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From policy to practice - case study

From policy to practice: Implementing social procurement at Auckland Council.

Auckland Council are turning policy into practice – incorporating socio-economic outcomes into their procurement activities and learning along the way. This case study shows how the Auckland Council group is implementing broader outcomes into their procurement policy and practice.

During 2017, Auckland Council set their policy direction for procurement by publishing three key documents: the Auckland Council group sustainable procurement framework, policy and strategy. They set out six guiding principles for procurement: work together, value Te Ao Māori, be sustainable, act fairly, make the best use of every dollar, and to be affordable. Together, these principles set the policy direction for social procurement (which is another name for broader outcomes).

Two years on, and social procurement is now seen as ‘business as usual’. “For us it’s not a question of why should we include social procurement outcomes, but why not?” says Jazz Singh, General Manager Procurement.

Developing objectives and setting targets to get great results

Learning from overseas experience, the council decided to set targets to turn their policy into practice and achieve socio-economic outcomes aligned with the council’s goals. “We have had an enabling framework for a couple of years now and when we looked at the experience from overseas, we knew we had to make some bold decisions if we wanted to see a real step-change in outcomes,” says Aaron Donaldson, Head of ICT and Corporate Procurement, who is leading social procurement at the council.

Aaron teamed up with Frae Cairns, Strategic Social Procurement Specialist from The Southern Initiative (which is part of the council) to develop a set of objectives and targets. "If you look at the public sector in Australia, they didn’t get any real traction in their indigenous supplier spend until 2015 when they set targets, measured them and reported on them” says Frae.

ObjectiveTarget
Supplier diversity 5% direct spend with Māori-owned businesses, Pasifika-owned businesses or social enterprises. 15% of subcontract value to Māori- owned businesses, Pasifika-owned businesses or social enterprises.
Targeted employment 100 quality employment opportunities for members of target communities created through council contracts by 2022.
Local supply utilisation 100 contracts with local suppliers (local board area) by 2022.
Waste minimisation 100% of contracts incorporate waste considerations in all procurement processes.
Reduce carbon emissions 100% of strategic suppliers identify and implement carbon emission strategies.

Source: Auckland Council

The targets generate regular ‘business as usual’ considerations of how the broader outcomes objectives can be achieved through procurement activity, particularly:

  • increasing access for New Zealand business, including Māori, Pasifika and regional businesses, as well as social enterprises, and
  • transitioning to a net-zero emissions economy and designing waste out of the system.

The Southern Initiative – Tāmaki Herehere ki te Tonga

South Auckland is a priority area for the council, and The Southern Initiative (TSI) is a special department focused on trying innovative ways to solve social and economic problems in the region. It is jointly funded by the Council, the Māori and Pasifika Trades Training Programme for South Auckland, and philanthropic donations and contributions. “We have a mandate to fail fast, try different ideas, and test what works and doesn’t work,” says Frae.

TSI supports the council to undertake social procurement and are involved at all stages of the procurement process. “We draw on international best practice and continually evolve and adapt the process – we’re learning by doing,” says Frae.

Increasing skills and employment opportunities for targeted groups

Recently TSI worked with Auckland Transport (which is part of the Auckland Council group) to procure construction of the eastern busway in Auckland. A set of socio-economic outcomes (broader outcomes) were incorporated into the requirements.

ObjectiveRequirement
Supplier diversity 5% of subcontracts are with Māori, Pasifika and/or socially innovative businesses.
Targeted employment One new entrant per $5 million of contract spend, targeted to Māori, Pasifika, women, and minority.
Skills and training fornew targeted entrants
  • Industry apprenticeships and new targeted entrants
  • Industry apprenticeships and qualifications
  • Green Star training and qualifications
  • Literacy and numeracy skills
  • Qualifying for a driver licence
Wage strategy for new targeted entrants

A starting rate of $20.50, increasing to $25.00 within the first year of employment, and then to $27.50 after the second year of employment. (The rates are connected to training completed by new entrants).

Source: Auckland Council

These socio-economic requirements provide a practical example of how broader outcomes can be incorporated into procurement activity.

Key factors for success

Key factors for successfully developing these types of requirements include:

  • Early involvement – Get involved early in the planning phase to understand the context, the overarching goals, and potential outcomes to be achieved.
  • Use data to set the requirements – Gather relevant regional (and other) data to understand the need for achieving specific broader outcomes in order to achieve meaningful impact.
  • Early engagement – with potential suppliers and end-users so their input can inform the development of the outcomes.
  • Tailored approach – there’s no ‘one-size fits all’ so adapt your approach to each procurement project.

Increasing access for Māori and Pasifika businesses

TSI has set up He Waka Eke Noa in collaboration with City Rail Link Limited, Te Puni Kōkiri, Ministry of Pacific Peoples, and the Pacific Business Trust. It is an intermediary that connects Māori and Pasifika-owned businesses with clients and buyers wanting to purchase goods, services and works. While currently focused in the Auckland region, the team are looking to extend the initiative nationally.

We believe Māori and Pasifika businesses are an untapped pathway for socio-economic transformation for our Māori and Pasifika peoples. We want to increase the number of Māori and Pasifika enterprises in our supply chains.

Frae Cairns  Strategic Social Procurement Specialist, The Southern Initiative
Two men from iTraffic civil team
Billy Edwards and Lawrence Campbell Senior, part of iTraffic’s civils team, take a break from redeveloping footpaths in Mount Wellington for a quick photo. Photo: He Waka Eke Noa (wen.org.nz)

This initiative will help achieve the contract requirements for the eastern busway project (and other contracts with similar requirements), particularly requirements regarding supplier diversity.

Learn more about the council’s work

For more information about Auckland Council’s broader outcomes work, email Aaron Donaldson.

What are broader outcomes?

Government procurement can be used to support wider cultural, social, economic and environmental outcomes that go beyond the immediate purchase of goods and services. Together these outcomes are called broader outcomes. The Government’s new policy on achieving them is set out in the recently revised Government Procurement Rules.

This case study has been published to encourage and inspire government agencies, as they begin to implement the new broader outcomes Rules, with a particular focus on the government’s priority outcomes.

The priority outcomes this case study focuses on include:

  • Increasing access for New Zealand businesses
  • Construction skills and training
  • Improving conditions for New Zealand workers
  • Transitioning to a net-zero emissions economy and designing waste out of the system
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