31 Jan The Role of Social Value in Tenders
By Alan Johnson, Tuesday 31st January 2017
How serious do commissioners take social value when considering contracts. Research has shown in England it’s still sporadic. In Scotland the equivalent community benefits has a bit more teeth, particularly as public sector commissioners are expected to report to Scottish Govt on community benefit outcomes.
The Social Value Act (England and Wales) was passed into legislation in Jan 2013. In Scotland the Procurement Reform Act was passed in 2014, which included Community Benefit Clauses. Both Acts allow for the consideration of contractual clauses which can be used to build a range of economic, social or environmental conditions into the delivery of public contracts. Also viewed as contributing to the Best Value and sustainable procurement agendas, whilst allowing organisations to contribute to the achievement of outcomes, which benefit their communities.
Purchasing power ensures that all significant tenders can clearly set out what additional social value suppliers can offer the community. This often includes a significant weighting 5-10% on larger regeneration contracts. There is a huge opportunity for all businesses to work collaboratively, suppliers and buyers working together to innovate and delivering meaningful initiatives for our communities.
We are seeing larger suppliers and contractors becoming increasingly innovative during the procurement process to showcase how they can deliver social value and community benefits. However, commissioners also have a responsibility to ensure commitments are monitored and delivered where it’s needed most. It is vitally important that suppliers are made aware of areas where they can add most value. All too often community groups and the wider community don’t benefit from the supplier’s social value commitments.
Delivering real value can be achieved by taking time to understand where suppliers and contractors can add value; this knowledge can then be used during the tendering process. Many bidders use their CSR function in response to social value questions. This can be lazy and lacks imagination. Bidders need to demonstrate how their CSR can benefit society and how it links with need.
From experience of evaluating and scoring tenders, it is apparent that generally very little research and time is dedicated to social value responses. Surprisingly this is also the case even when a significant weighting is being used as part of the award process. In my view bidders should take more time and be more diligent in researching their clients’ social objectives and local needs. That said, some organisation have committed time and resources developing Community Investment Plans and Impact measurement tools.
I envisage during 2017 that commissioners will be expected to take social value more seriously, as such I would urge bidders to up their game and put more emphasis on social and economic responses in tenders. You don’t need to be a large Plc to achieve this, some simple and creative thinking can make a huge difference. Many SME’s already have the solutions, but perhaps they just need a helping hand to develop and articulate them.
Author – Alan Johnston, Social Value Consultant, Embarq Ltd.
