Government changes were instituted. The agencies and departments listed here were effective as of 30 June 2023. The same changes also created DGS. As of 30 June 2023, DGS was still establishing its central procurement processes including its social procurement strategy. DGS has therefore been excluded from this table. For further information, see: https://vpsc.vic.gov.au/about-public-sector/machinery-of-government/}

Social procurement is made possible through the support of a strong network for government buyers and suppliers. In 2022–23, the central teams supporting the Framework had agreements with the following support partners:

Kinaway

Kinaway Chamber of Commerce provides business support and advice to Victorian Aboriginal businesspeople and helps improve the visibility and networks of Aboriginal businesses to strengthen relationships and create opportunities.

Kinaway publishes a list of certified Victorian Aboriginal businesses and provides departments and Victoria Police with support services to identify opportunities to increase engagement with Victorian Aboriginal businesses. Kinaway advises that the number of certified businesses listed on its directory increased from 440 to 511 businesses in 2022–23, an increase of 71 members.

Social Traders

Social Traders certifies, strengthens and connects social enterprises with business and government members. By activating the power of social enterprise procurement, Social Traders creates positive impact through jobs, community services and support for the most marginalised. All Victorian Government buyers have access to the Social Traders Portal which includes a list of social enterprises, and some departments and agencies support their internal social procurement capability through a membership with Social Traders.

Social Traders advises that there were 509 active certified social enterprises as of 30 June 2023, with almost half of these businesses headquartered in Victoria. The Social Traders Impact Report FY22 reports on achievements generated by spend with certified social enterprises.

ICN

Industry Capability Network (ICN) is a network of independent experienced industry procurement and supply chain specialists introducing large and small businesses to projects across Australia and New Zealand. ICN is continuing to develop system capability to capture and report on the Framework commitments and achievements through the ICN Victorian Management Centre platform.

The DGS Social Procurement and Assurance team supports the effective delivery of the Framework across the Victorian Government and its supply chain, by working with project teams across government to ensure appropriate social and sustainable targets are implemented in high-value procurements. The number of Victorian Government projects valued at $20 million or more that were engaged by the team during the procurement process almost doubled from 53 in FY2021–22 to 98 in FY2022–23.

Collaborating with the project teams at the early stages of the procurement to identify opportunities optimises the outcomes that can be achieved. For example, the team recently collaborated with a government agency when procuring the construction of fit for purposes buildings which resulted in an additional economic value⁵ of $5.2 million for the Victorian community committed in the contract. This comprised spend with social benefit suppliers and employment of priority jobseekers.

During the 2022–23 financial year, there were several changes in the social procurement context which influenced the way the Framework is being implemented. These changes reflect a growing maturity across business and government in generating social and sustainable outcomes through procurement and more broadly.

Changing policy context

From 1 December 2022, all Victorian Government agencies are required to apply the Fair Jobs Code (the Code) to all tenders of $3 million or more. The Code enables the Government to use its purchasing power to promote secure employment and fair labour standards as well as ensure compliance with employment, workplace and industrial laws. The Code now captures the requirements under the Framework’s Opportunities for Safe and Fair Workplaces objective. 

More information is available on the Fair Jobs Code section of the Buying for Victoria website.

The Federal Government amended the Fair Work Act 2009 so that from 1 February 2023 all employees are entitled to 10 days of paid family and domestic violence leave each year. This includes full-time, part-time and casual employees. The change means that all tenderers should already provide family and domestic violence leave for their employees. This change by the Federal Government addresses the family violence leave outcome from the Women’s Equality and Safety objective.

A review of how these new policies affect the Framework is underway to consider if any consequential updates to the Framework are required.

Continuous improvement of policy implementation

To keep pace with the evolving and maturing social benefit supplier sector, the Social Procurement and Assurance team refined the reporting criteria for identifying in-scope social benefit suppliers for social procurement expenditure reporting. This enhancement targets social benefit suppliers certified as of 30 June 2023 for inclusion in reporting. It also provides greater assurance to Victorian Government buyers and suppliers that expenditure with these suppliers is creating genuine impact.

_{5: Additional value when compared to a similar project where the Assurance team was not involved. The value of employment for priority jobseekers has been calculated using the Australian Social Value Bank.}

Achievements since the launch of the Framework in 2018

Since 2018, Victorian Government departments and agencies⁶ have continued to directly invest in Victoria’s social benefit suppliers with expenditure of:

Achievements in this reporting period (1 July 2022–30 June 2023)

Victorian Government departments and agencies⁶ have directly spent:

Victorian Government departments and agencies indirectly spent⁹:

Suppliers to the Victorian Government employed¹⁰:

In FY2022-23 significant increases have been made in comparison to the benchmarks set in the inaugural 2018–19 annual report:

Case Study: The Victorian Government helps to create regional excellence in education and Aboriginal procurement

The Munarra Centre for Regional Excellence on Yorta Yorta Country in Shepparton will deliver culturally responsive education, employment, health and wellbeing programs to drive broad, long-term benefits for the region and Victoria. Thanks to social procurement, the construction of the centre has created jobs for Aboriginal people and work opportunities for Aboriginal businesses.

First Peoples State Relations and the Victorian School Building Authority (VSBA) have partnered with Munarra Limited to deliver the Munarra Centre for Regional Excellence, which was designed through a self-determined Aboriginal-led decision-making process. The campus will welcome Aboriginal and non-Aboriginal peoples of Australia and be home to the Munarra Academy. It will include programs from the University of Melbourne’s Academy of Sport Health and Education, which offers meaningful pathways to learning and work for students experiencing disadvantage, as well as the Goulburn Murray Indigenous Business Hub, the Kaiela Institute, the Rumbalara Aboriginal Football Netball Club, the Rumbalara Aboriginal Cooperative health services, and other partners.

The Munarra Centre is not only historic for what it is, but also for how it is being delivered. With over $36 million in funding to deliver the centre, the project represents one of the largest Victorian Government projects ever awarded directly to an Aboriginal-owned business based in Victoria.

The contract was awarded to TVN On-Country, a Kinaway certified 70% Aboriginal-owned commercial builder that is also passionate about helping Aboriginal youth gain ‘meaningful employment’.

The project has committed to ambitious social procurement targets and is on track to exceed them. The achievements between December 2022 and August 2023 include:

The project is also on-track to hit the target of 10% of total contract value spend with Aboriginal businesses (suppliers and subcontractors).

As a ground-breaking Aboriginal-led project, the Munarra Centre for Excellence highlights how social procurement can drive economic development and support Aboriginal-led initiatives and self-determination.

Construction on the centre commenced in February 2023, with the centre expected to open to the community in 2024.

Case Study: Social enterprise gains access to Victorian government business through State Purchase Contract

By combining demand for commonly used goods and services through the use of State Purchase Contracts (SPCs), government can harness greater economies of scale when negotiating with suppliers. Aggregating purchasing power allows organisations to negotiate better terms and conditions. It also reduces risk and the administrative burden on buyers and suppliers. Incorporating social benefit suppliers in SPCs improves social value created through government spending. 

The mail and delivery services SPC was released to market this year with an aim to include a social benefit supplier. This is the first time a certified social enterprise has been appointed as one of only four suppliers on a whole-of-government SPC alongside national and multinational suppliers.

Local Transit is a Social Traders certified social enterprise which specialises in providing transport to people with disability, as well as providing regular courier services within metropolitan Melbourne. Local Transit focuses on providing employment to migrants and refugees experiencing disadvantage, especially those from East Africa. They aim to help migrants and refugees secure meaningful and sustainable work which will, in turn, help with community integration.

In 2022–23, Local Transit entered into their first contract with Melbourne Water through the state purchasing contract to provide a courier service. This first contract was valued at $20,000 for the year. Melbourne Water reports the social enterprise has been very supportive, actively coming up with ideas around extra services they might need and ways to deliver additional.

The procurement process featured some flexibility for certified social benefit suppliers as well as a reserved place on the panel. For example, social benefit suppliers had the opportunity to nominate their geographic coverage, rather than meeting the requirement to service the whole of Victoria. In the case of Local Transit, this was focused on transit and deliveries around Melbourne.

Local Transit hopes that this contract will be the first of many future engagements with the Victorian Government through the State Purchase Contract.

_{6: Departments and agencies included are Department of Energy, Environment and Climate Action (DEECA), Department of Education (DE), Department of Families, Fairness and Housing (DFFH), Department of Health (DH), Department of Justice and Community Safety (DJCS), Department of Jobs, Skills, Industry and Regions (DJSIR), Department of Transport and Planning (DTP), Department of Premier and Cabinet (DPC), Department of Treasury and Finance (DTF), Victoria Police, Major Transport Infrastructure Authority (MTIA) and CenITex.} 

_{7: Certified Aboriginal businesses refers to Victorian Aboriginal businesses that are certified by Kinaway or Supply Nation. For the 2022-23 reporting period, only spend with Victorian Aboriginal businesses certified by Kinaway or Supply Nation has been reported to ensure alignment with the Framework definitions.} 

_{8: Certified Victorian Social Enterprises refers to organisations that are certified by Social Traders and operate and have business premises in Victoria. There was a policy change to discontinue use of the Map for Impact database as a source to identify and verify social enterprises. The Map for Impact will no longer be included under the operational definition of ‘social enterprise’ for Framework purposes.}

_{9: Only 2022-23 reporting period spend data associated with a social benefit supplier and approved by departments or agencies by August 2023 was extracted from the Victorian Management Centre (VMC) and included in this report. The Victorian Government departments and agencies that provided this data via the VMC includes: Community Safety Building Authority, Victorian Health Building Authority, Major Road Projects Authority, Melbourne Water Corporation, Southern Rural Water, Rail Projects Victoria, Greater Western Water, DTP, Level Crossing Removal Authority, West Gate Tunnel Project, North East Link Project, Parks Victoria, Court Services Victoria, Victorian School Building Authority, V/Line Pty Ltd, Alfred Health and Development Victoria.} 

_{10: Only 2022-23 reporting period employee data approved by departments or agencies by August 2023 was extracted from the VMC and included in this report. The Victorian Government departments and agencies that provided this data via the VMC includes: Major Road Projects Authority, Bendigo Kangan Institute, Development Victoria, Rail Projects Victoria, Level Crossing Removal Authority, North East Link Project, Victorian Health Building Authority, Vertic Agency, Court Services Victoria, Victorian School Building Authority, Greater Western Water, Melbourne Water Corporation, Community Safety Building Authority, Homes Victoria, Alfred Health, Parks Victoria, DTP and DH.}

The Opportunities for Victorian Aboriginal people objective focuses on generating employment and economic prosperity by purchasing from Victorian Aboriginal businesses and purchasing from suppliers employing Victorian Aboriginal people.

Since 2018-19 there have been fluctuations in direct spend with certified Aboriginal businesses, reflecting the varying needs of Government. Between 2021–22 and 2022–23 increases in expenditure with certified Victorian Aboriginal businesses were primarily attributed to the following projects and services:

• rebuild of Puckapunyal Primary School after it was significantly damaged by a fire in December 2020
• construction of 5 Female Amenities at Road Services Depots
• upgrade and modernisation of Hopetoun P-12 College
• Victoria State Emergency Service (VICSES) facility infrastructure
• road construction projects (refer to case study on Award winning Aboriginal procurement)
• cultural consultations for planned projects, developments and initiatives to occur on Wurundjeri lands
• cultural heritage services
• development of the Munarra Centre (refer to case study The Victorian Government helping create regional excellence in education above)

Graph 1: Direct spend with verified Aboriginal Businesses between 2018–19 and 2022–23

In 2019–20 there was a COVID-19 related spike due to significant spend on personal protective equipment for whole-of-Victorian-Government.

Award winning Aboriginal procurement

B.A Road Services is an Aboriginal owned and operated business that provides services to the asphalt industry. It specialises in industrial and commercial asphalt paving work.

In the 2020–21 Victorian Government Social Procurement Framework Annual report, B.A Road Services featured as an Aboriginal business that had been supported by Kinaway Chamber of Commerce to win contracts with Major Road Projects Victoria. In the 2 years since then, B.A Roads has grown their capacity and capability.

B.A Roads have been supported by Industry, having collaborated closely with BDM Construction. In the last year, the 2 businesses have worked together to deliver projects valued at more than $6 million across Victoria, including major infrastructure and urban business works. This partnership saw significant growth for both businesses, including creating additional employment opportunities for Aboriginal Victorians. In recognition, this partnership was awarded the Best Corporate Partner collaboration award at the 2022 Kinaway Chamber of Commerce Business Awards.

In December 2022, the Department of Transport and Planning entered into a direct 2-year contract with B.A Road Services for the Asphalt Patching of Various Arterial Roads and Freeways project. The works include undertaking major patching and preparation activities for sealing works across roads in the Melbourne Metro Western region.

The business has been operating for 4 years and has 4 Aboriginal employees (11% of the workforce). Brandon McRedmond, B.A Road Services Owner, has acknowledged his team of dedicated staff and their work to secure such a significant contract. 

The Opportunities for disadvantaged Victorians objective focuses on creating employment for cohorts that are most in need of support. This includes purchasing from social enterprises with a mission to support disadvantaged Victorians and from suppliers creating jobs for Victorians experiencing disadvantage (Note: on 1 July 2023, this objective was replaced with the Opportunities for Victorian priority jobseekers objective).

From 2018–19 to 2022–23, there is an overall upwards trend for direct spend with certified social enterprises led by a mission for one of the disadvantaged cohorts. The reduction in expenditure from 2021–22 to 2022–23 is primarily attributed to a refinement in the reporting criteria for identifying social benefit suppliers in scope for the reporting period. For further information on the refinement to reporting criteria see: Continuous improvement of policy implementation.

Graph 2: Direct spend with certified social enterprises led by a mission for disadvantaged cohorts between 2018–19 and 2022–23¹¹

Case Study: Internships building careers and connections to Victoria

The West Gate Tunnel Project (WGTP) has provided job readiness opportunities to asylum seekers by helping them build careers in construction. Over the course of the project, WGTP has hosted 15 interns as part of the Career Seekers program, with many interns completing multiple internships.

There was a particular focus on supporting asylum seekers through the program, with one third of those interns being asylum seekers or refugees. The interns were provided with the opportunity to learn more about the project and gain real-world experience to help develop new skills and build a career. The majority have then gone on to have paid work on the project.

Karam Benni was one of the interns who sought refuge several years ago and came to Melbourne in 2019. After leaving his home country of Iraq due to security concerns, Karam has faced significant challenges in finding opportunities that aligned with his career goals. However, with the support of Career Seekers and WGTP, he has managed to overcome these challenges.

Karam participated in the Career Seekers program, and during his time made such a strong impression on his colleagues that he was offered a part-time position in design and construction while he continued his university studies.

WGTP’s work in helping asylum seekers build careers, benefits the whole Victorian community by unlocking the talents of those from diverse backgrounds and addressing skills shortages.

Social procurement delivers more than economic benefits. It can help refugees, asylum seekers and others from diverse backgrounds facing employment barriers build a sense of pride and belonging in Victoria. In Karam’s words:

Strategic procurement delivering both social and sustainable outcomes

The Framework consists of both social and sustainable objectives. By incorporating social and sustainable procurement concerns into wider organisational planning, Yarra Valley Water recently demonstrated how multiple objectives can be met through one contract.

When Yarra Valley Water drafted their 2030 strategy, they set out to help communities thrive. Importantly, they decided that “social and sustainable procurement work will be the foundation of thinking about the impact of how [they] spend [their] money”.¹² This meant that during the 2022–23 financial year, when the water authority had to decommission 653 laptops, they set out to have the greatest impact on the community possible from both a social and sustainable perspective.

To do this, Yarra Valley Water reached out to Social Traders to find out if a social enterprise could undertake this work. Social Traders provided Yarra Valley Water a list of social enterprises that could generate work for Victorians experiencing disadvantage and help divert e-waste from landfill. Yarra Valley Water settled on Enable, being impressed with their business model that focuses on benefits to the community and protecting the environment.

Enable has a positive impact on local communities through a variety of social and sustainable pathways. The decommissioning and repurposing of the laptops contributed to these actions by:

• Creating work and offering job training for those facing barriers to employment, especially migrants and those with disability. This occurred through both the decommissioning work and the resale of IT items via The Click – a retail arm that is also a certified social enterprise and aims to create local jobs in a high-unemployment region, as well as providing affordable technology for eligible concession card holders.
• Distributing devices to communities in need. A particular focus has been on donations to students in need via Banyule Council.
• Diverting e-waste from landfill. Aside from reselling appropriate items, Enable also dismantled IT products for recycling.

Yarra Valley Water has demonstrated that when agencies build social and sustainable procurement into long-term planning, they are able to deliver numerous benefits to communities. Not only that, but when they work with innovative social enterprises like Enable, they can often deliver multiple benefits through the same procurement.

_{11: In 2018-19, data for this cohort was collected between January and June 2019 only.}

_{12: Extracted from the Yarra Valley Water 2030 Strategy.}

The Opportunities for Victorians with disability objective aims to help ensure all Victorians can participate fully in dignified work. This objective aims to create jobs for those with disability through purchasing from Australian Disability Enterprises and social enterprises with a mission to support people with disability, as well as purchasing from Victorian Government suppliers directly employing people with disability.

Direct spend with Australian Disability Enterprises and certified social enterprises led by a mission for people with disability, remained fairly stable until 2022–23. The reduction in expenditure in 2022-23 is primarily attributed to the refinement in reporting criteria between 2021–22 and 2022–23.

Graph 3: Direct spend with Australian Disability Enterprises and certified social enterprises led by a mission for people with disability between 2018–19 and 2022–23¹³

Case Study: Long-term partnership delivering opportunities for Victorians with disability

Country Fire Authority (CFA) has a long-standing partnership with Waverley Social Enterprises (Waverley Industries Ltd), that has delivered employment opportunities for Victorians with disability for over a decade.

Waverley Social Enterprises provides meaningful employment opportunities in a supported work environment. Consequently, Victorians with disability receive the support they need to participate and make worthwhile contributions to the workplace. They have been doing this across many industries for almost 40 years, including catering, packaging, assembly, grounds maintenance and onsite labour. Currently, Waverley Social Enterprises has 323 supported employees.

Their relationship with CFA began in 2012 when they won an open tender to provide catering services to the Bangholme training campus.

The campus is one of eight across the state which provides vital training and skills development for thousands of CFA volunteers to ensure they can continue to keep their communities safe.

CFA have been incredibly impressed with the quality of Waverley’s work, and the social enterprise has won subsequent tenders when CFA went out to market again in 2017 and 2021.

This support has been valuable for the social enterprise. “Waverley Social Enterprises love our partnership with the CFA,” reports Scott Haines, the Chief Commercial Officer for Waverley Social Enterprises. “The work provides our catering team with opportunity and meaning in their day as well as real social impact.” In the 2022–23 financial year, CFA spent $87,000 with Waverley Social Enterprises. This helped provide employment for 10 supported employees in their catering arm.

Caroline is one of those employees and has been working at the Bangholme site since the partnership commenced. Caroline lives with Advanced Impaired Learning and Cognitive capabilities. She not only prepares and serves food but conducts cleaning and recordkeeping. She also supervises a second team member on busy days.

Caroline is supported by Waverley Social Enterprises’ team HR Support Officer who assists with learning new tasks and upskilling. She completed a Certificate III in Commercial Cookery to become a qualified chef for this role. She works directly under Waverley Social Enterprises’ Head Chef who oversees her daily tasks, including all work delivered for CFA. Outside of this, Caroline, and all employees, have access to an Employee Assistance Program, mental health monitoring and appointment breaks, and National Disability Insurance Scheme (NDIS) support.

Caroline lives independently with her partner Matt, who also works at Waverley Social Enterprises. She reports that she likes working with CFA because it gives her independence and allows her to interact with the public.

Caroline is not the only one who feels they have developed. The Waverley Social Enterprises catering team is currently recruiting 2 to 3 more employees through organic growth of the business and are potentially looking to take on an apprentice with disability if the right candidate can be found.

CFA’s Business Coordinator for the Victorian Emergency Management Training Centres, Juanita Clifford, has praised the service provided by Waverley Social Enterprises to the Bangholme campus for the past 11 years.

The partnership between CFA and Waverley Social Enterprises highlights what can be achieved through ongoing relationships built through social procurement. By providing stable sources of income, social enterprises are able to grow and develop, delivering improved social outcomes for Victoria.

Case Study: Delivering accessible communications and creating employment for Victorians with disability

Melbourne Polytechnic is committed to creating a learning space and workplace that is accessible to people of all abilities – a place where all people are valued and respected, have equal access to opportunities and are encouraged to fulfil their talents and potential.

The institute identified a gap in its employee communications for over 30 staff for whom Auslan is their first language. To address this, Melbourne Polytechnic engaged Auslan Consultancy to provide translations for its regular employee communications. In doing so, Melbourne Polytechnic were able to create employment for Victorians with disability.

By utilising their team of Deaf professionals who specialise in video production, Auslan Consultancy were able to translate content offsite and deliver translated videos to Melbourne Polytechnic through post-production. Because sign language does not have the same grammar as English, and Deaf communities often have their own cultural norms, this process ensured accurate translation and the cultural appropriateness of the final videos.

The engagement with Auslan Consultancy began in the early days of the COVID-19 pandemic and has continued to the present. During the 2022–23 financial year, the procurement generated approximately 600 hours of work for 6 Victorians with disability working with Auslan Consultancy. The consultancy reports that while the initial engagement provided important financial support to help them navigate a difficult period, the ongoing work has played a vital role in boosting their reputation both during and after the height of the COVID-19 pandemic.

Melbourne Polytechnic’s emphasis on inclusivity both in communications and in their procurement demonstrates how government spending can generate multiple levels of value for the Victorian community. Not only did procuring translation services promote better inclusion of people with diverse needs at the institute, but the money spent also worked to help build careers and livelihoods for the Victorian Deaf community.

Case Study: Hospital construction provides work for Victorians with disability

The new Footscray Hospital is the largest health infrastructure project under construction in the state to date. Over its lifecycle, more than $48 million is expected to be invested in social procurement initiatives, with a focus on purchasing from Aboriginal businesses, social enterprises and Australian Disability Enterprises – collectively referred to as ‘Social Benefit Suppliers’ under the Framework.

More than $7.2 million has already been spent with social benefit suppliers since construction started in March 2021, with $3.7 million spent in the 2022–23 financial year. The project also has a particular focus on creating employment for Victorians most in need, with more than 18,000 hours being worked by Victorians with disability in the 2022–23 financial year. This is out of a total of 65,377 hours being delivered by people most in need including Aboriginal Victorians, Victorians with disability and Victorians experiencing disadvantage.

An example of how the project has engaged social enterprises and supported people with disability is through the collaboration between Lingyun Australia and Mambourin Enterprises. Lingyun Australia is one of the subcontractors building the façade for the new Footscray Hospital.

Mambourin Enterprises is a social enterprise with a mission to provide training and employment opportunities for individuals with disabilities, enhancing their quality of life and promoting social inclusion. They provide third party logistics, warehousing, packaging and assembly amongst other offerings. Lingyun Australia requires secure and reliable storage and timely delivery of construction materials to the site, which is provided by Mambourin Enterprises.

The collaboration between Lingyun Australia and Mambourin Enterprises is an example of social procurement delivering mutually beneficial results on a major infrastructure project. This partnership ensures the efficient supply of construction material to the New Footscray Hospital Project, which contributes to improved project timelines and quality. In addition, it has benefitted the 69 supported employees at Mambourin Enterprises. The contract has benefitted the organisation beyond the direct work being undertaken by the employees, by allowing Mambourin Enterprise to reinvest in their business, offering opportunities such as training.

This partnership demonstrates the benefits of social procurement to suppliers, the social enterprises and their beneficiaries, and also demonstrates the capability and commercial offering that is available in the social benefit supplier sector.

_{13: In 2018-19, data for this cohort was collected between January and June 2019 only.}

The Women’s equality and safety objective focuses on gender equality within Victorian Government suppliers, particularly equal employment at all levels within businesses including leadership and management positions.

Building Equality Policy

On 1 January 2022, the Government’s Building Equality Policy (BEP) came into effect. It applies to construction projects over $20 million. The BEP is a world-leading policy that sets onsite targets for employing women through government procurement on construction projects and mandates actions that are needed to drive systemic cultural change. Industrial Relations Victoria (IRV) within the Department of Treasury and Finance (DTF) is responsible for oversight of the BEP, while DGS supports the implementation of the BEP through the SPF.

In 2022–23 the BEP was applied to 28 projects with an approximate value of $3.07 billion¹⁴. The Social Procurement and Assurance team has supported BEP implementation by undertaking activities including assessing appropriate weighting during evaluation and application of BEP contract clauses.

The Victorian Government recognises the importance of monitoring and evaluating new policies. To ensure that any changes to BEP targets and Gender Equality Action Plan requirements are realistic, achievable and reflect the needs of women, an independent evaluation has been undertaken to:

• evaluate how well industry is meeting the BEP, and to what extent the 3 actions progressed the objectives of the BEP
• identify barriers to implementation of the BEP, potential changes and opportunities to support contractors to build capability; and
• identify and assess the impacts of the BEP on project delivery.

Case Study: Construction delivering opportunities for Victorian women in non-traditional trades

Court Services Victoria is currently delivering a new state-of-the-art facility in Melbourne’s West. Breaking ground in August 2022, on completion of the 2.5-year contract, the Wyndham Law Courts will be the largest court complex in Victoria outside of the Melbourne Central Business District. The development is Lendlease’s first project where the BEP applies. While it’s still early stages on site, approximately 10% of the work hours completed to date have been carried out by women. All major trades have had women in their workforce, resulting in 1,260 trade hours, 3,100 non-trade hours and 13,800 management and supervisory hours undertaken by women¹⁵.

All major trades have had women in their workforce, resulting in 1,260 trade hours, 3,100 non-trade hours and 13,800 management and supervisory hours undertaken by women¹⁵. 

With 60% of trade packages secured, the procurement process has offered the first opportunity to engage with all subcontractors to implement the BEP.

Lendlease’s project Gender Equality Action Plan meet the mandatory requirements under the BEP and include commitments that go beyond the minimum requirements including gender-neutral bathrooms, respectful workplace training and planned skilling and employment programs to support the achievement of BEP outcomes.

Lendlease Project Engineer, Lenita Psychogios has diverse expertise and experience across roles in design teams, as a lead contractor and a concrete subcontractor. Lenita is a member of Lendlease’s Wyndham Law Courts project site team where she is responsible for trade procurement and management across their onsite works. The BEP has meant that gender diversity discussions with trades have been brought to the forefront, which is leading to change and action. Lenita acknowledges that these discussions range from those that are at the start of their journey, to others that are leading the way.

An example of an organisation leading the way is steelwork subcontractor, Structural Challenge. Managing Director, Maria Mavrikos has been a strong advocate for women in construction throughout her career.

Maria’s team includes two women welders, an occupation that has significant skills shortages and traditionally poor gender diversity. As well as being a vocal role model, Maria has responded by providing learning and development opportunities to women, supporting them to follow their interest and upskill.

Maria supports the BEP and acknowledges that it is early days for the policy and there is a need to ensure that it is generating meaningful outcomes.

_{14: Contracts that applied BEP and had a contract start date that commenced during FY2022–23 are included in reporting.} 

_{15: These hours correspond to the project reporting period from August 2022 to 31 July 2023.}

The Sustainable Victorian social enterprise and Aboriginal business sectors objective directs spending toward social enterprises and Aboriginal businesses, helping ensure they remain financially sustainable and to support vibrant and inclusive economic growth.

Up until 2022–23, there was an upwards trend for direct spend with certified social enterprises. In 2022–23 reduction in expenditure with certified social enterprises is primarily attributed to a refinement in the reporting criteria for identifying social benefit suppliers in scope for the reporting period. For further information on the refinement to reporting criteria see: Continuous improvement of policy implementation.

Graph 4: Direct spend with certified Social Enterprises between 2018–19 and 2022–23¹⁶

For Direct Spend with verified Aboriginal Businesses between 2018–19 and 2022–23, see: Opportunities for Aboriginal Victorians.

Case Study: Long term contracts contributing to Aboriginal business sector sustainability

For the last 5 years, the Mallee Catchment Management Authority (MCMA) has been working with Traditional Owners to restore the remnants of Buloke Woodlands. MCMA contracted a Kinaway certified Aboriginal business, Dalki Garringa Nursery (‘Good Growing’ in the Wergaia language), to provide seed collection, tubestock propagation and planting services. MCMA has helped contribute to the sustainability of the Aboriginal business sector by contracting the nursery over 5 years – providing a stable stream of income over that period.

A part of the Barengi Gadjin Land Council Aboriginal Corporation, the nursery specialises in the growth and propagation of native flora. They combine a modern approach with Aboriginal knowledge to provide economic and employment development opportunities for Traditional Owners and the broader community.

For 2022–23, the contract was valued at $120,000. In that year, Dalki Garringa collected 45 kilograms of seed, propagated 7,000 tubestock and revegetated 60 hectares of remnant woodland.

The length of the contract has been particularly appreciated by Dalki Garringa, with Elizabeth Mace, their Operations Manager, noting that the nursery “has appreciated being able to work with the MCMA on this Buloke Woodland project. The duration of the project allowed for assurance and continuity. We have enjoyed building relationships with the MCMA Team.”

This case study highlights how ongoing work can be crucial for helping Aboriginal businesses become more sustainable. Aside from financial stability, according to Elizabeth, the length of the contract allowed Dalki Garringa “to develop and enhance our practices and methodologies within our nursery to create a quality product and efficient team.”

Dalki Garringa staff hope this development will help generate further success. 

_{16: In 2018-19, data for this cohort was collected between January and June 2019 only.}

The Sustainable Victorian regions objective seeks to generate employment for those living in postcodes identified by the Australian Bureau of Statistics (in the Index of Relative Socio-economic Disadvantage) as experiencing the greatest relative socio-economic disadvantage.

Case Study: Social procurement supporting Victorians in regions with entrenched disadvantage

Purchasing from regional communities can help businesses develop and provide opportunities for employment. The Department of Jobs, Skills, Industries and Regions (DJSIR) did exactly this when they procured from Hower Trailers.

The order was for 3 custom trailers – 2-cattle yard trailers and one for secure firearm storage – totalling almost $140,000. Given many of the units, Hower Trailers normally produce retail for under $10,000, this was a sizable purchase for a small business.

The business and its 4 employees are based in Delacombe, identified as a region with entrenched disadvantage in Victoria¹⁷. This was a significant factor in Hower Trailers being chosen as a preferred supplier.

Alan reports that because of the quality of their work, Hower Trailers is developing a good reputation and will hopefully be successful in securing future larger projects. By driving business toward regions with entrenched disadvantage, the Victorian Government can help communities develop and become more prosperous.

Case Study: Creating work for people living in regions with entrenched disadvantage through school construction

The Victorian Schools Building Authority (VSBA) is helping support local communities through the construction of a new school in Officer. During the 2022–23 financial year, 82 people living in regions of entrenched disadvantage were employed by SJ Higgins, the contractor, engaged by VSBA to construct the Kurmile Primary School.

_{17: Identified as living in a postcode listed as decile 1 on the SEIFA Index of Relative Socio-economic Disadvantage.}

The Framework works alongside other policies, such as Victoria’s Climate Change Strategy, the Recycling Victoria policy and the Recycled First policy, to avoid the harmful effects of environmental destruction on people and the economy, and to ensure future Victorians will be able to enjoy their natural surroundings for generations to come.

Environmentally sustainable outputs 

The Environmentally sustainable outputs objective encourages the use of sustainable resources as well as responsible management of waste and pollution from procurements. It also encourages the use of recycled content in construction.

Environmentally sustainable business practices 

The Environmentally sustainable business practices objective encourages the adoption of sustainable business practices by suppliers to the Victorian government.

Implementation of Climate Change Policy objectives 

Implementation of Climate Change Policy Objectives aims to both minimise greenhouse gas emissions and encourage government buyers to procure outputs that are resilient against the impacts of climate change.

Case Study: Testing floating wetlands provides opportunities for sustainable development

Environmental impacts and climate change mitigation measures are of utmost concern to Victorians. Westernport Water are trialling a nature-based solution for wastewater treatment, referred to as floating wetlands. These plant systems absorb nutrients and contaminants, as well as provide aquatic habitats for wildlife. Not only is the trial an opportunity to explore the effectiveness of a new water treatment method, but it presented an opportunity for Westernport Water to engage in sustainable procurement when purchasing the necessary equipment.

The trial represents a joint initiative between Westernport Water, Deakin University, Covey Associates, Clarity Aquatic and CSIRO with funding from the Victorian Government, Intelligent Water Networks and Yarra Valley Water. CSIRO are monitoring for the uptake of emerging contaminants and Deakin University are tracking greenhouse gas emissions, while Westernport Water are monitoring the nutrient uptake that improves the quality of the wastewater. If successful, Westernport Water’s floating wetlands will inform a planned project at the King Road Wastewater Treatment Plant for a more sustainable approach to management of wastewater.

Westernport Water are keenly aware of the importance of protecting the environment and how the discharge of wastewater affects aquatic environments. Consequently, social and sustainable procurement was given a strong 20% weighting during tender evaluation, including consideration for the use of recycled material in construction and emissions. The final product they settled on, through awarded partner Clarity Aquatic, was identified as substantially better for the environment than competing floating wetland products. Westernport Water have been impressed by the UV stabilised plastic, meaning there is no risk of microplastics being released into the environment through perishing materials. The system itself is modular so that it can be transported to other locations and reused. Not only that, but the system is 100% recyclable at the end of its life. Other materials, such as rocks and plants, were sourced locally.

While the use of the floating wetlands is a trial, the procurement demonstrates how the Framework helps deliver value-for-money that considers more than just the cost. Even though the system procured was not the cheapest on offer, Westernport Water reports that it offered the best environmental outcomes. Oceans and waterways are incredibly important. Reflecting that importance in procurement evaluations helps demonstrate the value that the environment represents to Victoria.

Case Study: Upgrading AAMI Park facilities using environmentally sustainable business practices

When Melbourne was selected as one of the host cities for the 2023 FIFA Women’s World Cup, the team at Melbourne & Olympic Parks (M&OP) saw an opportunity to upgrade the facilities at AAMI Park to meet the needs of fans, players and partners.

The entire package was valued at over $28 million (including a $25.15 million grant from the Victorian Government) across 6 key project streams:

• Improving player facilities
• Enhancing spectator experience
• Upgrading corporate, broadcast, and media facilities
• Sports light replacement
• Installing new state-of-the-art LED scoreboards
• Extending WiFi connectivity throughout the stadium

M&OP was committed to delivering strong sustainability outcomes throughout the project and was pleased to be able to partner with suppliers who shared their vision.

Recycling was identified as a key opportunity, with close to 42 tonnes of waste collected across the full program of works. Of this, an impressive 89% was recycled. 344 halogen lamps were replaced and recycled through the sports light upgrade, with 320 energy efficient LEDs installed in their place. Even the superseded grow lamps (specialised lights that stimulate turf growth on the pitch) were able to be rehomed to an interstate venue, extending their useful life.

Recycling was identified as a key opportunity, with close to 42 tonnes of waste collected across the full program of works. Of this, an impressive 89% was recycled. 344 halogen lamps were replaced and recycled through the sports light upgrade, with 320 energy efficient LEDs installed in their place. Even the superseded grow lamps (specialised lights that stimulate turf growth on the pitch) were able to be rehomed to an interstate venue, extending their useful life. 

The sustainability outcomes achieved through the AAMI Park works demonstrate what can be achieved when buyers and suppliers are aligned in their values. M&OP, the delivery team, and construction partners, worked collaboratively to deliver excellent sustainability outcomes while remaining agile enough to continue the delivery of fixtures and events at the stadium with minimal interruption.

This program of works was delivered by:

• Procuring agency: Melbourne & Olympic Parks
• Project Management and Delivery Team: Deloitte PDS Group
• Architect (Corporate, Media & Broadcast package and Videoboards): Cox Architecture
• Corporate, Media & Broadcast Head Contractor: Renascent Constructions
• LED Scoreboards: Hanlon Industries and Daktronics
• Sportslighting: Harris HMC, Aurecon Australasia, and Buckford Illumination Group

There are 2 types of government suppliers: social benefit suppliers and mainstream suppliers.

A social benefit supplier operates and has business premises in Victoria and meets one or more of the following criteria:

• is a social enterprise certified by Social Traders
• is an Australian Disability Enterprise providing ‘supported employment services’ as defined in s. 7 of the Disability Services Act 1986 (Cth)
• is a Victorian Aboriginal business, certified by Supply Nation or Kinaway.

To count an engagement in its social procurement activity reports, a department or agency must ensure the social benefit supplier is certified.

A mainstream supplier is any supplier that is not a social benefit supplier.

Direct and indirect social procurement

The Victorian Government delivers social and sustainable outcomes through both direct and indirect social procurement. Government buyers should consider opportunities to deliver social and sustainable outcomes as part of every procurement activity.

Delivering direct procurement, departments or agencies undertake a Victorian Government procurement process or use an established SPC to purchase goods, services or construction from a certified social benefit supplier.

When it comes to indirect procurement, departments or agencies purchase goods, services or construction from a mainstream supplier using invitations to supply and clauses in contracts to deliver social and sustainable outcomes. This can include subcontracting social benefit suppliers in supply chains.

What suppliers need to demonstrate

When making purchasing decisions under the Framework, government buyers must apply the same due diligence for social benefit suppliers as they would for mainstream suppliers. They should consider whether certified social benefit suppliers:

• are suitably qualified
• demonstrate experience and have a proven track record
• have the capacity and scale to deliver the requisite work
• comply with mandatory government agency contract terms
• comply with all relevant industry standards, regulations and legislation
• are competitively priced
• have business practices that align with the Framework, such as a corporate social responsibility policy, gender or disability action plans or engagement with social benefit suppliers

Social procurement benefits suppliers

The Framework integrates positive social and environmental outcomes with core business. The ability to demonstrate these outcomes makes suppliers more competitive when bidding for government work.

It also helps to foster workplace diversity, capability and productivity and contributes to innovative solutions for complex social, economic and environmental problems.

Find out more

More information for government buyers and suppliers about the Social Procurement Framework can be found on the Buying for Victoria website. 

Recycled First is a Victorian Government policy that requires bidders on government road and rail projects to demonstrate how they will optimise the use of sustainable products. 

Sustainability Victoria’s Buy Recycled directory helps you find products with recycled content. 

Business Victoria also has information on selling to government.