MVOI and Social Return
Amsterdam annually purchases goods and services worth over €2.8 billion. In every (major) tender, social impact is considered where it fits. The municipality can contribute to the city's development through the products and services it procures. The primary focus of the council is on six social procurement themes: sustainability, health, inclusion and diversity, innovation, regional and SME, and social. This is outlined in the vision on socially responsible procurement and contracting (MVOI), 'Purchasing and Contracting with Influence.'
Social Return is one of these social themes. In Amsterdam, Social Return is applied above the European threshold for services. The concrete implementation is detailed in the Social Contracting Guide. This guide serves as a tool for both contractors and clients of the Amsterdam municipality.
Legal Framework
When applying Social Return, we must comply with mandatory (European) regulations, including:
- Procurement Law
- European laws and regulations (including Procurement Directives)
- Civil Code
- Municipal Act
- Proportionality Guide
- Works Procurement Regulations (ARW 2016)
The municipality of Amsterdam also considers the general principles of procurement law in its purchases:
- Equal treatment
- Non-discrimination
- Transparency
- Proportionality
- Mutual recognition (allowing entrepreneurs from other EU member states)
Translation of Framework to Municipality of Amsterdam's Procurement (Technique)
Social Return involves applying social conditions to procurement. The three most common ways to implement Social Return are:
- Requesting a plan from the contractor on how Social Return will be fulfilled, and evaluating this plan before the award, also known as a tender criterion (wish).
- Setting a percentage of the contract value (special execution condition) that must be spent socially and making an agreement later, after the award.
- A combination of 1 and 2: a plan and a percentage.
However, sometimes other combinations or techniques for 'requests' are possible, as each tender is unique.
In the case of a tender criterion (1 and 3), the municipality is bound by the plan when making agreements after the award. In the case of option 2 (a separate execution condition), there is practical 'flexibility' to negotiate further or alternative arrangements.
Within the above-mentioned framework, the Bureau Social Return of the municipality of Amsterdam negotiates performance agreements with contractors who have been awarded contracts on behalf of municipal clients. These agreements are part of the signed contract.
After winning a tender, contractors have a contractual obligation to contact the Bureau Social Return within 7 days to make these agreements.
Target Audience and Social Return Declaration
Social Return primarily focuses on employment, education, and labor market access for target groups established in the municipality of Amsterdam's policy. An individual is considered part of the Social Return target group if they have been unemployed for at least 3 months and are registered with the UWV Werkbedrijf, the municipality, or a similar agency (Participation Act, Unemployment Benefits Act, Social Workshops Act, Work and Income according to Labor Capacity Act/Work and Income according to Labor Incapacity Act/General Old Age Pensions Act, Disability Insurance Act, Disability Insurance Law/Invalidity Insurance Act, Disability Insurance Act, or Non-Standard Employment Benefits Scheme). Depending on the current situation, new groups have been added in the past, such as asylum seekers, early school leavers, or vocational education students at level 1 and 2.
The possibilities for fulfilling Social Return for the target group are outlined in the elaboration of the policy framework 'Social Contracting Guide': the Social Return Factsheet and the municipality of Amsterdam's settlement framework.
The current settlement framework offers the following options for implementation:
- Regular placements of candidates belonging to the Social Return target group for work, labor market access, and related education and guidance in a broad sense.
- Social Procurement from recognized Amsterdam social firms (alternative implementation).
- Social Return projects (alternative implementation).
Social Return 2.0
The application of Social Return is an aspect of procurement. The (European) procurement rules require that Social Return be applied "during and throughout the execution of the contract." In practice, the Bureau Social Return extends the application if there is a special execution condition (!), allowing related implementation related to the contract and the Social Return target group. Of course, this must still involve the Social Return target group and an (alternative) implementation included in the municipality's settlement framework. The condition is mutual consent with the contracting authority that has the Social Return obligation.
The discussion about the space to achieve a realistic, proportional, and intrinsically motivated implementation of Social Return is what led to the coinage of Social Return 2.0 by the municipality of Amsterdam in 2012. Agreements regarding the implementation of Social Return with contractors are ultimately tailored to each specific situation. Each tender, contract, and contractor is unique.
Social Return Projects as an Alternative Implementation of Social Return
Contractors cannot be obligated to implement Social Return in Amsterdam under existing legislation. They can fulfill their obligation within the existing framework (target group, implementation options) throughout the European Union. From Amsterdam's perspective, they seek to 'entice' contractors to work in Amsterdam and make it attractive for them. For example, by organizing a pre-employment training program through WSP Groot Amsterdam, collaborating with Pantar Amsterdam, or offering other attractive arrangements in cooperation with the municipality and other partners in the public-private sector.
During the (initial) discussion with the Bureau Social Return Amsterdam about implementation, the focus is on creating jobs. In some cases, this may not be feasible, for example, because the labor component in the tender is low, or the work is highly specialized, or there are insufficient labor resources available at that time. Supporting a social project is then an (alternative) option. Often, contractors already have an affinity for a specific social issue or target group and see an opportunity to fulfill their own CSR ambitions.
In such cases, a project proposal can be submitted to the Bureau Social Return. The key criteria for evaluating the proposal include:
- Which social issues of the municipality of Amsterdam does the proposal aim to address?
- For whom – the Social Return target group or another vulnerable group?
- What investments in terms of time, expertise, or money are proposed as Social Return implementation in Amsterdam, and what are the project results?
- Financing should primarily focus on results for the target group, not on financing (overhead) for the nonprofit organization itself.
Amsterdam Social Firms Showcase and Everyday Heroes
In two cases, the municipality of Amsterdam has identified in advance the possible alternative implementations. These include social procurement from recognized Amsterdam social firms, where social work and day activities are created for vulnerable Amsterdam residents, and the purchase of an Amsterdam Power Certificate from Everyday Heroes, which is used to support Amsterdam residents from the Social Return target group in their final steps towards employment. For example, through the purchase of a laptop, a driver's license, specific training, or an electric bicycle. These two options are highlighted, including on the website www.socialezaken.info (under 'gemeente') in the case of social firms.
Amsterdam Master Plans and Social Return
Entrepreneurs and other stakeholders collaborate with the municipality on various (social) societal challenges as part of the Master Plans for the Zuidoost, Nieuw-West, and Aanpak Noord districts. Amsterdam's Social Return 2.0 approach allows for a broad and flexible implementation of Social Return, including the possibility to support social initiatives (see above). Contractors with a Social Return obligation (special execution condition) are actively encouraged to contribute to the Amsterdam Master Plans.
Conclusion: The Municipal Social Return Process and the Role of Bureau Social Return Amsterdam
Governments must operate within the bounds of the law and their own policies. Their approach must also be predictable and transparent. This is why Amsterdam has translated its Social Return policy into a municipal process called Social Return. This way, it becomes visible how Social Return policy is put into practice and who is involved. The municipal Social Return process is outlined in the Social Contracting Guide. Bureau Social Return Amsterdam has specific roles in this process (see process) and thus maintains the infrastructure needed to operationalize Social Return ambitions and implement Social Return.
In addition to the roles in the process, one of the most important functions of BSR is to advise and inform contractors and other stakeholders about the operation and implementation of Social Return. Do you have questions about (the possibilities of) Social Return? Feel free to contact us at social.return@amsterdam.nl.