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?