Social Value and your tender

Executive Compass Branding

A proposed new Bill introduced by the Conservative MP for Warwick is set to place a heavy burden on public sector procurement policies if it becomes statutory law.

The Bill, currently before the committee stage in parliament, is likely to be passed in one form or another in order to realise some aspects of ‘The Big Society’. PQQ and tender writing will never be the same again!

Whilst the vast majority of the bill focuses on increasing the involvement of the social enterprise sector by publishing strategies and encouraging the engagement of communities and social enterprise in honing those strategies, one section of the bill, clause 3, does impact on the way contracting authorities currently tender for and procure goods and services.

Clause 3, one of the key areas of the bill requires contracting authorities, including councils, the NHS, housing associations and some other NFP organisations, when entering into public procurement contracts, to give greater consideration to economic, social or environmental well-being during the pre-procurement stage.

So whilst on the one hand, Councils are under considerable pressure to reduce costs and obtain greater value in the tenders they issue, on the other, they will be required to also consider wider, social factors which inevitably will not come cheap. Clause 4, Financial Provisions, states that it does not anticipate that the Bill will lead to an increase in procurement and contract costs because the overall requirements will lead more efficient contracts. How this is the case is not yet clear.

So how would this play out in practice?

The duties expected to be placed on buyers are:

  • to consider how such a contract might promote or improve the economic social or environmental well-being of its area
  • to consult the beneficiaries of such contracts
  • to consider how to take into account matters identified by it in its initial consideration of social value
  • to include provisions within the contract relating to such matters

If anything, this Bill is a timely reminder to contracting authorities that, despite pressures to cut costs and find or force efficiencies, when it comes to procurement, the lowest price tender is not necessarily the most attractive option. The Bill pushes buyers towards looking for long-term, sustainable solutions and value-added extras. ( when writing a PQQ or writing a tender you will now need to include these in your submission)

So whilst the Bill states that it is the contracting authority that must give serious and evidential consideration to these factors when preparing tenders and procuring goods, it is, inevitably, the companies tendering for the contracts that will have to show that they too have taken these aspects into serious consideration. Not only is it required of the contracting authority, it will be a persuasive element in tender submissions – not least because it will absolve some of the responsibility from the shoulders of the contracting authority.

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