Hats off to staff at City of Hamilton who have, over the last year, been exploring ways to better leverage city contracts to improve the lives of people living in poverty. I believe this is important work that we, as citizens of this city, should all be supporting. Let me tell you why I’m excited about this and why I am strongly encouraging City Council to lead the way forward.
The thing I’m excited about is a concept called Social (or Strategic) Procurement which I was introduced to a couple of years ago. I’ve been focusing on things that address poverty related issues in an organic way and this concept is in line with that theme. Early on in my retirement I was involved with Indwell as a volunteer trying to contribute to improvement in the affordable housing space. I believe that secure housing should be a basic human right in a society that truly values every individual. But I have always struggled with the skewing effect that simple subsidization has on the economy and believe that success in any social enterprise requires engagement with the recipient of the aid (give a man a fish and all that….). So I am always looking for creative ways to meet housing objectives. I ran across a paper that was written by Sandra Hamilton (Canada’s first Social MBA) and reached out to discuss it with her. We had a long conversation about a number of things, eventually getting around to a concept she has been advancing called Social Procurement.
Here is why I like this concept and why I am going to advocate for inclusion of social value in procurement at all levels of government. Requiring taxpayer funded institutions to look for ways to generate incremental social value in contract evaluations is an effective way to mobilize and reward socially responsible business practices in the private sector.
Frustration with the soulless nature of corporations was one of the things that I heard often expressed over the years I was employed in the oil industry. The truth is that is exactly what they are. As a shareholder, I expect the corporation to do it’s best to maximize the return on my investment. As long as it’s legal, anything that will reduce costs and maximize profit is on the table in our competitive world. Until late 20th century, that included compromises on our environment. We eventually wised up to that, sustainable development became a thing, and now sustainable development is simply “the way we do things around here”. Having been part of that evolution in various roles in the oil industry, I was given a chance to see how the alignment of our business with governmental and societal objectives became essential to retaining our license to operate. We, in the industry, knew that if we did not respect the environment as a foundational pillar of every project, we would eventually run ourselves out of town. Social Procurement is the next big transformation.
For all kinds of reasons.
- We are being influenced by millennials who are not satisfied with the status quo and want to work for companies that demonstrate a strong social conscience
- We are moving into a period where the available workforce is diminishing and we need to get more creative about how we attract and retain the best talent
- Inequality (the growing gap between the haves and have-nots) in our world is one of the biggest issues facing governments today. Discontent at the way that wealth is distributed has contributed to the decline of empires many times in recorded history. I observed that gap in a more extreme form on a visit to Haiti in 2015. The poor live in a prison of abject poverty and the rich live in cages. Nobody wants that.
I have no illusions that this is simple. Initiatives of this nature have been tried before (i.e. affirmative action). But we generally (even the haves among us) acknowledge that we need to do better at addressing the growing divide between haves and have nots in North America. I’ve never believed that direct government intervention (tax and spend) was the most efficient way to do that because it is managed by a group of people who’s primary objective is to keep their jobs. Free enterprisers are motivated by profit and that usually means doing things as efficiently as possible. Applying that kind of drive to solving social problems is, in my opinion, the best way to get things done. The key is to figure out the best way to leverage that drive. I think Social Procurement, done well, could be that thing.
Leveraging public procurement to reward the demonstrated power, creativity, and ability of free enterprise to find efficient solutions to solving social challenges would require committed leadership and vision. The immediate response of some people that I’ve shared this concept with is “the unions are not going to like that” or “how will we get the work done if contractors just walk away?” No question, those are legitimate concerns and challenges that will need to be addressed. Addressed by leaders with the vision and courage to find a way forward. Social Procurement is already “the way we do things around here” in Europe, New Zealand, Australia, and is increasingly being adopted by municipalities in Canada, including the city of Toronto.
I commend the City of Hamilton for embracing this concept and encourage all of us as residents to support this city in transforming how value is defined in taxpayer funded contracts. The city’s procurement manager is expected to deliver a report on the pilot project to the Audit, Finance, and Administration Committee sometime in November and I intend to be there to encourage the kind of bold leadership that I know will be needed going forward.
Citation: The City of Hamilton’s Social Procurement Framework has been designed by Sandra Hamilton, who recently won an international PhD scholarship to advance her work at The Manchester Institute of Innovation Research in the UK.