DELWP Aboriginal Procurement Strategy · Web view1.Governance 1. Governance 1. Governance 3. Enablers 3. Enablers 3. Enablers 1. Governance 1. Governance 1. Governance 1. Governance

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delwp.vic.gov.au

2018

DELWP Aboriginal Procurement Strategy

Munganin GadhabaDELWP’s Aboriginal Inclusion Plan, Munganin Gadhaba (meaning Achieve Together), builds on the national policy reform agenda of State and Federal initiatives focussed on Aboriginal Australians.

The department’s vision for Aboriginal inclusion is to work in partnership with Aboriginal Victorians across landscapes, communities and natural resources, growing liveable, sustainable and inclusive communities and sustainable natural environments.

In Supporting Munganin GadhabaMunganin Gadhaba Outcome 2: Opportunity and Prosperity – Improved access for Aboriginal people to employment and capability building opportunities and strengthened Aboriginal prosperity through improved economic participation. One of the key actions described under Outcome 2, is to:

‘Develop and implement a DELWP Aboriginal Procurement Strategy’

DELWP recognises the importance of increasing the economic growth of Aboriginal businesses and is committed to ensuring it is an integral part of our sourcing and procurement processes. The department will provide opportunities for Aboriginal businesses in participating in our procurement activities and to be suppliers of our goods and services.

Background to DELWP’s Aboriginal Procurement Strategy

© The State of Victoria Department of Environment, Land, Water and Planning 2018This work is licensed under a Creative Commons Attribution 4.0 International licence.To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.

Background to DELWP’s Aboriginal Procurement Strategy.........................................1

DELWP’s Procurement Target of 1% from Victorian Aboriginal businesses...............2

DELWP’s Aboriginal Procurement Strategy...................................................................3

Aboriginal Procurement Strategy Objectives.................................................................5

Overview of DELWP’s Aboriginal Procurement Strategy..............................................6

Key elements of DELWP’s Aboriginal Procurement Strategy.......................................7

DELWP Aboriginal Procurement Governance Structure...............................................8

Governance and Reporting Framework..........................................................................9

Governance and Procurement Approval Framework...................................................11

Procurement Systems / Tools........................................................................................12

The DELWP Aboriginal Procurement approach...........................................................16

Appendix 1.......................................................................................................................17

Appendix 2.......................................................................................................................18

Contents

DELWP Aboriginal Procurement Strategy 1

DRAFT

The Victorian Government Context

Victorian Government Ministers announced a suite of major economic initiatives in March 2017 as part of the Victorian Aboriginal Economic Strategy (VAES) 2013-2020 and the Victorian Aboriginal Business Strategy (VABS) 2017-2021. As part of the VABS a government procurement target of 1% from Victorian Aboriginal businesses is to be applied from 2019-20. The target applies on a whole-of-government basis, as well as for each department.

The objective of the target is to use government procurement to increase opportunities for Victorian-based Aboriginal businesses to participate in our economy. The Aboriginal business sector is dominated by small to medium sized enterprises (SMEs) and the target is based on engagements with these enterprises. Providing opportunities to Aboriginal businesses include:

• Increasing the number of Aboriginal businesses participating in government procurement processes; and

• Supporting the growth and development of the Aboriginal business sector in Victoria.

The purpose of this strategy is to provide the department with the framework, governance and processes required to meet our 1% procurement target from 2019 – 2020 to Victorian Aboriginal businesses. By identifying and providing opportunities to Aboriginal businesses, the department can achieve its procurement target of 1% through:

• Building relationships with Aboriginal businesses;

• Streamlining procurement processes for the engagement of Victorian Aboriginal businesses;

• Developing economic and commercial capacity of Aboriginal businesses; and

• Promoting goods and services and all construction-related procurement provided by Aboriginal businesses to our diverse department.

What is the calculation method to be used for reporting?The 1% procurement target will be calculated as the number of Victorian Aboriginal businesses the department enters into purchase agreements (Contracts and Purchase Orders) with, divided by the number of small to medium enterprises (SMEs) that the department enters into Contracts and Purchase Orders with.

What is a Victorian Aboriginal Business?The Victorian Government’s definition of a Victorian Aboriginal business to be used for the target is:

• At least 50% Aboriginal and/or Torres Strait Islander owned;

• Undertake commercial activity; and

• Must have a presence/office in Victoria.

What is a small to medium enterprise (SMEs)?The Victorian Government Purchasing Board (VGPB) defines small to medium enterprises (SMEs) as:

• An actively trading business with less than 200 employees.


DELWP’s Aboriginal Procurement Strategy

VisionImproved access for enterprising Aboriginal businesses through improved participation in DELWP procurement activity.

Our GoalsIncreased opportunities for Aboriginal businesses to provide their goods and services and all construction-related procurement, and to grow self-sufficiency and commercial capabilities to allow Aboriginal businesses to expand and grow by:

• Introduce measurement and monitoring of Aboriginal business participation in DELWP procurement activity;

• Assist Aboriginal suppliers to develop a greater understanding of government procurement policies and practices, and identify where new opportunities may arise;

• Allow a greater consideration of Aboriginal businesses in any competitive market approach by providing quoting and tendering opportunities wherever possible; and

• Communicate the diversity of Victorian Aboriginal businesses to DELWP staff and promote the opportunities they present in assisting in the delivery of department procurement requirements.

Our OutcomesOutcome 1: DELWP staff have an increased awareness of Victorian Aboriginal businesses and the goods and services, including all construction-related procurement.

Outcome 2: Build Victorian Aboriginal businesses’ knowledge and capability about how the department procures their goods and services including all construction-related procurement.

Outcome 3: Encourage sustainable Aboriginal businesses.

Outcome 4: Meet our 1% procurement target to Aboriginal businesses.

4 DELWP Aboriginal Procurement Strategy

The Victorian Government Social Procurement key objective to “provide opportunities for Victorian Aboriginal people”

‘‘As part of the government’s commitment to increase Aboriginal economic participation,the department is committed to increase its procurement with Aboriginal businesses’’

Four key outcomes of DELWP’s Aboriginal Procurement Strategy

DELWP staff have an increased awareness of Victorian Aboriginal businesses and the goods and services, including all construction-related procurement.

1

Build Victorian Aboriginal businesses’ knowledge and capability on how the department procures their goods and services, including all construction-related procurement.

2

Encourage sustainable Aboriginal businesses

Meet our 1% procurement target to Aboriginal businesses

4

3


Aboriginal Procurement Strategy Objectives

What does this mean……

• A governance approval framework with clear roles and responsibilities

• A reporting structure and approval process with clear roles and accountabilities

• DELWP’s financial systems to be modified to support the reporting requirements

• Procurement Policy for the engagement of Aboriginal suppliers with DELWP amended to enable direct selection from Aboriginal suppliers to support the Aboriginal Procurement Strategy

• DELWP’s Victorian Aboriginal Supplier List will be updated and refreshed annually

• Analysis of spend with Victorian Aboriginal businesses measured and reported on an annual basis. Geographic and spend identified to enable increased engagement with Aboriginal businesses

• Engagement with Aboriginal businesses to increase their knowledge and capability of the department’s procurement processes

The DELWP Aboriginal Procurement Strategy is structured around a framework of governance, processes and enabler requirements, supported by an implementation plan

• Contract Management

• Supplier Engagement

• Issues Management

• Governance Structure

• Governance and Reporting Framework

• Spend & Complexity Analysis 2. Processes1. Governance

DELWPAboriginal

ProcurementStrategy


Overview of DELWP’s Aboriginal Procurement Strategy

1. Governance

Procurement Strategy is structured around a framework of governance, processes and enabler requirements, supported by an implementation plan

• Vendor management process supported by policy and implementation guidelines.

• The Issues Management Process will be managed by the CPO’s Procurement Team, who will maintain a register to record, investigate and resolve issues from Victorian Aboriginal businesses.

• A Supplier Engagement and Relationship Management Framework will underpin the Department's approach to Victorian Aboriginal businesses.

• Led by the Senior Executive Team (SET)and Procurement Committee (PC), reporting to the Secretary who is accountable for the department’s procurement target of 1% to Victorian Aboriginal Businesses.

• Governance applied prior to approaching the market, where appropriate.

• Spend analysis will be conducted annually to monitor and measure where spend is occurring.

• A Source to Contract tool developed and integrated to the Department Financial Management System

• Oracle’s Financial Management System (ERP) enabling user friendly reporting on spend to Victorian Aboriginal Businesses

• A Reporting framework developed and implemented by the Procurement Team

• Membership to DTF’s Vendor Panel system for Social Procurement.

• An established process to identify Victorian Aboriginal Businesses not listed on Supply Nation or Kinaway’s Aboriginal Supplier Lists.

• A communication plan with clear messages to key internal stakeholders. Communication will be driven by the Procurement Team via Procurement Forums, Business Managers’ meetings, departmental Groups key procurement contacts, newsroom articles.

• A key external stakeholders plan with key messages to assist with developing Victorian Aboriginal businesses capability.

4. Implementation 3. Enablers

2. Processes1. Governance

DELWPAboriginal

ProcurementStrategy

DELWPAboriginal

ProcurementStrategy

Key elements of DELWP’s Aboriginal Procurement Strategy


1. Governance

Governance will be led by the Senior Executive Team (SET) and the Procurement Committee (PC), reporting to the Secretary who is accountable for the Department’s 1% procurement target on Victorian Aboriginal businesses

Victorian Aboriginal Business Procurement Governance Structure

Secretary’s Leadership Group on

Aboriginal Affairs (SLGAA)Senior Executive Team

(SET)

Secretary

Departmental buyersDivisional and

Regional Business Managers

Procurement Committee (PC)

Munganin Gadhaba Steering Committee

(MGSC)

• The Secretary is accountable for reporting the department’s 1% procurement target for Victorian Aboriginal businesses to the Secretary’s Leadership Group on Aboriginal Affairs (SLGAA).

• Senior Executive Team (SET) notes the department’s Aboriginal procurement target through the department’s quarterly report.

• The Munganin Gadhaba Steering Committee (MGSC) note the consolidated report on the department’s 1% procurement target for Victorian Aboriginal businesses.

• The Procurement Committee (PC) will approve the department’s consolidated report on our 1% procurement target for Victorian Aboriginal businesses.

• Many departmental buyers will be part of division’s/region’s reporting on our 1% procurement target to Victorian Aboriginal businesses.

DELWP Aboriginal Procurement Governance Structure


1. Governance

The approval framework for the department’s reporting on our 1% procurement target to Victorian Aboriginal businessesReporting templates will be developed to assist the department’s businesses capture our procurement target to Victorian Aboriginal businesses, and to identify where spend mostly occurs. The reports are also expected to assist the department in identifying where possible future opportunities for Aboriginal business participation can occur.

Reporting and approval process:

Responsibility Action Required

Victorian Government via the Secretary’s Leadership Group on Aboriginal Affairs (SLGAA)

Approve and publish the whole of Victorian Government results.

Secretary Approve the department’s report and forward to the SLGAA.

Senior Executive Team (SET) The Procurement Committee will report quarterly to SET.SET notes the department’s target on procurement through the department’s quarterly report.

Procurement Committee The Procurement Committee will be responsible to approve the department-wide consolidated report.

Central Reporting Group (Procurement Team - Finance Division)

Consolidation of quarterly regional reports.Report and present to the Procurement Committee quarterly.

Group Deputy Secretaries To approve their Group’s quarterly report.

Group Business Managers To certify their Group’s quarterly reports.

Regional Directors To certify their regions reports quarterly reports.

Regional and Group Divisional Business Managers To collect case studies/highlights on Aboriginal procurement for inclusion in quarterly reports.

Governance and Reporting Framework


Governance and Procurement Approval Framework

DELWP’s approach for the approval and governance of procurement spend to Victorian Aboriginal businesses

1 Procurement activity less than $150k where there is no established Government contract or panel arrangement

Below $50,000(incl. GST)

Obtain a minimum of 1 quote, (seek opportunities to directly procure from Victorian Aboriginal business).

$50,000 - $150,000(incl. GST)

Where appropriate, obtain 1 quote to directly procure from a Victorian Aboriginal business (approved by Financial Delegate).

2 Procurement activity greater than or equal to $150K where there is no established government contract or panel arrangement.

Above $150,000(incl. GST)

Public Tender Process.Obtain a minimum of 3 quotes.

• Alerting Aboriginal businesses of forthcoming tender opportunities through Central Procurement and Vendor Management Panel.

3 Procurement activity from established DELWP panel arrangement, irrespective of value

For the establishment of departmental Panel arrangements to seek opportunities to include Victorian Aboriginal businesses.

4 Exemptions from obtaining three quotes or Public Tender process

Greater than $150k(incl. GST)

Approval by CPO or Secretary via the Procurement Team to directly engage a Victorian Aboriginal business.


3. Enablers

Departmental Financial Systems, DTF Vendor Panel arrangements and department reporting and approval framework to ensure we capture all procurement activity to Victorian Aboriginal businesses is vital for us to meet our procurement target

• DELWP’s selected Oracle Enterprise Resource Planning (ERP) system is expected to be launched in July 2019. Aboriginal Suppliers will be identified in the current ERP system and rolled into the new ERP system.

• A Source to Contract system for procurement is expected to be launched by the end of 2018.

• Procure to Pay system potentially can be a way to increase turnover with Victorian Aboriginal businesses though catalogue purchasing.

• The suite of procurement policies, templates and guidelines will be refreshed to include purchasing from Victorian Aboriginal businesses. This will be available to all staff on the Procurement ADA site.

• The Victorian Government’s Social Procurement Framework, tools and guidelines.

• The Department of Treasury and Finance (DTF) and the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) are in discussions with Kinaway to set up their directory of Victorian Aboriginal Businesses on Vendor Panel.

• The directory contained on Vendor Panel will list Aboriginal businesses verified by Supply Nation, Kinaway and a list of social enterprises verified by Social Traders. DELWP will have access to DTF Vendor Panel (Market Place).

Procurement Systems / Tools


3. Enablers

DELWP’s reporting will be the mechanism used by the Central Procurement Team to report on procurement to Victorian Aboriginal businesses

Reporting:• The Aboriginal businesses details ie name, address, ABN;

• Number of purchase agreements the department has entered in to;

• The total number of small to medium enterprises (SMEs) the business has Contracts and Purchase Orders with;

• Who in the department is purchasing from Aboriginal businesses and the categories of procurement ie. what they are purchasing;

• Who is buying from Aboriginal businesses;

• Capture the geographical spend (if possible);

• Timing of when we procure;

• The number of contracts with Aboriginal businesses that are registered on the BMS Contract Register; and

• Performance against contracts.

Expected Outcomes:• Provide assurance to the Secretary we are working

towards our agreed targets;

• Ongoing measurement, monitoring and reporting of engagement with Aboriginal businesses;

• Provide senior management with accurate reports on our procurement target with Aboriginal businesses and the knowledge of where the spend occurs;

• Identify new opportunities where Aboriginal businesses could potentially supply goods and services to the department; and

• Assist Aboriginal businesses to develop and grow.


The DELWP Aboriginal Procurement approach

What we’ve done so farActions include:

• The preparation of reports which identify whether the department has current or previous contracts with Aboriginal businesses.

• Membership and consultation with Supply Nation.

• Developed a DELWP Aboriginal Supplier listing from information from the DEDJTR’s list and a small list from DELWP contacts.

What we are working onActions include:

• Create one DELWP Aboriginal Suppliers Directory from the listings provided on the DEDJTR and the Supply Nation Aboriginal Suppliers Databases and publish on ADA procurement site.

• Change the BMS Contract Register to include a new field to identify whether the nature of expenditure for a contract is from an Aboriginal Business.

• Identify Aboriginal Suppliers who are currently on the department’s BMS vendor supply list.

• Consult with the BMS Systems Support Team to provide a solution to how Aboriginal Suppliers can be identified in the BMS System (including potential future systems).

• Engage an external provider to classify the department’s vendor database as to which companies are Small to Medium Enterprises (SMEs).

• Identify current spend against Aboriginal Suppliers for benchmarking.

• Identify categories of spend against Aboriginal Suppliers.

• Develop an Aboriginal Procurement Strategy.

• Develop an Aboriginal Procurement (Social Procurement) Policy.

Future work still to be undertakenActions include:

• Implement a process for Aboriginal Businesses to be classified within the Vendor Management component of the DELWP Procure to Pay tool.

• Establish a central point for all queries and reporting on Aboriginal Procurement.

• Collaborate and communicate with divisions on the 1% procurement target to Aboriginal Businesses.

• Promote/Communicate the Aboriginal Procurement Strategy.


3. Enablers

• Networking and engagement of internal and external key stakeholders.


Supply Nation – ‘The Sleeping Giant’ A Social Return on Investment Report on Supply Nation’s Certified SuppliersOn 18 September 2015, Supply Nation launched a Social Return on Investment (SROI) report that assesses the impact its Certified Suppliers have on their community, families, employees and owners.

Authors of the SROI, Robin Burton and Emma Tomkinson profiled five Certified Suppliers in the report. They include: BNYM Indigenous Designs, Cole Workwear, Pacific Services Group Holdings, Indigenous Success Australia and Global Professional Services International.

For owners of these businesses, social value is not just an added bonus of running a business, it is built into the fabric of the organisation. Each Certified Supplier owner profiled uses their business as a vehicle to drive change for their family and wider community.

Key findings of the report include:

• For every dollar of revenue, Certified Suppliers create $4.41 of economic and social value

• Smaller Indigenous businesses have higher SROI ratios than larger businesses

• Businesses working directly in Indigenous cultural industries have higher SROI ratios than businesses working in mainstream industries

• Indigenous businesses employ more than thirty times the proportion of Indigenous people than other businesses

• Indigenous owned business strengthens their Indigenous employees’ connection to culture

• Indigenous businesses provide training to staff

• Indigenous business owners that were part of the stolen generation use their businesses to create a place of belonging and healing

• Indigenous owners, employees and communities are proud of Indigenous businesses

• Owners of Indigenous businesses reinvest revenue in their communities

• Indigenous businesses are a ‘safe place’ for families

Appendix 1


3. Enablers

Social Traders definition of Social EnterprisesSocial enterprises are businesses that trade to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment.

Using the power of the marketplace to solve the most pressing societal problems, social enterprises are commercially viable businesses existing to benefit the public and the community, rather than shareholders and owners.

In the Australian context, there is no legal structure called social enterprise but we define social enterprise as organisations that:

Are driven by a public or community cause, be it social, environmental, cultural or economic; Derive most of their income from trade, not donations or grants; and Use the majority (at least 50%) of their profits to work towards their social mission.

The Victorian’s Context - What is Social Procurement and Social Value?Victoria’s Social Procurement Framework defines:

• Social procurement is when organisations use their buying power to generate positive social outcomes above and beyond the value of the goods, services or construction being procured.

• Social Value means the benefits that accrue to all Victorians when the social and sustainable outcomes in this Framework are achieved.

ISO 20400: Sustainable Procurement were released in April 2017.ISO20400 Provides guidelines for integrating sustainability into an organisation’s procurement processes. It covers the political and strategic aspects of the purchasing process, namely how to align procurement with an organisation’s goals and objectives and create a culture of sustainability. The standard defines the principles of sustainable procurement, including accountability, transparency, respect for human rights and ethical behaviour, and highlights key considerations such as risk management and priority setting. It also covers various stages of the procurement process, outlining the steps required to integrate social responsibility into the purchasing function.

What are the benefits of ISO20400?

• ISO20400 defines what ‘real’ sustainable procurement looks like. Organisations using ISO 20400 will:

• Contribute positively to society and the economy through making sustainable purchasing decisions and encouraging suppliers and other stakeholders to do the same.

• Reduce impacts on the environment, tackle human rights issues and manage supplier relations, while harmonising long-term global costs and improving your purchasing performance.

• Improve communication between contractors and all stakeholders and promote mutually beneficial relationships.

Appendix 2


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• Harmonise the purchasing function by improving relationships with suppliers and reducing risks in the supply change.


delwp.vic.gov.au

ContactsPauline Jubb (Subject Matter Expert)Team Leader Governance and AdvisoryProcurement Team, Finance & PlanningCorporate ServicesP: 03 5430 4480E: orEmail: P: 03 9194 1092

3. Enablers


Documents

DELWP Aboriginal Procurement Strategy · Web view1.Governance 1. Governance 1. Governance 3. Enablers 3. Enablers 3. Enablers 1. Governance 1. Governance 1. Governance 1. Governance