Does procurement law allow for female workforce quotas?

Rebecca Rees asks whether more could be done at procurement level to encourage a gender-balanced supply chain.
Women in construction
Image: Dreamstime

As we celebrate International Women’s Day, it is interesting to consider whether our public procurement regime addresses the issues currently facing women entrepreneurs and women-owned businesses in the UK.

One of the primary objectives of the UK’s Sustainable Development Goals is to achieve gender equality and empower women and girls. The link between gender equality in the marketplace (characterised by active and significant participation by women in a diverse supply chain) and a country’s global competitiveness is well recorded.

For example, the World Bank in its annual report (2012) observed, “when women’s labour is underused or misallocated – economic losses are the result”, and yet in the UK there is no direct link between the political and economic imperatives of promoting and empowering women and women-led businesses and our public procurement rules.

That is not to say that our public procurement rules prevent participation by women and women-owned businesses in the public sector supply chain, it is just that the solutions proposed to encourage their involvement are not sensitised sufficiently to address gender-specific barriers.

Supporting marginalised suppliers

The assistance offered to women and women-owned businesses to access the public sector purse is the same given to all other marginalised suppliers – loosely grouped together and assumed to be SMEs. Gender-blind solutions and processes include:

  • increasing information about tender opportunities and clients;
  • streamlining tender processes: including standardising and simplifying them;
  • avoiding pre-qualification procedures wherever possible;
  • using value-led award criteria rather than lowest cost to avoid a “race to the bottom”;
  • providing feedback to increase bidder capacity and capability;
  • ensuring that contract terms are proportionate and that they encourage prompt payment.

It could be argued that gender-responsive solutions may not be required (or have not been created) in the UK because the problems faced by UK women-owned businesses are the same as ethnic minority-owned businesses, SMEs and other marginalised suppliers.

But for those public sector clients in the UK, eager to take positive steps to redress gender inequality within their supply chains, what can they do within the framework of public procurement rules?

Unlike in a number of African countries, UK public sector clients are not able to allocate price preferences to women-led bidders, nor (as in the US) are they permitted to ‘set aside’ or reserve specific procurement opportunities only to women or women-led bidders.

Even post-Brexit, the UK is a signatory to the World Trade Organisation Agreement on Government Procurement (GPA) in its own right (it was previously a member via its membership of the European Union). The GPA prohibits preferences and reservations on the basis that they are more likely to favour national bidders, but in doing so, prevents GPA signatories (including the UK) from adopting affirmative action at the procurement stage for contracts covered by its terms.

Despite the limitation on procurement, clients have always been able to include contract terms that oblige the provider to execute and deliver processes and initiatives designed to promote gender equality in the supply chain: but that does not address the issue of initial access to the marketplace by women or women-led bidders.

“Despite the limitation on procurement, clients have always been able to include contract terms that oblige the provider to execute and deliver processes and initiatives designed to promote gender equality in the supply chain.”

Limited options

So what are we left with? Not a lot. The GPA does not cover lower value contracts (in the UK we refer to them as “below threshold” contracts), currently below £213,477 inc VAT for services and supplies contracts on a sub-central government basis and below £5,336,937 inc VAT for works contracts. The UK government set out its plan for below threshold contracts in its Procurement Policy Note 11/20. Contracts may only be reserved by type of bidder or location of bidder.

Whereas the type of bidder could have been defined by size, race, gender or other protected characteristic, the reservations are instead only defined by limited type (and can therefore be reserved for SMEs, VCSEs (Voluntary Community or Social Enterprises)) or location (with reservations pertaining to UK-wide or hyper-local (e.g. county-based) locations).

The National Procurement Policy Statement and its reference to the implementation of social value initiatives – the government’s Social Value Model (PPN 06/20) – does include some monitoring and measurement metrics dealing with gender equality in the workforce. Nevertheless, these initiatives are encouraged within the bidders’ supply chains and workplaces to address the inequality and barriers faced by women and women-led businesses.

Again, this does not provide a solution to the lack of access to the public-sector purse, but it does deal with gender equality elsewhere in the public sector supply chain.

Given the proven socio-economic benefits of a gender-balanced supply chain, it is surprising that more is not being done by the UK government to encourage women entrepreneurs and business owners to access the billions of pounds-worth of opportunities in the public sector.

Our post-Brexit world offers more flexibility to explore more gender-responsive initiatives and solutions to the procurement barriers facing women today and failure to anticipate more gender-sensitive solutions in the upcoming reforms would be a missed opportunity.

Rebecca Rees is a partner and head of public procurement at Trowers & Hamlins.

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