The Differences Between Social Value and Added Value in Tendering

Simply put, social value refers to a positive change your organisation will bring to the local community as a result of contract award or a place on the framework agreement. The benefits of social value are typically outside the contractual scope of works and are organised into three main groups – social, environmental and economic benefits. The buyer may choose to employ a general rubric, such as the Social Value Portal’s National TOMs calculator or central government’s MAC table, to guide bidders towards their preferred outcomes.

In contrast, added value is defined as any efficiencies, cost savings or improvements to service delivery which can be provided within the contract scope. Quality questions around added value will generally be more ‘open-ended’ than social value questions, placing the burden on bidders to rely on their own ideas and innovation to score points with the evaluators.

Integrating added value into your service model

Added value within a tender can be a standalone quality question or just one element of a quality response, where the buyer expects you to outline what innovations you can bring to the contract. Examples include:

• Bettering a contract KPI outlined in the specification, such as responding to reactive or responsive call-outs under the minimum response time for a static and mobile security contract
• Utilising technology to reduce administrative burden for the buyer’s representatives – for instance, by creating a client portal on your job management system, allowing them to monitor progress in real time
• Reducing the number of staff hours to provide savings on the price of resourcing in the contract – for example, using telehealth services and remote health monitoring devices for a domiciliary care service
• Delivering direct cost savings to the buyer by securing a lower price for materials through service level agreements or performing small/minor repairs at no additional cost during scheduled servicing.

Both ‘soft’ and ‘hard’ cost savings can be ideas which bring added value into your service provision. However, it is crucial to emphasise to evaluators that soft offerings, such as the first two examples, also add value by improving the overall quality of the service. Clearly labelling soft added value offerings will ensure you receive the deserved marks from the evaluation committee.

Potential social value offerings and initiatives

Although preferred social value outcomes can occasionally be prescriptive, the contracting authority may also decide to give minimal guidance in the wording of a question. In these instances, it is advisable to organise your response around common themes, as below:

• Jobs and apprenticeships: If the tender opportunity is expected to generate a substantial amount of revenue, you may choose to commit to hiring additional resource or apprentices to serve on the contract. It is important to emphasise that this will be sourced from the local area, ensuring direct benefits within the community.
• Supporting local businesses: You may choose to allocate a percentage of contract spend – such as procurement of plant, materials and equipment – to locally based businesses, with preference given to SMEs. This ensures the contract award benefits other businesses within the community or the authority’s administrative boundaries.
• Engaging with local communities: Donations or in-kind contributions to local community projects – for example, a litter-picking day or volunteering at a food bank – will provided targeted support for projects who may not otherwise receive funding.
• Environmental proposals: Outlining your methodologies for reducing carbon emissions, such as transitioning to an electric vehicle fleet, will provide concrete and specific figures for emissions reductions.

Remember, all social value commitments must be tangible, relevant and proportionate to the overall value of the contract. Minimal, vague or irrelevant commitments will result in reduced marks from authorities. In many instances, such as tenders with local councils or housing associations, social value will comprise 20% of the evaluation criteria. Equally, buyers will not expect exorbitant commitments, such as hiring ten new members of staff, for a low-value contract.

Differences between social value and added value in practice

The inherent differences between social value and added value will extend not just to the tender process but into service delivery. The examples below demonstrate how you will need to be mindful of these differences when delivering works or services over the contract term.

• Monitoring, measuring and reporting: In addition to details on commitments, authorities will expect bidders to monitor, measure and report on the impact of social value initiatives over the contract term. In contrast, any added value offerings are unlikely to be scrutinised in the same manner.
• Flexibility of offerings: While you may be able to negotiate different social value commitments once the contract begins, this is uncommon, as your commitments will form a KPI over the contract term. By comparison, added value offerings can be enhanced, adjusted and altered ad hoc depending on the changing requirements and demands of the buyer.
• Stakeholder engagement: For social value commitments, suppliers will typically engage with a wide range of stakeholders, including community groups and non-profit organisations, to maximise the overall impact of their offerings. For added value, the range of stakeholders is typically restricted to the buyer’s representatives and resident groups.

Our team of bid and tender writers are highly experienced in responding to both added value and social value questions in tendering. Furthermore, all tenders including a social value element benefit from our in-house, dedicated Social Value Practice division, where your assigned writer can liaise and access appropriate expertise.

If you would like to find out more about the bid and tender services we can provide to your organisation or have a free, no-obligation discussion around a live project, our sales and marketing team are contactable at 0800 612 5563 or via email info@executivecompass.co.uk.