Making it work for major projects: social procurement in the real world

Claire ParryHiller Parry Consultants

Agenda

What is it? - Social Commissioning and Procurement

• Strategy and process

• Objectives and outputs

• Social and economic benefits

• Identifying relevant outcomes

Case Studies

• The London Story

• Legislation and Local

Government

• Sydney Metro Northwest

Lessons Learnt, Challenges and Successes

Social Commissioning and Procurement Strategy and Process

Social Commissioning – A strategic approach to the generation of socio-economic outcomes through the procurement of goods, works and services through:

• Legislation

• Policy

• whole of government

• departmental

• Major project approach

• Private sector - CSR

Social Procurement -The generation of social value through purchasing and procurement processes

Social Commissioning and Procurement Objectives and Outputs

Objectives

Maximising equitable employment and career development opportunities for our communities benefitting local people and valuing diversity in our workforce

Building skills today for the workforce of tomorrow inspiring and providing opportunities for young people ensuring a sustainable workforce for the future

Developing our skills base – growing our capability and industry competitiveness delivering an enduring skills legacy

Promoting Industry Participation– providing and supporting access to supply chain opportunities for our industries and businesses

Knowledge Economy – drive the generation and growth of new knowledge - based assets and values

Outputs

• Jobs for local people• Increased indigenous participation• Women in non-traditional roles

• Apprenticeships and Traineeships• Work experience – High School• Work placements – University• Graduate Programs

• Develop new qualifications and programs• Provide accredited training leading to

transferable skills and qualifications

• Industry engagement and B2B events

• Small business support program

• industry/ education partnerships

Socio- Economic Benefits

Government

• Boosting the economy • Growth and innovation• Reducing unemployment • Local investment and participation

Industry

• Skills legacy• Workplace health and safety• Building workforce capability • National and global competitiveness

Private sector

• Competitive advantage• Corporate social responsibility• Accessing local skills • SME opportunities

Socio-Economic Benefits

Major Projects – Delivery, Operations and Maintenance

• Setting new benchmarks• Demonstrating value for money• Productivity, quality and safety• Mitigating skills shortages and gaps• Equality and diversity• Ethical and social reputation• Developing a skills bank in the public and private

sector

Communities and Individuals

• Local employment• Career progression and skills development• Improving participation for under represented

groups • Increased social and economic capital• Inspiring future talent into industry• Transferable skills and qualifications• Local business and social enterprise opportunities

Identifying relevant outcomes

Project context

• Stand alone • Ongoing infrastructure program• Scope and scale• Delivery and operations opportunities• Contractual types – EPC/M, D &C, O& M• Market contenders – national and global

Industry

• Industry type • Sector outlook• Skills and labour profile• Local industry profile – supply chain• Skills shortages and gaps (regional,

national context)

Demographics

• Employment • Education • Indigenous• Income • Local business

Location

• Urban, regional• Travel to learn or work

State and federal priorities

• Economic• Social• Legislative drivers

– Australian Jobs Act 2013 ( industry participation, jobs)

– Procurement requirements (indigenous participation, apprenticeships)

Stakeholder engagement

• Industry• Government departments • Community groups and representatives• Training providers and schools• Local / SME business representatives

Case Study – The London Story

“Responsible Procurement means pioneering socially, environmentally and economically responsible procurement to deliver improved quality of life and

better value for taxpayers, our people, our businesses and our City”

Key themes • Strategic Labour Needs and Training (SLNT)• London Living Wage (LLW)• Freight and Cycle Safety• SMEs and Diverse Suppliers• Equality and Diversity• Environment• Ethical Sourcing

Delivery• London 2012 Olympics• Greater London Authority

Crossrail Transport for London Metropolitan Police London Fire Brigade

London Olympics 2012 – Procurement Policy

• EU procurement regulations

• Balanced Scorecard:

– Balancing cost, time and quality with Olympic Delivery Authority (ODA) corporate values and objectives:

• Safe and secure

• Equalities and inclusion

• Environment

• Quality and Functionality

• Legacy

• Supply Chain obligations

• Compete for – opening up private sector procurement opportunities to SME’s

Crossrail

Europe’s largest infrastructure project - £15bn value. Stretching across

London, the new railway will cover over 100km of track including 21km

new twin-bore rail tunnels and nine new stations

Crossrail Mayoral Priority

• Supporting Londoners to improve their skills, job and advancement prospects through integrated employment support and training opportunities

Crossrail Act: Undertakings and Commitments

• Use all reasonable endeavours to encourage recruitment of local people to jobs on the construction of Crossrail: To work with local partnership agencies/organisations, where appropriate, for local labour and skills training

Transport for London – Responsible Procurement Policy

Skills and Employment Strategy

• Maintaining Safety

• Inspiring Future Talent

• Local Labour

• Revitalising our Tunnelling Skills Base

Contractual Obligations

• £ value based outputs

• Job Brokerage

• CompeteFor procurement portal

• Flow down commitments

• Building SME and regional capacity to access supply chains

Government – pan project leadership and facilitation

Key Achievements - 2014

Equality, Opportunity and Social Inclusion

• 2800+ new local jobs via job brokerage service

• 86% jobs filled by Londoners

• 1000 + unemployed people into jobs

• 62% new entrant jobs filled by previously un-

employed people

• 450 + apprentices on formal apprenticeship

schemes

• 44% apprentices previously not in work or

education -double the UK wide average

• 33% of jobs filled by women –compared to 20%

across UK construction industry and 8% of

engineers

• 24% Black and Minority Ethnic (BAME) employment

– UKCG average 5%

Economic Progress

• Tier 1 contracts over £5.5bn

• UK companies hold 97% of Crossrail –

related contracts

• Supply chain:-

• 62% businesses winning bids are

outside London

• 3 out of 5 FTE jobs outside London

• 62% contracts held by SME’s

• Supply chain mapping – tier 1 to tier 6

Crossrail - Key Achievements 2014

Crossrail - Key Achievements 2014 Workforce up-skilling

7000+ individuals undertaken accredited training

500+ work experience and placements

250+ graduates on formal graduate schemes

5000+ completed Tunnel Safety Card training and testing

6700+ truck drivers trained

£20m funding to support skills and employment delivery

100 schools and 10,000 students engaged

Initiatives and Innovation

Tunnelling and Underground Construction Academy

– Specialist facility and plant

– Industry and government sponsorship

New industry qualifications, apprenticeships and licences

Skills and labour forecasting tool

Innovative multi-agency approach

Influencing government procurement policy and strategy

Legislation and Local Government

Public Services (Social Value) Act 2012

• UK legislation requiring public authorities to have regard to economic, social and environmental well-being in connection with public services contracts; and for connected purposes

London Borough of Croydon• Development of a Social Value Toolkit for Commissioners • Capacity building local suppliers and social enterprises• Skills centres located within communities• Council contracts - local business and social enterprises- social housing, street

cleaning and maintenance

$8.3 billion budget

Open by late 2019

First stage of rapid transit

Sydney Metro Northwest Workforce Development Strategy

Key objectives• support local labour force participation

• resolve skills shortages locally and nationally through targeted skills development

• maintain competitiveness of the construction sector by attracting skills locally and nationally

• ensure procurement decisions in the transaction management phase support state and federal efforts to increase workforce participation

• encourage the next generation to pursue careers in engineering and construction

Sydney Metro NW Workforce Targets

• % of total workforce that are apprentices / trainees from Greater Sydney area

• % of total workforce sourced from Greater Western Sydney area

• % of workforce participating in national recognised accredited training

• Workforce diversity and disadvantage groups

• Work experience, education placements and graduate opportunities

Mandated requirements are embedded in contracts to support the achievement of targets

Shared ownership of a workforce legacy

Key initiative: SM NW Skills and Employment Advisory Group

Skills and Employment Advisory Group

• Sydney Metro Northwest• Dept. of Employment • Dept. of Industry• Dept. Education & Training• NSW State Training Services• Civil Contractors Federation NSW• Skills DMC – ISC• Transport & Logistics ISC• TAFE NSW• SM NW Principal Contractors

Initiatives and Innovation• Tunnelling Operations Competency Program • Sydney Metro Pre- Employment Training Programs• Commonwealth Industry Skills Fund application• Multi –agency approach and funding• Leading the way

Sydney Light Rail WestConnex TfNSW Capital Metro Canberra

• Most workforce targets being met or exceeded

Sydney Metro NorthwestAchievements to date

Lessons Learnt, Challenges and Successes

• Contract requirements not enough

• Clear definitions, enforceable targets, and KPIs

• Understand costs and potential external funding

support

• Communicating intent to the market

• New concept for contractors and government

• Retro-fitting contractual obligations has poor

success

• Championing the approach - leadership and

ownership at government and project level

• Government ownership drives the most

successful outcomes e.g. TSC Tunnel Operative

Competency Program and Pre-Employment

Program

Lessons Learnt, Challenges and Successes

• Establishing the role of government

• Objectives – aligned to wider State and federal priorities and relevant to project, location and future industry requirements

• Translating objectives into contractual requirements and outputs

• Skills and labour forecasting – having clear sight of the supply chain and opportunities

• Different opportunities in delivery and operations/ maintenance contracts

• Utilising different procurement models- $ value/ workforce ratios/numbers/ bid back

Lessons Learnt, Challenges and Successes

• Socio-economic impact - individual,

communities and industry

• Skills legacy – transferable, qualified

and local workforce

• Diverse and inclusive workforce

• National and global competiveness

• Strategic stakeholder collaboration

• Multi agency approach – expertise,

commitment and wider ownership

• “One voice” (e.g. Industry Skills Fund

response) to achieve policy change

• Ability to set new benchmarks

across industry

• Culture change