Does Social Value Conflict with Value for Money?
Henry Swan – Head of Procurement Kent County Council
What we will Consider
• What is Social Value• What do the Procurement Rules say about Social
Value• Incorporating Social Value into tenders• Is Social Value, value for money
What is Social Value
‘a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits to society and the economy, whilst minimising damage to the environment’.
The Sustainable Procurement Task Force, and is widely used in Scotland, Wales and England.
Examples of Social Value
• creating skills and training opportunities (e.g. apprenticeships or on the job training);
• creating employment opportunities for the long-term unemployed or NEETs (those not in education, employment or training);
• offering work placements to school children and young adults; • providing career advice and information for young people on specific
careers, such as construction, architecture or engineering; • offering curriculum support to schools, with contractors sharing knowledge
and expertise about their discipline; • providing additional opportunities for individuals or groups facing greater
social or economic barriers. • creating supply chain opportunities for SMEs and social enterprises; • creating opportunities to develop third sector organisations. • improving market diversity; • encouraging community engagement
Real Life Examples
• Bank deliver training on financial management in schools as part of winning a council’s banking contract
• Construction framework guarantees apprenticeships
• YLF Young Lives Foundation (Rights & Advocacy)– employed 2 care leavers– Increasing volunteering – Local fundraising
Public Services (Social Value) Act 2012
(3)The authority must consider—
(a) how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area, and
(b) how, in conducting the process of procurement, it might act with a view to securing that improvement.
This applies above OJEU threshold £172,514
Public Contracts Regulations 2015
Contract award criteria67.(1) Contracting authorities shall base the award of public contracts on the most economically advantageous tender assessed from the point of view of the contracting authority.
(2) That tender shall be identified on the basis of the price or cost, using a cost-effectiveness approach, such as life-cycle costing in accordance with regulation 68, and may include the best price- quality ratio, which shall be assessed on the basis of criteria, such as qualitative, environmental and/or social aspects, linked to the subject- matter of the public contract in question.
(3) Such criteria may comprise, for example—
(a) quality, including technical merit, aesthetic and functional characteristics, accessibility, design for all users, social, environmental and innovative characteristics and trading and its conditions;
(6) Award criteria shall not have the effect of conferring an unrestricted freedom of choice on the contracting authority.
Advance disclosure: make the evaluation criteria known to bidders at the first opportunity, including sub-criteria and evaluation methodology
Incorporating Social Value into tenders
Consider Your OptionsHow can principles of social value be
incorporated into your procurement process? Do you know what social value outcome you
require?
Your RequirementConsider how your requirement could improve the economic, social and environmental well-
being of the relevant area?What additional benefit could you hope to
secure, beyond the core contract requirements?Definition and types of Social Value are included
in the Commissioning Framework
Define RequirementClearly define within your specification the aspects of social value that will need to be
delivered by the successful bidder – make it clear what social value you expect to be
delivered through the core contract, and what further social value you are looking for in
additionExamples
Contract ManagementThe contract must be managed properly to ensure the bidders’ commitments to social
value are delivered. KPIs must be in place for the criteria chosen to award the contract.
Route 1 – Evaluating Social ValueThis approach requires you to identify to
bidders up front what you intend to do and what additional benefit you hope to achieve
through social value
Contract NoticeReference social value within your OJEU or Kent Business Portal contract notice (depending on the contract value). Make your intentions clear
to bidders. This is required particularly if you will be evaluating social value that bidders
should provide in addition to the core contract
ITT and Award CriteriaClearly disclose the social award criteria
weightings and evaluation methodology within your ITT document. Include detail regarding how social value will be evaluated. Require
bidders to provide evidence of how they will enhance social value through their proposed
approach.
Route 2 – Invitation to Submit ProposalsRather than specify what social value you want,
this approach invites bidders to propose how they would deliver social value through the
delivery of the contract
Promoting Social ValueStress how important it is that KCC see a return
on social value within your tender documentation.
EvaluationThe social value proposals submitted by bidders cannot be taken into account in evaluating the
bids, however any social value obligations proposed by the successful bidder will form part
of the contract
Contract ManagementThe contract must be managed properly to ensure the bidders’ commitments to social
value are delivered. Even though there was no evaluation criteria for social value, because the supplier has made a proposal a KPI can be put
against these and monitored.
Yes No
Evaluation of Social Value
• Must be fair and transparent• If you intend to use Social Value in evaluation
criteria to avoid risk of challenge you must clearly set out what you are going to evaluate and how you are going to measure:
e.g. For each apprentice you employ you will be awarded a point in evaluation• If you are prepared to risk challenge (it will
probably be a small risk) you could be more general
Value for MoneySocial Value Portal Example
Value for Money What do you want?
• Aligned to your aims– Supporting Kent Business – Apprenticeships– Encouraging the third sector– Improving educational attainment
• Universities?