Impact Policy Tracker Policy

Victoria's Social Procurement Framework (SPF)



In 2018, the state of Victoria introduced the Social Procurement Framework (SPF), establishing Australia's first whole-of-government policy to embed social and environmental objectives into public procurement. The SPF mandates that all government departments and agencies integrate considerations such as inclusive employment, supplier diversity, and environmental sustainability into their procurement processes. This approach ensures that value-for-money considerations extend beyond price to include broader community outcomes.

The SPF outlines ten social and sustainable procurement objectives, including opportunities for Indigenous people, individuals with disabilities, and disadvantaged communities, as well as commitments to environmental sustainability and fair workplaces. It applies to all procurement activities, regardless of value, with specific planning requirements based on expenditure thresholds. 



Highlights

  • A State-driven approach leading the way: Victoria’s Social Procurement Framework illustrates how subnational governments can lead on social impact when decision-making is decentralised. Its success has inspired other states, including Western Australia, which in 2020 adopted its own Framework and Procurement Act to integrate social and environmental goals into procurement. More recently, New South Wales -the largest state-level spender- committed to all recommendations from a parliamentary inquiry aimed at strengthening social procurement, including clearer targets, expanded definitions of value for money, and better access for SMEs. These efforts reflect a ripple effect of subnational leadership, demonstrating how state-led initiatives can shape national progress on social procurement.

  • Intermediary organisations for implementation and scale: In Australia, social procurement frameworks -like Victoria’s SPF- have been accompanied by the rise of intermediary platforms that help translate policy frameworks into tangible outcomes. Social Traders, a leading organisation in social procurement, operates a dedicated marketplace connecting over 660 certified social enterprises with 150 business and government buyers. By supporting both buyers and suppliers, Social Traders has helped scale procurement for impact - facilitating over AUD 843 million in contracts between 2018 and 2023. While policies set the direction, intermediaries like Social Traders are essential to making social procurement more accessible, effective, and scalable.


  • Complemented by national frameworks addressing domestic priorities: While state-led initiatives like Victoria’s Social Procurement Framework have set the pace for embedding social value into procurement, they are complemented by national policies that address specific domestic priorities such as the Indigenous Procurement Policy (IPP). Introduced in 2015, the IPP sets annual targets for contracts awarded to Indigenous businesses, mandates set-asides for specific contract types, and applies minimum participation requirements to large contracts in key industries.

Government’s Role:
Market Participant


Country:
Australia

Policy Type:
Public Procurement for Impact

Year: 2018

Responsible Institution:
Department of Economic Development, Jobs, Transport, and Resources; Department of Treasury and Finance; Inter-departmental Social Procurement Steering Committee

Additional information:
Victoria’s Social Procurement Framework – Frequently Asked Questions

Public Procurement for Impact

What is Public Procurement for Impact?

Governments are among the major buyers of goods and services in most economies, with public procurement accounting for around 13% of GDP in OECD countries. This purchasing power gives them a unique opportunity to promote positive environmental and social outcomes. By moving beyond a traditional cost-focused approach to one centred on “value for money”, they can drive meaningful environmental and social change. This shift considers not only price but also the broader impacts of procurement decisions across the entire lifecycle of goods and services.

To institutionalise this approach, many jurisdictions have developed frameworks and strategies for Sustainable and Socially Responsible Public Procurement (SPP and SRPP), aligning public spending with the Sustainable Development Goals (SDGs). These efforts are often supported by capacity-building initiatives, training programmes, and practical guidance to help procurement officials and suppliers define and measure social and environmental value. Tools such as standardised cost units and certification labels for impact-driven businesses can further support the assessment and verification of social impact in procurement decisions.

For more information on public procurement with impact, visit Social procurement to promote social problem solving (2023) and How Public Procurement Can Spur the Social Economy (2021)