Social value in procurement in 2021

Undercutting rivals and promising shorter turn-around will always help when bidding for government business. Increasingly, though, these aren’t the only fronts on which you need to compete.

Since the arrival of Covid-19 – and its significant impact on business and personal lives – government departments are increasingly adopting assessment of social value when evaluating tenders. Success now relies as much on bidders’ ability to contribute to the government’s ‘levelling up’ agenda, promoting new jobs and growth, and supporting local communities as they build back in the wake of the pandemic.

The aim, from the government perspective, is manifold. Alongside building a more resilient and diverse supplier base, it wants to help more disabled employees into the workplace, improve community integration and work on health and wellbeing.

It is not entirely altruistic. Delegating responsibility in areas that have traditionally been the domain of central government allows us to “diversify our risk, create a more resilient supplier base and deliver some of our critical priorities,” explains the Cabinet Office, which is leading the drive.

A boost for business

The new social requirements were announced last autumn when the government told departments to ready themselves for the change – and they were implemented on 1 January 2021. They are good news for social enterprises, and for businesses that can demonstrate how the value they would generate goes beyond a purely financial return. This might previously have been difficult to quantify.

That’s not to say that value for money will no longer be considered. Government spends over £250 billion annually with the private sector and has a duty to taxpayers to allocate limited funds wisely. Value for money therefore remains its primary consideration. However, all other factors being equal, considering social aspects alongside finance gives businesses the opportunity to differentiate themselves along less traditional lines. They may, for example, highlight how implementing green technologies as part of a contract will contribute to the government’s carbon reduction targets, or how setting up local production lines will pay back into local communities.

Cabinet Office minister Julia Lopez outlined what government procurement experts will be looking for, which included the number of jobs or apprenticeships a contractor will provide, how they will work for the benefit of the environment, and how many other SMEs they will be including in their broader supply chain.

Beneficial partnerships

This latter point has the potential to benefit any enterprise, whether SME or multinational, that lacks the social attributes that would help it qualify on its own merits. By applying the criteria of the social value in procurement model when choosing its own suppliers, it can benefit from effective ‘buy in’ of those skills and co-opt the existing eco- and social credentials of its preferred suppliers.

As the Cabinet Office says, “the new approach will apply tests that all bidders, irrespective of their size and type, will be capable of meeting, and therefore further levels the playing field for the UK’s small businesses, start-ups, social enterprises, voluntary and community sector organisations.”

Organisations are now being required to define how they will add social value and report on progress throughout the contract being tendered. This needs new thinking to agree your social value agenda, and new processes to track where this is being contributed.   

Augmentas’ procurement experts have an unbeaten track record in writing winning bids and are fully versed in the new requirements and associated implications. Its experienced team can help you ensure your upcoming tenders have the best chance of meeting the revised criteria against which they will be judged.

For more information or to discuss how we can help you improve your tender submissions, ring us on 0203 918 8550 or email info@augmentasgroup.com