Stephanie Rickard looks at recent government guidance on how social value should be taken into account in the award of contracts.
The concept of social value in public procurement is well known. However, despite its introduction in 2012, there is relatively little practical guidance on how to apply social value in procurement procedures.
To fill the gap the government launched a consultation on how central government should take account of social value in the award of central government contracts.
Although the consultation is aimed at central government, the consultation contains a useful framework for testing social value which could be adopted by any contracting authority, where proportionate and relevant to the contract.
The consultation ends on 10 June 2019 and responses are welcomed from public bodies and those involved in public procurement. The government indicates that a response to the consultation is due to be published by 2 September 2019.
What does the legislation require?
The Public Services (Social Value) Act 2012 requires contracting authorities to consider, when procuring services, how the economic, environmental and social well-being of the local area may be improved and how this can be delivered through the procurement. However the legislation does not comment or offer guidance on how such considerations should be tested through the procurement process.
The proposed assessment methodology
The government is proposing that, for services contracts, a minimum of 10% of the evaluation criteria test social value considerations in the following areas:
- supply chain diversity
- improved skills and employability
- inclusion, mental health and well-being
- environmental sustainability and
- safe supply chains
The proposed methodology provides example award criteria, questions for bidders and evaluation guidance, for each social value theme. It is proposed that only those themes relevant and proportionate to the contract should be included in the criteria. If none of the themes are suitable for a particular contract, there would be no requirement to use the suggested social value criteria.
One of the proposed social value criteria tests how bidders ensure businesses in the supply chain are working to improve the gender pay balance. The proposed evaluation guidance requires bidders to provide examples of the initiatives they have taken to encourage gender pay balance, for example by implementing transparent pay and reward processes. This would be evaluated with reference to the prime contractor's mean gender salary pay gap for staff delivering the contract and the number and type of initiatives that are/will be put in place to reduce the gender pay gap for staff delivering the contract.
The methodology seeks to provide a consistent approach to evaluating social value. Central Government authorities (and any other authority applying the methodology voluntarily) would be able to incorporate additional themes relevant to the procurement or to apply a more sophisticated approach to test social value.
It is important to note that the guidance and proposed assessment methodology could be subject to change pending the outcome of the consultation exercise. Once finalised, central government will be required to comply with the guidance. Other contracting authorities could voluntarily use or adapt the approach to testing social value where relevant and proportionate to the contract.