Social Value in Procurement Contracts

From 1 June 2022, as per the Procurement Policy Note 01/21, tenders must allocate a minimum of 10% of the total award criteria to social value.  Contracting Authorities should note that, subject to review and approval by the Northern Ireland Executive, the minimum weighting attributed to social value shall increase to 20 per cent from June 2023.

What is Social Value in Procurement Contracts?

Designed to maximise social, economic and environmental benefits, and as per Procurement Policy Note 01/21, social value “refers to wider financial and non-financial impacts on the wellbeing of individuals, communities and the environment.”

Consequently, Contracting Authorities will be required to consider and plan the most effective method of maximising social value within public contracts.

This may be achieved by ensuring the public contract maximises and increases secure employment and skills. For example, by creating employment opportunities in deprived areas, or supporting disabled people to develop new skills and qualifications. This may also be achieved by ensuring the contract delivers on zero carbon strategies by utilising contract specifications that support environmental protection and improvement and/or creating specifications that require supply chains to minimise carbon footprint and emissions.

What does this mean for Contracting Authorities?

Contracting Authorities should ensure that social value strategies are implemented at the pre-procurement stage and include economic, social and environmental values. By incorporating these values, it allows the Contracting Authorities to assign the most suitable contractor or contractors to a tender that will in turn provide the best value for money. In implementing Social Values, individuals, communities and the environment can all benefit.

As Contracting Authorities have flexibility to consider social and environmental aspects during the award stage of the procurement process, the implementation of social values at the pre-procurement stage is vital. Contracting authorities must also ensure they are completely transparent with tenderers with regards to the evaluation criteria and evaluation process.

Social Values are scored through the Social Value Model. Under this model, “users assess and score the quality of the social value offered in the tender against the selected policy outcome/s at evaluation stage, in the same way as they would do for any other evaluation criteria designed to assess quality…..users must award marks against the objective, non-discriminatory scoring criteria set out for each scoring band.”

When using the Social Value, a scoring approach should be created in order to clearly differentiate between different tenderer’s responses. For example optimal responses could be awarded a 4 (excellent), and unsatisfactory responses could be awarded a 0 (Fail).

If you have any questions on public procurement issues, visit our Public Procurement services page.

For further information on our ESG services, visit our ESG Hub.

This article has been produced for general information purposes and further advice should be sought from a professional advisor.