Measuring social value – a holistic approach

At Anthony Collins, we've long argued that real social value (remembering that under the Social Value Act, social value means ‘the economic, social and environmental well-being of the relevant area’) is achieved through embedding both policy ambitions and the desire for impact into the core of any contract - i.e. social value should be part of what is being procured, not an add-on. We know procurement officers and commissioners alike frequently get frustrated at being expected to compartmentalise social value into a percentage of the overall award criteria, when that both (often arbitrarily) detracts from other elements of the quality requirements, and frequently places control over what social value is achieved in the hands of tenderers and not the contracting authority.  

The most recent iteration of the Social Value Model (see PPN 026) requires central government to impose specific percentages to specific social value outcomes focused on jobs and skills:

for contracts valued at £1m and above, but less than £5m, apply a minimum 10% weighting (or equivalent measurement), and for contracts valued at £5m or above, apply a minimum 20% weighting (or equivalent measurement), of the total score that may be given to tenders, to the criteria set out in the social value model. 

Remembering that your evaluation criteria should at all times be relevant to the subject matter of the contract, this presupposes that the jobs and skills outcomes that Government has chosen to distil social value down to are relevant to every contract.  

As a contrast to the Social Value Model, taking a holistic approach requires a contracting authority to consider, when scoping the contract, what social, economic and/or environmental outcomes might be improved through the proposed contract. The contracting authority has the opportunity, if grasped at inception, to make a considered decision about what of its policy and strategy objectives can be delivered best through the contract, and to allow that decision to sculpt the contract specification and shape the procurement process. Weaving the golden thread of social value throughout the procurement - all the way from preliminary market engagement through to contract management.  

A client posed a question to me recently in the context of a proposed procurement:  as social value is built into the subject matter of the contract and we're therefore not allocating a specific percentage of the qualitative award criteria to social value (because social value is woven into 100% of the contract) then what do we measure? How in practice do we move from arbitrary percentage-based thinking and a reliance on proxy values that aren't relevant to our communities or the contract, to a more holistic, policy-driven specification and evaluation of social value?  

And it is a good question. The short answer is that, when social value is built into your specification, it is inherently built into every aspect of the evaluation criteria set for the procurement. Notionally, there is nothing more that needs to be done. 

However, many tenderers are more accustomed to the carving out of social value (that the Social Value Model envisages) which can mean that the approach to tender evaluation that takes the golden thread approach can require some explaining and a shift in emphasis. Contracting authorities may need to employ some careful signposting for bidders (in some cases a large neon arrow pointing in the right direction) so that it is clear where in the tender submissions social value will be evaluated. And where social value is integrated into every part of quality evaluation, the clear expression of the contracting authority's requirements for each question or method statement will need to include a reminder of the social value being sought. 

Transparency with tenderers and clear instructions in the tender documents are, as ever, key to a successful outcome. Some tenderers are champing at the bit to demonstrate that they pass the social value DNA test rather than treating it as an add-on, while others will need a clear steer about the contract authority's requirements in the context of a whole-contract approach to social value. In both cases, tenderers should understand that a lack of a specific social value weighting in the quality award criteria is not an indication that social value is not important to the contracting authority, but rather the very opposite.  

For support and advice with your procurement strategy, please get in touch.