The Cabinet Office has launched a consultation on requiring central government departments carrying out procurements to take account of social impact as part of the award criteria, “where the social impact is linked to the subject-matter of the contract and proportionate to what is being procured”.
The consultation, Social Value in Government Procurement, said that departments should not apply less than 10% weighting to social value but were free to go higher if they deemed it appropriate.
In the paper the Cabinet Office acknowledged that central commercial teams in major government departments were often far removed from local delivery, particularly for lower value contracts or common goods and services.
“The potential for evaluating social value in these contracts is not always obvious to those designing the procurement. They do not have a standard tool to ensure a robust approach to evaluation criteria and a consistent message to the market on what is important,” it said.
The consultation proposes a new evaluation model for central government buyers that has been drawn up by a joint team from the Cabinet Office and the Department for Digital, Culture, Media and Sport working with Claire Dove, the government’s Crown Representative for VCSEs.
The model, which draws on examples of best practice in local government and is contained in an annex to the consultation paper, defines the government’s commercial objectives for social value, articulating it in terms of strategic policy priorities.
“This provides a consistent approach for departments and suppliers alike. It will strengthen government’s overall commercial approach on key policies, such as levelling the playing field for SMEs and social enterprises to bid for public contracts, as it provides a clear and systematic way to evaluate these policies in the award of a contract,” the Cabinet Office said.
It added: “We have developed a light-touch approach, representing the minimum standard on social value that we expect departments to consider in their procurement activity. The model comprises a set of high-level themes, a set of priority policy outcomes grouped under each theme, standard award criteria and a menu of specific metrics for departments to use in contract management and reporting.”
From the menu of options, departments will be able to select those policy outcomes that are relevant and proportionate to the subject-matter of the contract if they choose. "They will not be required to (and should not) select any if none are relevant.”
The consultation paper added:
- Each policy outcome will have standard award criteria and a suggested set of evaluation questions for departments to consider. "Bidders’ responses will be scored against the qualitative aspects, using a standard scoring methodology, in the same way that other ‘quality’ questions are treated in a tender."
- Each policy outcome will have a corresponding set of proposed metrics that should be used by departments to performance manage the delivery of the contract. "Bidders will need to submit quantitative information based on these metrics where they have been selected."
This overall policy approach would be mandated for central government departments, their executive agencies and non-departmental public bodies for procurements subject to Part 2 of the Public Contracts Regulations 2015, except where they are already covered by the Balanced Scorecard for Growth (i.e. procurements for infrastructure, construction and capital investment contracts over £10m).
In relation to weighting, the Cabinet Office said: “In order for the social impact to be a differentiator between bids we are proposing that, where there is the potential for social value, departments must apply a minimum of a 10% weighting to social value in the evaluation.
“Departments would be free to apply a higher weighting if they deemed it appropriate but they should not apply less than 10%.”
The Cabinet Office said it recognised there was a risk that a formulaic approach to social value might disadvantage certain types of bidder, which could result in hindering those bidders participating in government procurement.
“Our view is that, by providing commercial teams with a structure for their evaluation criteria, and focusing on a qualitative assessment of the social impact, the approach should remove barriers rather than create them,” it argued.
To support this it will train all 4,000 commercial buyers in government in how to design procurement to deliver social value effectively and efficiently.
The four questions in the consultation are:
- Question 1: Do you agree with the proposed policy metrics in the model in the attached annex? Do you have examples of such metrics being successfully used in public procurement?
- Question 2: Do you agree that the proposed minimum 10% weighting for evaluating social value in the bid is appropriate?
- Question 3: Does the proposed approach risk creating any barriers to particular sizes or types of bidders, including SMEs or VCSEs? How might these risks be mitigated?
- Question 4: How can we ensure government’s existing procurement policy mandates (for example on levelling the playing field for SMEs) take precedence in designing the procurement?
The consultation runs until 10 June 2019.