The introduction of the Social Value Model for central government procurement is now starting to filter through into tenders. Here we provide a recap of what the model means for suppliers.
From January this year, the UK government’s Social Value Model has been mandatory in all central government contracts. Its launch followed the publication of procurement policy note PPN 06/20 in September 2020, which sets out how social value should be taken into account for all major central government procurement, and which requires it to be explicitly evaluated. This is a major step change from when the Social Value Act came into force, which only required public sector commissioners to ‘consider’ how they could improve the economic, environmental, and social wellbeing through their procurement activities.
Along with the explicit need to evaluate social value, it also sets a mandatory minimum weighting of 10% for social value at the tender evaluation stage. For example, the contracting authority might split the score 30% on price, 60% on quality and 10% on social value. This is to ensure social value carries a heavy enough score to be a differentiating factor in the evaluation of bids: however, a higher weighting can be applied if it is justified, for example, if there is a high level of market maturity in delivering social value.
The only exception to this mandatory minimum 10% of the overall score rule is where pre-market engagement demonstrates that the approach would significantly reduce competition due to a lack of market maturity in delivering social value. In these exceptional cases, the contracting authority may specify the social value weighting to be 10% of the quality score. Either way, the model has implications for any organisation bidding for central government contracts, and will undoubtedly see social value move up the agenda for the bid team.
What is the Social Value Model?
The Social Value Model sets out the government’s social value priorities for procurement. It includes a menu of social value objectives for central government departments (and executive agencies and non-departmental public bodies) to select from and include in their procurement. These objectives centre around five themes:
- COVID-19 recovery
- Tackling economic inequality
- Fighting climate change
- Equal opportunity
The model aims to make is easier for central government departments to assess and evaluate the social value offered in tenders and manage the social value delivered in contracts. It does this by providing the following key elements, and for potential suppliers provides a useful heads up of what might appear in tender opportunities:
- Model evaluation questions – there is a recurring theme, with questions asking you to outline how you will achieve your commitment, a project plan for implementing the commitment with timescales, and your measures for influencing staff, suppliers, customers and communities.
- Model response guidance for tenderers
- Model award criteria and sub-criteria
- Reporting metrics – these focus very much on outputs, for example, number of hours of volunteering, rather than the actual achievement of outcomes.
When considering which objectives to include, procurement teams will need to ensure it is related to the subject of the contract, proportionate and complies with the principles of equal treatment and non-discrimination. As well as making it easier for procurement teams, the aim is also to provide consistency for suppliers.
How important is it?
The government is using its buying power to drive social value and with around £49 billion a year of public spending potentially influenced, it will impact every market government buys from. Four key takeaways from the introduction of the model which bidders should bear in mind are:
Quality not just quantity.
Procurement teams will be assessing social value based on the quality offered in the tender against the selected outcomes at evaluation stage, in the same way as they would do for any other evaluation criteria designed to assess quality. While including quantities will help provide a full and persuasive response, evaluators won’t be relying on these values to differentiate bids. So if a bidder’s commitments include the provision of training, it will be the quality of the training opportunities which is evaluated, not the quantity.
Additional benefits only.
Guidance to procurement teams clearly states that any benefits identified as social value in tenders or contracts must be over and above the core deliverables of the tender or the contract. The illustrated example provided in the guidance is for a contract to supply employment support for the public. The core service (i.e. employment support) could not be defined as social value delivered through the contract. However, in this case, the wellbeing benefit associated with how the tenderer plans to recruit, train and retain the contract workforce carrying out that service could represent social value.
As mentioned previously, the model mandates a minimum 10% overall weighting for social value. However, within the overall social value score the contracting authority will need to allocate appropriate weightings to each of the evaluation criteria it has Included. So, you might find health and wellbeing given a higher weighting than environment or supply chain resilience.
Contract management and reporting.
The Social Value Model includes model reporting metrics to determine how the tenderer will establish and deliver the social value aspects of the contract. These are largely outputs, for example, the number of full-time equivalent employment opportunities created in the contract supply chain, rather than the achievement of outcomes. At the contract award stage, the deliverables of the winning tender will be incorporated into the contract. By collecting, recording and monitoring these social value KPIs throughout the contract lifespan, the contracting authority and the contractor will determine whether the contract is achieving its social value objectives.
The introduction of the Social Value Model provides a clear process for defining social value and a systematic framework for evaluation. Its presence as a specific element within central government contracts sends a clear message to suppliers that they will need to develop a cohesive, compelling and convincing social value offer if they want to win contracts.
For more information on responding to social value tender questions, visit our dedicated division The Social Value Practice, contact us free on 0800 612 5563 or email firstname.lastname@example.org.