Reaching new heights from a local level: Rethinking the RFP process to include small businesses.
It’s a commonly held belief that small businesses are the engine of the economy. Politicians refer to the importance of small businesses and will give “shoutouts” to local restaurants, retail stores and other businesses. They will use the #ShopLocal hashtag to promote a neighbourhood business and celebrate the achievements of a leader in the local business community. These efforts are part of an intention to boost the Environmental Social and Governance (ESG) messages of government.
Small businesses tend to be local. They might be a new business, or a generations-old business passed down to employees or family members. Small businesses can be everything from a coffee shop to a manufacturing, construction or consulting firm.
In Ontario, 75% of architecture practices employ one architect and five employees, while 96% employ fewer than five architects with staffing of fewer than fifty people. The OBJ book of lists tells this story. Every single one of these, by itself, meets the government definition of a small business, though a third of that list are local offices of large, in some cases, multi-national, corporations.
When we look beyond hashtag support, we see some of the challenges that undermine the intention of these ESG approaches. Challenges that can have far-reaching implications for sustainability in both climate action and the viability of small businesses to thrive.
A small business can have a bigger impact by directly investing in sustainable practices. Swifter decision-making means they are less burdened by a bureaucracy that can impede sustainability. And since smaller businesses tend not to be beholden to large boards of directors or shareholders, they can make decisions in the interests of their clients or the community.
There are real measures that a business can take to demonstrate how they commit to climate change. This can include everything from the use of transit and bike to get to meetings, to how the business supports charities, employment equity or fairness above and beyond employment standards. When clients consider sustainability at the hiring stage, businesses can also include how a business “walks the walk” in their approach. A recent study showed that large corporations tend to use sustainable initiatives as a means to a financial end, whereas small businesses are more serious about making an impact in their community.
These are real things that should be considered when choosing who to hire as consultants and contractors.
Consider how Requests for Proposal (RFP) are written.
Governments often design RFPs to demand unreasonably high thresholds for insurance coverage, years of experience or firm size that have little or no bearing on a firm’s ability to deliver the work. There is often no requirement for corporate sustainability, and no means to advocate for how or why a firm invests in its community.
RFPs are also designed without thinking through what governments can do to support their social goals. On the one hand, public sector hiring talks about promoting marginalized voices and supporting small to medium-sized enterprises, but then sets out criteria that all but ensure that none of them qualify.
A recent RFP eliminated 97% of architecture practices in Ontario by setting a minimum firm size without regard for the quality of work that a firm can do. Another RFP asked for scale and experience that all but eliminated every architecture practice in Canada. Thankfully, some of these requirements were withdrawn as a result of major industry pushback and advocacy.
These are signs that the people writing the RFPs are disconnected from the people responding. It also means people interested in the jobs have to invest countless hours of time pushing back to create a level playing field.
Eliminating local competition from design and construction firms means that the work is concentrated in a few large businesses; these might be only 2% of the businesses in Canada. That undermines political messaging that small businesses are important. It also undermines the idea that social procurement is important. It often means businesses owned by women, indigenous people, or ones committed to the social enterprise cannot compete, even though this is a stated government goal.
RFPs need to rethink the idea that bigger is better and start to think about how we can #ShopLocal in all things. Small businesses with local talent, skill, knowledge and experience can be part of a solution to the problem statement in an RFP. When we engage with local businesses, we hire people who are part of the community.
We have a quality and talent-based approach to where we shop or dine out. We patronize stores where the staff are friendly and we get good value. When we champion these businesses and celebrate their success, we show that they matter to our community.
We need to take the same approach when hiring consultants, contractors and other services through RFPs. We need to see the value in hiring based on quality, talent, skill and commitment to the community.
Toon Dreessen is president of Ottawa-based Architects DCA and past-president of the Ontario Association of Architects. For a sample of our projects, check out our portfolio here. Follow us @ArchitectsDCA on Twitter, Facebook, LinkedIn and Instagram.