Buying Local: Tools for Forward-Thinking Institutions

There are many opportunities for organizations to benefit themselves, as well as the economies that sustain them, by making minor adjustments to the way that they purchase goods and services. This report outlines strategies and paths that policy-makers, sustainability managers, procurement professionals and others involved in institutional purchasing decisions can pursue to realize this potential.

Around the world, there is a growing movement to support local economies, and various approaches are being taken in different places. Great benefits come from strong, resilient local economies, and many opportunities exist to take small steps that can majorly benefit our public institutions, businesses and communities. If purchasers are ready to take on leadership roles, the tools and solutions detailed here are effective ways to expand local purchasing and strengthen our communities.

Part I outlines the argument for local procurement. It demonstrates the power that institutional procurement has over the economy and highlights opportunities for change by examining the current landscape in Canada, the United States, Australia and the United Kingdom. It details how local economic impacts fit within the definition of value when attempting to achieve best value inprocurement.

Part II and III identify tools that can be used by institutions and policy-makers to increase local procurement. They outline a number of challenges, and details solutions that are currently being used. Examples of the tools have been included along with references to material for further research.

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Content

PART I: THE STATE OF LOCAL PROCUREMENT

Introduction
     The Purpose of Procurement
     The Power of Procurement
     The Opportunity of Procurement
The Current Landscape
     United States
     United Kingdom
     Australia
     Canada
Summary

PART II: CHALLENGES

Overview
Challenges to Increasing Local Procurement
     Trade Agreements
     Internal (Interprovincial) Trade Agreements
     International Trade Agreements
     Challenges for Small and Medium-Sized Local Businesses
     Challenges Faced by Procurement Departments
     Challenges with Local Business Lack of Capacity
     Lack of Leadership and Collaboration

PART III: SOLUTIONS AND TOOLS

First Steps
     Policy Leadership and Management Commitment
     Define Local
     Leakage Calculators
     Targets
Greater Engagement
     Reverse Trade Shows
     Work with Large Suppliers
     Pre-procurement
     Broader Advertising
     Requiring Some Local Businesses in Bidding
     Tailoring RFPs to Local Businesses
Process Improvements
     Databases
     Procurement Cards – Speed of Payment
     Simplify Tender Documents
     Unbundling
Tie Locality to Other Value Based Goals
     Tie to Small Businesses
     Tie to Social Ventures
     Tie to Sustainability
     Tie to Minority and Female Owned Businesses
Move Towards “Total Cost”
     Inclusion of Values in Score Cards – Give Local a Weight
     Measuring Local Multipliers (LM3)
     Inclusion of Tax in Bidding
Notes for Policy-Makers
     Municipal
     Provincial
     Federal