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Posted: Jun 23, 2021

This article originally appeared in Breaking Ground, a publication of the Edmonton Construction Association. View the original here.

By Shayna Wiwierski

How social procurement can create opportunity for both individuals and businesses

A major theme that was part of last year's SHIFT conference took centre stage during an ECA event on March 18, 2021.

Held over Zoom, the ECA, YP Merge, and YBG hosted the Social Procurement Opportunity earlier this year and was aimed at looking at how the concept of social procurement can support local communities through employment opportunities, local buying, training and apprenticeships, diversity in suppliers, and the social value outcomes. Municipalities across the country, including the City of Edmonton, are introducing this policy to leverage development benefits for residents, address local social issues, and support local businesses and social enterprises.

The panel featured local and national leaders, including Roger Lockwood, director of procurement in corporate & supply services at the City of Edmonton; Antonio Gomez-Palacio, partner at DIALOG; Tim Coldwell, president of Chandos Construction; and Brad Freeman, people development & engagement coordinator at A&H Steel. It was moderated by Brooks Hanewich, community economic development consultant at EndPovertyEdmonton.

The event started off with a look into what social procurement is and then a conversation about what it meant to each panelist. Gomez-Palacio at DIALOG said that at a basic level it is a little bit of the recognition of how we conduct business as a ripple effect in the community and how these things have a big impact. He says that social procurement should be intertwined in the health of business practices going forward.

“Twenty years ago, people had heard about it, but no one really incorporated it into their business. I'm confident that social procurement will be the DNA in your business in the future,” said Gomez-Palacio. “You are building not just the strength of the community, but the strength of your own people.”

He added that it's important to be able to be in a place where you can be perceived as authentically improving the people around you, as well as having an acknowledgment and awareness of how you conduct your business, goods, and services. Those all have a ripple effect in the community and companies should be intentional about that.

At Chandos, the company has a social procurement plan, where by 2025, at least five per cent of their purchasing will be spent with social impact organizations. Coldwell, who was joining the panel from Toronto, says that at Chandos, social procurement is an opportunity to authentically live out their purpose as an organization. He mentioned the “why” question and why it's important to embed this concept into the business model.

“The business case will be different for every business, but for us, we can employ anyone to be a laborer on our job sites. So, let's hire the kid, the at-risk youth that is riding the bus three hours a day back and forth to high school, working two minimum-wage jobs [to support his family],” said Coldwell. “When we hire that kid, that kid is very thankful for the opportunity they have been given. There is a level of thankfulness for the opportunity. When you give someone a chance, they come to work with a big smile on their face.”

Coldwell added that Chandos also pays people to go to post-secondary colleges like NAIT and SAIT and they give people the opportunity to go from crime or poverty to a high-paying job in the construction industry.

“It costs us nothing to do that, and over time, they can make over $100,000 a year,” said Coldwell. “They blow the door over everyone else in terms of productivity and there is a huge push of productivity and happiness when we do that.”

A&H Steel has a similar approach, but instead of sending people to post-secondary college, they try to make an impact to a younger generation. Freeman says that he has heard from instructors at NAIT on how to get more people into the trades and what he's heard is that sometimes the trades aren't even promoted. The company works with a local elementary school which is struggling financially and provides them with winter coats, boots, and shoes, and supports a breakfast program. He says that it's a cyclical thing where these kids will then grow up and hopefully remember that A&H Steel helped them out. From there, they may look into the trades, so the company is promoting the industry at an early level.

At DIALOG, since they are architects, planners, and engineers, Gomez-Palacio says that their sense of purpose as a company is to improve the wellbeing of communities. He says that when looking at procurement, there is a strong business case in adding this element into bids.

“There is a level playing field if everyone they are asking to submit bids are required to submit a social procurement aspect to their bid,” said Gomez-Palacio. “Now the public sector, without spending money, is improving the wellbeing of these marginalized communities within society. The public sector can use policy and procurement methodologies directly into the hands that need it.”

Lockwood with the City of Edmonton adds that it should be less about the procurement perspective and instead about companies helping individuals and giving them the opportunity to become a member who is living in the community, rather than drawing from it.

“Think of the impact it gives. You take the kid and they are leaving and getting a good impact and a place for themselves. It's the messaging they are putting out there,” said Lockwood. “The programs and opportunities are out there and opening doors. The impact is at the community level.”

Of course, with all the positive takeaways on social procurement, the panel also looked at some negative aspects, such as the widely held perception that it will cost taxpayers more. Coldwell said that there isn't any research on this theory and often this perspective gets tangled up with the facts. Lockwood from the City of Edmonton added that it's pretty simple to add social procurement to a request for proposal as it's not a huge piece of work.

“[There is] some effort on the business community and supplier community to develop relationships and connections to respond to procurement and put bids together,” said Lockwood.

Adding to this, Coldwell cited a guide which was released in early April 2021, which features a wide cross section of industry support. The guide, entitled A Guide to Social Procurement, is a guidebook to the why, what, and how of social procurement in Canada that was developed by Buy Social Canada for different audiences. Buy Social Canada has also a second guide, Guide to Social Procurement in Construction and Infrastructure Projects, which was released in March 2021 and is a tool for applying social procurement to various construction models.

Gomez-Palacio adds that another barrier is momentum. He said that the industry is currently in the awkward phase of not having momentum and that many businesses don't have the inertia to get there and implement this policy. He recommends adding it to RFPs and to get businesses to put it into the balance sheets.

Lockwood added that there are a number of things that businesses can do to start implementing social procurement into their business models, but like anything, you have to start somewhere.

“There are a few avenues to do it and the simplest is that we put it out there and let businesses figure it out to a degree. I'm going to ask for it and see what I get back. We are certainly putting things out there and we have to put it in context too as we aren't looking at 80 to 100 per cent social procurement, our range is five to 15 per cent in terms of scoring. It's a starting point,” says Lockwood. “I look at the whole path as a maturity model where let's start here and grow it and improve it as we mature and grow together. This is a whole business community initiative.”

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