Tenders, Broader Outcomes and SMEs

Demonstrating how your business adds public value

If you have downloaded a request for tender (RFT) from a government body in the last few months from GETs, chances are you will have come across the term ‘Broader Outcomes’. The Government Procurement Rules (4th edition) were released back in October 2019 and have gradually been adopted by Government agencies and more recently by regional and local councils. Today if you are tendering for a national, regional or local government project you should expect to be evaluated on your environmental, social, economic and cultural contribution to society, either as a percentage or in some cases as a simple Pass/Fail.

It may have been on your to do list back when it was announced, or it may have slipped your notice what with it being a pretty hairy year for small to medium sized businesses. Now as some of us are again twiddling our thumbs in various levels of lockdown, it could be a good time to put a ‘Broader Outcomes’ plan in place.

What are the ‘Broader Outcomes’?

They might be extra work, but they are not bad for New Zealand business and may mark a step away from lowest conforming (cheapest wins). They stem from four priority outcomes for government procurement defined back in 2018: to increase New Zealand businesses’ access to Government procurement; to increase the size and skill of the domestic construction sector workforce and provide employment opportunities to targeted groups; to increase conditions for workers and future-proof the ability of New Zealand business to trade; to support the transition to a net zero emissions economy, and assist the Government to meet its goal of a significant reduction in waste by 2020.

Rather than solely looking at value for money as in previous editions of the Government Procurement Rules, the Government is factoring in public value. When you open an RFT this usually appears under headings such as ‘broader outcomes’ or ‘social procurement’ and is divided further into environmental, sustainable, economic, social and cultural, varying from one agency to another as to what exactly each means and encompasses.

Environmental/sustainable

Whatever the heading you can expect requests for environmental certificates such as ISO14001 or environmental policies, nothing new there. However increasingly you will also see requests for sustainability credentials not only for your business but for your products and services, even copies of product labels. Depending on the type of tender you can also see requests for initiatives around product composition or end of life disposal options. You will also be expected to provide information on any carbon reduction initiatives to reduce emissions or the carbon intensity of your products. For example, Auckland Council’s targets are halving emissions by 2030 and reaching net zero emissions by 2050 and zero waste by 2040, and in their RFTs they want to know how you will contribute to that. Now is the time to identify what you as a business are doing and importantly how you are measuring your progress. Being able to add in statistics such as numbers of vehicles converted to hybrid etc. provides hard evidence and will score you points over well intentioned waffle. Also contact your suppliers and collate their policies and targets for carbon reduction and waste minimization to demonstrate your commitment further down the supply chain.

Economic: employing targeted workers

There’s a couple of new information requests appearing under the heading ‘economic’. Firstly, they want to know what you are doing about employing targeted workers. Two new rules were added effective 1 October 2021, “When procuring goods, services or works, agencies must consider how they can create quality employment opportunities, particularly for displaced workers and groups with traditionally high rates of unemployment or low labour force participation (specifically women, Māori, Pacific peoples, disabled people and youth).” The other rule called for monitoring and reporting on the creation of these quality employment opportunities.

Possible responses could include details of any Equal Opportunities Policy you adhere to, if if you have won any awards for diversity, the breakdown of your staff by ethnicity and gender, and any targets you may have or initiatives you are implementing for improving diversity such as adapting recruitment procedures. Again statistics count. For smaller businesses, highlight a story. For example, talk about an apprentice from a targeted group who you have supported into permanent employment. Use names, photos and a quote and it will stand out amongst the generic blurb that your competitors are copy and pasting.

Economic: support for local business

The other new focus that appears under the heading ‘economic’ is support for local businesses. Different agencies want very different outcomes here. Some local councils or agencies may be tapping into the Provincial Growth Fund or similar, so are looking for any trickle down to local businesses. Include in your Response any spend on fuel, accommodation, hire equipment, or other local services that you may utilize in the course of delivering the project. Also list any local subcontractors you will use and any long-term benefits to that company, such as upskilling their staff in the course of the project delivery.

Other agencies may be specifically looking for Māori and Pasifika businesses, or businesses who work with Māori and Pasifika companies. Auckland Council, for example, has two targets to encourage diversity: 5% of the value of all direct contracts to be awarded to diverse suppliers and 15% of the total subcontract value to be awarded to Māori and/or Pasifika businesses or social enterprises. If your organisation is 50% Māori or Pasifika owned you should apply for certification through Amotai, an intermediary that links buyers with Māori and Pasifika suppliers. If your business wants to grow its diversity, again access Amotai to find appropriate suppliers and subcontractors that you could work with on the project. If you have done anything to support a Māori or Pasifika business such as upskilling a subcontractor, document it and evidence your commitment.

Social and Cultural

Here the tenderer is looking for evidence that the business / project demonstrates good social and cultural practices. There have been requests for evidence of how an organisation gives back to a community for the last few years, and companies have cited sponsorship and community service. Now the waters are a bit muddier with tenderers using these headings to ask for information on employee health and well-being programmes or the use of Te Reo or Tikanga on the proposed project. As always, hard evidence counts over unsubstantiated claims, so photos of social activities, step challenges, activities to promote mental health awareness week, Te Reo signage or Maori customs being observed should be collated.

Scoring highly on Broader Outcomes is no different to getting points for Relevant Experience, Track Record or Key Personnel. It is all about ongoing collation of information and not leaving it until the day after you see an opportunity with your name on it pop up on GETS. Start compiling today.