Alternatives to tender process due to pressure to appoint community based suppliers
Our company operates across a large landholding in the Forestry industry and therefore have a large impact on local communities. We have undergone a modernization process in operations which resulted in 60% reduction in labour infield. There is now pressure to forego the tender process in favour of SMME development. the challenge is whilst the community is operationally skilled they lack business acumen and a long term sustainable plan. How do we go about adapting policy to include the SMME (Small, Medium and Micro-sized Enterprises) component whilst not increasing risk in operations.
This is a challenging area, and you are certainly not alone. Over here in the UK we have goals of increasing the number of contracts that are awarded to small and medium enterprises. There is no quick fix, within Scotland we have a nationwide approach called the supplier Development Programme (www.sdpscotland.co.uk) which engages with suppliers to improve their awareness and approach to bidding for work from the Public Sector. Some good success stories.
You need a long term approach which does not remove the tender process, which provides you with the checks and balances you need to ensure you are achieving best value, but streamlines it so the process is not a barrier to participation.
www.buyregional.com.au was launched recently by VendorPanel in Australia and is used by local councils to engage local suppliers. We have also launched www.procureforgood.com.au to make it easy for organisations to engage with social enterprises.
Don't underestmate the capacity of small businesses to engage in a procurement process. The key will be to design something which complies with any rules you have to follow whilst enabling suppliers locally to participate. As Lee suggests some form of support would be a great help in this process. We used support from colleagues who provide this sort of thing to work one to one with our suppliers to ride shotgun with them when we wanted them to participate in a new type of contract we put in place. Supplier events to "warm up the market" are also a useful way to gauge what sort of support they need. This will enable you to quantify risk as part of your procurement strategy.
Other alternatives include using any procurement procedure that enables a pilot or direct award if your financial limits won't let you just award to someone local.
You can still use the tender process. All you have to do is seek the talent/services you want from a primary contractor; and *require* that they subcontract (a percentage) to a local SMME. That appears to be how US organizations handle this.
You'll satisfy SMME needs without increasing risk.
Hold a supplier/contractor day and invite them to your offices and talk them through the tendering process you follow. Allow them the opportunity to ask questions. - This will support your SMEs with your process and perhaps other similar companies. If you want to bias your decision to support local businesses, Consider also including a metric of measuring carbon impact of travel from their offices to yours as this will allow you to transparently prioritize local businesses, and if a larger firm is really keen on getting your work, they can setup a local office and employ locally.
This is a challenge for sustainable sourcing at The Body Shop, Rob. Feel free to reach out and I can try and put you in touch with a member of that team.
I agree with Sam, and ask the primary contractors what they can do to support the SMME's with work, but also educational support (Mentoring, education, secondments)