Discussion points fo Unconference

RR Ranjan Rajagopal Public Seen by 173

Points for inclusion/discussion at the Unconference -

  1. Policy: Learning from the lessons of Indigenous Procurement Policy:
    I. Main catalyst for success in this industry was the introduction of the mandatory Federal and Qld State wide procurement policy which set mandatory procurement target on a whole of Government basis.
    II. The policy provided the structural tailwinds which saw an exponential increase in the number of Indigenous businesses nationally and encouraged Indigenous entrepreneurs to set up enterprises or partner with non-Indigenous businesses to take advantage of the procurement policy.

    III. From a Social Enterprise perspective, a similar policy needs to be issued focusing on procurement from Social Enterprises.
    IV. Definition of a “Social Enterprises” is essential to ensure that the policy is supporting the intended audience. For instance, under the Indigenous Procurement Policy, a plethora of JVs were formed with 50% Indigenous shareholding to meet the policy definition. However, the businesses themselves had little to no Indigenous employment and hence there was no Indigenous economic development being created through their engagement. This is what is commonly referred to as “Black Cladding” in the Indigenous business sector. We need to avoid a similar unintended consequence for Social Enterprises. The definition and tests undertaken by Social Traders for membership is a good starting point from a governance perspective.

  2. Procedure: Empower Procurement Officers to engage with Social Enterprises
    I. Procurement Officers need to be educated and empowered to make procurement decisions based on value created by social impact, and not only on financial value.

    II. Tender evaluation criteria needs to change at a whole of Government basis so that price is not given the majority weighting. In our view, price should not exceed 50% on any tenders. Social impact should feature strongly in any tender evaluation, as well as the usual metrics of safety, experience, capability, quality, methodology and capacity etc.
    III. Price remains the major deciding factor (i.e. roughly 80% of the decision) and social enterprise, as a whole, can’t always and immediately compete at this level alone
    IV. Need to educate tender assessors and general buyers that $ is not the only potential value – need to recognise and measure the social value.
    V. Definition of “value for money” in tender evaluations should change to include value created by making social change. Price as a tender evaluation criteria should not be given any more than 50% weighting. We acknowledge that in Government contracts, it is taxpayer funded and therefore, price is important. However, public education will change public education on what “value for money” means. The public inherently want to do social good and will support social impact ventures.

  3. Capacity building:
    I. Items 1 and 2 above impact the “demand” side of the equation. The “supply” side needs equal consideration. Capacity Building is all about ensuring that there is a strong Social Enterprise sector across various disciplines to compete in the open market.

    II. The Private sector has a major role to play in building capacity and capability within the Social Enterprise sector. For instance, the private sector can provide financial capital to support Social Enterprises as well as human capital by way of long term secondments to enable skill transfer and internal processes and systems to ensure Social Enterprises remain sustainable and competitive.
    III. The relationship between the private sector and Social Enterprises need not be pro bono. In fact, it better that they are based on commercial terms so that there is a common interest to generate a benefit, either by way of social impact or financial profit.

    IV. It’s about transferring skills, whether this is tech capabilities, back office support or general education & qualifications
    Example – Bama Services & Downer (Tier 1 contractor) – effectively joint venture on civil roads project
    • Downer provided working capital and performance guarantees, as well as some general back office support
    • At the beginning of the project, Bama had one civil engineer and one staff who had Cert III in Civil Construction; at the end of the project, Bama employed another civil engineer and was able to train another two staff to obtain Cert III in Civil Construction. Bama management also benefited with the relationship as they learned cost control processes and project management processes in delivering large and complex civil projects.
    • It was about leaving a legacy beyond the job (ie: building capability within the Social Enterprise so that one day that Enterprise can scale up and be independent).

  4. General insights
    I. Need a government agency to lead the way! Eg: DTMR with respect to Indigenous Procurement and Defence at a Federal level.
    II. Need champions to advocate for effective procurement in various industries.
    III. The end game for Social Enterprises should be to win tenders based on criteria other than social impact. That is, based on the standard metrics of competency, safety, experience, quality and also price. The social impact created by Social Enterprises should be viewed as an added benefit which differentiates Social Enterprises from other businesses. This is the goal for Bama. We don’t want to be given a contract just because we are an Indigenous business. But, because we are an Indigenous business which employs and up skills Indigenous men and women, we offer an added benefit to the society. However, in order for Social Enterprises to get to that level, we need the 3 things listed above to happen in unison.


Rena Frohman Thu 25 Jul 2019 10:55PM

HI Ranjan@ranjanrajagopal
Thank you for contributing your ideas and insights - I think we have so much to learn from others and that these comments will contribute to rich discussions at the Unconference. I've opened your comments up to the Loomio community by inviting all to the thread. Hope others will contribute soon.