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Social procurement in UK construction projects

Article highlight

Changing societal expectations about the role of projects in building community resilience in industries such as construction is increasing the importance of social procurement as a project management tool. The challenge is how to integrate new types of business underpinned by what is perceived to be an inherently uncompetitive business model into a highly competitive industry underpinned by strong path dependencies and established relationships with hard-nosed industry incumbents.

Keywords

  • Procurement
  • Social procurement
  • Social enterprise
  • Social value
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What does the paper cover?

The aim of this paper is to address the paucity of research into social procurement in construction by exploring the current barriers to procuring services and products from a social enterprise perspective. Through case studies of social enterprises operating in the UK construction industry, this research explores the drivers of social enterprise in this sector and the external and internal challenges which social enterprises experience in operating in the construction industry.

Methodology

Interviews were undertaken with the leaders of 12 social enterprises operating in the construction industry. The social enterprises were all based in the UK and were chosen from a number of well-known social enterprise directories, including the Social Enterprise UK Buy Social Directory and the Social Enterprise Mark Directory.

The interviews were guided by four questions:

  1. Brief background of the business?
  2. Drivers of social enterprise in the construction sector?
  3. External risks associated with the construction sector?
  4. Internal risks in running a social enterprise in the construction sector?

Research findings

The results indicate that numerous changes to existing procurement practices are needed to encourage the engagement of more social enterprises in construction projects. Clients have a critical leadership role in bringing about these changes. Beyond the relatively few larger firms that are starting to become engaged with the social enterprise sector, there’s a very long tail of smaller firms which will resist change unless they are encouraged to do so.

This research shows that in meeting new social procurement requirements, social enterprises represent an innovative and as yet untapped opportunity for clients and firms in the construction sector to engage more closely with their communities and help the environment and the most disadvantaged in society.

Conclusions

Through interviews with leaders of successful social enterprises operating in the construction industry, it is concluded that many changes are needed to traditional procurement practices to grasp the opportunity of social procurement. These include unbundling work packages, reducing tender compliance burdens, changing traditional perceptions of ‘value’ which revolve around lowest price, incorporating social value requirements into existing subcontracts and challenging the dominant role of supply chain incumbents and ingrained negative stereotypes of the disadvantaged groups which social enterprises employ.

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