Public sector bodies are tasked by central government with managing a wide range of public services effectively and efficiently. Whilst most people know that services such as waste collection and road maintenance are awarded via a tendering process, many are surprised at the scope and scale of the full range of services covered by public sector tendering.
To identify the suppliers to deliver the services, public sector bodies issue an invitation to tender to companies and third-party institutions to undertake these public works and services for them. This involves a competition between bidders, and a contract is awarded to the organisation based on the quality of their proposal, the price, and their track record.
Other aspects, however, are increasingly added to the award criteria and include aspects such as ethics and local economic social and environmental considerations more commonly termed ‘social value’.
The Social Value Act 2012
Since the enaction in 2013 of the Public Services (Social Value) Act (2012), social value has been added as an evaluation criteria into government contracts and the Act has mandated that when commissioning services, public authorities must consider:
- How what is proposed to be procured might improve the economic, social and environmental wellbeing of the relevant local area.
- How, in conducting the process of procurement, it might act with a view to securing that improvement.
The Act requires that all public bodies in England and Wales, including local authorities, government departments and NHS organisations, consider how the services they commission and procure which are expected to cost more than the thresholds provided for in the Public Contracts Regulations might improve the social, economic and environmental wellbeing of the area and local community.