Here's our first of many short articles focussed on infrastructure and construction procurements in the public sector. The aim of these is to share our understanding and encourage debate. Please have a read and pop your thoughts below.
Social Value Model: Evaluating Social Value in Tenders
The law has required public sector organisations to consider social value as part of tenders since The Public Services (Social Value) Act came into play on 8 March 2021.
For the infrastructure and construction sector, this means public procuring authority must consider the evaluation of wider social, economic and environmental benefits. In doing so, this may result in the incorporation of services or structures that will improve the area and the lives of people living and working within these spaces.
What is the social value model?
PPN 06_20 Social Value Model was introduced in September 2020 which mandated the evaluation of social value in all new procurements. This applies to ‘in scope’ organisations from January 2021. The social value model builds on The Public Services (Social Value) Act and follows the evaluation approach already taken on many major UK infrastructure projects.
The PPN’s social value model contains the following themes and outcomes:
· Tackling economic inequality to create new businesses jobs and skills,
· Support UK recovery after COVID-19
· Combat climate change through effective stewardship of the environment
· Level up the UK by providing equal opportunity to reduce the disability employment gap and tackle workforce inequality
· Improve the health and wellbeing of the workforce and improve community integration.
Who is required to use the model?
For the model to have the desired impact, it is advised that roles within finance, policy or planning and delivery also consider social value implications when involved in procurement process.
The application of the social value model is mandatory in central government, but the procuring authority has discretion to apply the most appropriate social value criteria in their procurement.
This means that the relevant procuring authorities need to consider what social value impact they want to achieve, ensure this is considered in the evaluation model and then how it is applied and monitored in delivery of the contract, i.e. the social value ‘golden thread’.
What does this mean to the industry?
For in scope organisations, the PPN provides the inclusion of draft evaluation model questions in the appended guidance documents, this is helpful for driving consistency between procuring authorities. However, it should always be considered in the context of the procurement to ensure key social value outcomes are not diluted.
For example, it is also important to remember that qualifying within the social value model does not always have to be ‘social’ in nature, with environmental, economic or employment-related values such as rewards and benefits schemes and ethical supply chains coming under the social value model umbrella.
For organisation’s bidding for public sector opportunities, it is important to be instigating social value on current contracts to remain competitive for future work. It’s worth noting, PPN 06 20 recommends social value, as a minimum, is given 10% of the evaluation marks.