Social procurement overview

Understand social procurement and how it applies to an Agency.

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What is social procurement

Social procurement is when Agencies use their buying power to generate social value. This social value is above and beyond the value of the goods, services or construction being procured.

In the Victorian Government context:

Government commitment to social procurement

The Social Procurement Framework is a whole-of-government policy that embodies the Victorian Government’s commitment to social procurement.

Victorian Government procurement is one of the largest drivers in the Victorian economy.

Decisions that Agencies make throughout the procurement process may have a significant impact. This can be on the economy, the environment, and the community. These decisions include:

  • what Agencies buy
  • who they buy from
  • what standards they set for their suppliers
  • how they manage their supply chains
  • what outcomes they aim to achieve during the procurement process

Value for money underpins Government procurement. Environmental, social and economic factors are a core component of value for money. These factors are also known as ‘broader Government objectives’.

For goods and services procurement, see Value for money: goods and services guide.

When does Social Procurement Framework apply?

The Social Procurement Framework applies to:

The Social Procurement Framework applies irrespective of the value of the procurement activity.

However, as the value increases, requirements and minimum expectations for Agencies increase accordingly. This is managed by using value thresholds.

How do Agencies comply with the Social Procurement Framework?

The Social Procurement Framework establishes mandatory requirements at two levels:

  • the Agency level
  • the procurement activity level

Agency-level requirements

Agencies must develop a Social Procurement Strategy.

Procurement activity level requirements

Agencies must embed social procurement in the:

  • planning phase, by either:
  • sourcing phase, by meeting or exceeding the minimum expectations for each value threshold
  • contract management phase, by measuring supplier performance and managing the delivery of any social procurement commitments

Social Procurement Framework objectives and outcomes

The Social Procurement Framework outlines the Victorian Government’s social and sustainable procurement objectives and corresponding social outcomes. In total, there are seven social procurement objectives and three sustainable procurement objectives.

Find out more about the Social Procurement Framework objectives and outcomes.

Approaches to social procurement

There are two approaches to social procurement:

Agencies should consider both direct and indirect approaches to social procurement during procurement planning. The preferable approach will depend on several factors, including the:

For example, an Agency may decide to unbundle a procurement activity to enable both direct and indirect approaches.

Value Thresholds

The Social Procurement Framework adopts a scalable approach to setting individual procurement activity requirements, based on the value of an individual procurement activity.

There are four value thresholds. The thresholds outlined are consistent with those used across government to determine requirements under policies such as Local Jobs First Victorian Industry Participation Policy and Major Projects Skills Guarantee.

Corresponding to each of the four value thresholds, the Social Procurement Framework requirements and expectations document sets out a ‘described approach’ and several ‘recommended actions’. The described approaches and recommended actions establish Government’s minimum expectations for undertaking social procurement in relation to each value threshold.

Help and support

For more information about social procurement, please contact Buying for Victoria.

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