Defining Social Procurement

Purchasing social good(s): a definition and typology of social procurement
Craig Furneaux & Jo Barraket (2014)
Public Money & Management, 34:4, 265-272

Social procurement has gained attention in modern public management however, considerable differences exist in understanding what social procurement actually is.

This confusion has inhibited the growth of social procurement internationally and in Australia. The term has multiple meanings which are all explored in this paper.

Barraket and Furneaux identify that social procurement is not new with many examples from the 19th Century in the US, France, and England related to job creation in times of depression as well as for marginalised populations, such as the disabled, following World War I. Social procurement has grown to include other activities particularly with the rise of welfare purchasing by the state and even more recently through responsible procurement.
The research identifies four types of social procurement:

1. The acquisition of social services (ie drug and alcohol counselling, disability support) directly from third sector organisations.
2. Procurement of public works (with indirect social outcomes). The intent of the procurement process is to directly purchase a specific outcome, often a physical asset such as a building, or a service such as building maintenance with an additional indirect social outcome embedded in the contract.
3. Allocation of a percentage of work to a social enterprise. Like type two above, there is a package of procurement such as a new building or maintenance, but a portion of this work is allocated to be undertaken by social enterprise.
4. Corporate social responsibility (management of supply chains) the management of supply chains in order to ensure that ‘they do no harm in relation to social indicators such as labour conditions and human rights of workers’.

Acknowledging the breadth of social procurement communicated through this typology, the intent of this Knowledge Connect series is to focus on type two and type three social as outlined above: where social benefit is intentional and indirect.

The indirect nature of the social benefit is exciting because it presents procurement as a vehicle to create added social value. Whilst the idea is not new, this evolution has moved away from the strategic use of procurement in response to economic and social turmoil to the strategic use of procurement to create positive externalities at any time, by any procurer and for a range of different social benefits.

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