DHS held a ceremony honouring Australia's National Reconciliation Week in Tuggeranong in May 2018 ©DHS/Australian government
DHS held a ceremony honouring Australia's National Reconciliation Week in Tuggeranong in May 2018 ©DHS/Australian government

Case study: DHS Australia normalising social gain

The South Australian government department for people focuses on sourcing of goods and services from disadvantaged and under-represented groups

It makes sense for a state department providing social support to ensure its procurement practices mirror that objective. In the past eight years, South Australia’s Department of Human Services (DHS) has actively encouraged staff to source goods and services from an Aboriginal Business Enterprise (ABE) or an Australian Disability Enterprise (ADE). 

“Our vision is to make social procurement our normal way of doing business,” says Caroline Lock, DHS acting director of procurement.

And momentum is growing. In the past two years, the policy has been adopted more widely across the South Australian Government, and included by the South Australian Office of the Industry Advocate – which supports small businesses in tendering for government deals.

While there are no specific national targets, local goals include a state government target of 0.5% of total spend with ABE, and a minimum requirement of 35% indigenous employment in contracts between the state government and suppliers in remote Aboriginal communities.

South Australian Government also has social procurement guidelines and an industry participation policy, which encourages procurement from Aboriginal Business Enterprises. The social procurement roundtable meets regularly in Adelaide to discuss opportunities for collaboration.

Nationally, the Australian government’s Indigenous Procurement Policy, launched in 2015, has resulted in 11,933 contracts being awarded to 1,473 indigenous-owned businesses with a total value of AU$1.832bn as of February 2019.

In the case of the DHS, tangible results include a maintenance contract in the remote north west of the state on indigenous lands, with a target of 35% local Aboriginal employment, which the contractor exceeded in the first 18 months. It has employed three local Aboriginal people as apprentices working towards a trade qualification.

A South Australian ADE linen contract has also added employment at the organisation through increased demand for services, and the business has moved from being a subcontractor to the sole provider. “It has been wonderful to witness this company’s evolution,” says Lock.

DHS procurement processes have been designed to effectively capture and encourage social outcomes by increasing the weighting for it in tenders, for example. The department has now identified security and cleaning services contracts as future areas for social procurement outcomes.

It has also negotiated a Social Responsibility Grant with another organisation as part of its stationery deal. That organisation allocates AU$30,000 a year toward products from its catalogue, and DHS nominates what it is spent on. “In the past, stationery and supplies have been given to homework clubs in low-income areas around South Australia, and we’ve filled backpacks with supplies for young people exiting the youth justice system,” says Lock.

Not only is this sourcing approach good for society, it has reflected well on the purchasing team. “As evidenced by the state government taking on our policy for social procurement, we have seen a positive impact on DHS’s procurement reputation,” says Lock. “Our procurement practice is driving achievement of DHS’s strategic objectives, increasing inclusion, participation and access across government, services and the community.”

For others looking to improve social outcomes, Lock’s advice is start small, talk to suppliers to discover if they’re undertaking initiatives you can collaborate on, and signal your intentions in advance so those tendering can gear up.

Social Value Action Plan
Social procurement is generally well-understood in Australia, where it is gaining momentum and becoming mainstream. 

DHS has implemented a Social Procurement Action Plan for 2018-19, designed to further DHS’s social procurement agenda. It is also involved in discussions with other SA government and non-government organisations on how to progress social procurement in South Australia.

And the DHS meets with like-minded businesses, such as local food manufacturer Obela, to exchange ideas on social improvement.

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