Government procurement is abuzz with social value, especially the difference it makes to SMEs bidding on public sector tenders. It’s been called the great leveler because it enables small businesses to compete for public sector bids against much larger enterprises. However, some industry insiders believe that social value actually gives SMEs an advantage over their bigger, better-established competitors.
If SMEs want to hold onto and grow that advantage, they have to be rigorous when developing their social value strategies. Everything must be on point, especially the alignment between their social value projects and the award criteria laid out in local and central government contracts.
In this article, we’re going to explore the relationship between social value and success for SMEs in public procurement and how to optimise social value processes to ensure the local community, government departments, and your business all benefit.
The Social Value Act
The Social Value Act has been advocating for social value in public procurement since 2013. But it only really got recognition in 2021 when it became a requirement for all central government bodies in the procurement process.
Two social value frameworks were created for the two types of government:
1) The Social Value Model for central government.
2) National TOMS Framework (Themes, Outcomes, Measures) for local government.
The Social Value Model: Assessing Social Value
It’s essentially the government’s overarching approach to social value procurement. It sets the social value obligations and priorities that central government departments, executive agencies, and non-departmental public bodies must use in their procurement endeavours.
The national social value model standardises the procurement process to make it easier to assess social value objectively and incorporate it into the evaluation and awarding of central government contracts.
The model is designed to clarify the public procurement rules detailed in Procurement Policy Note 06/20 (PPN06/20) as it explains how to use the model to incorporate social value when awarding contracts.
It states that social value must be given a minimum weighting of 10% in the total bid evaluation.
The SME Advantage
It’s important to note that social value is scored according to the impact of initiatives – the degree to which it has a (tangible) positive impact on local communities – and not on the size of the projects.
This is one of the advantages that SMEs have over larger enterprises. It’s easier for them to concentrate all their focus on one social value project than it is for a larger business that might have more than one initiative on the go.
Big businesses are also not as quick to adapt to changing social value criteria because it’s easier to turn a speed boat than a cruise liner.
The head start
SMEs often have a head start when it comes to meeting social value requirements, by virtue of their business operations.
For example:
One of the social value objectives is to address unemployment in local communities. Well, SMEs’ staff complement is almost entirely local.
Furthermore, local SMEs are likely to be familiar with the needs in their community, like tackling homelessness and providing equal employment opportunities in the workplace.
From there, it’s no big jump to develop a social value initiative or project to address these issues.
The great news for SMEs is that they don’t need to reinvent the wheel. They can join forces with existing organisations, like Meals on Wheels. They can help the organisation extend its reach with better facilities or by dedicating employee volunteer days to working in the kitchen or helping with deliveries.
Tips For SMEs To Optimise Social Value And Win Contracts
SMEs might have an edge over big businesses, but they must ensure that their efforts meet the specific social value requirements set by contracting authorities to achieve their social value goals.
They can up the ante by following these tips:
1) Approach social value as a crucial element in central government procurement.
Meeting public services social value criteria requires a proper strategy, with a proper plan that includes stakeholder engagement, company-wide buy-in, skills development, and community collaboration and liaison.
It’s only by working with the community and local authorities that SMEs will get the information and guidance they need to develop a comprehensive social value strategy that contributes to the area’s economic, social, and environmental well-being.
2) Identify and collaborate with key community stakeholders.
As mentioned above, this is necessary to address a specific need and not push your own agenda.
Open lines of communication ensure that the initiative remains on track to meet key performance indicators (KPI).
Collaboration is also a good way for the community to have part ownership of the project. It’s easier to stay motivated on things like upkeep when there is a sense of pride in your work and a feeling of responsibility to keep your work shipshape.
You’ve met your social value objectives when initiatives become self-sustaining.
3) Keep it simple; don’t aim for the sky.
There’s no need to craft an all-encompassing solution that will completely eradicate the problem. For a start, it’s impossible. It’ll also be a constant drain on your resources.
Instead, pick an element of the problem and concentrate all your energy on that.
For example, helping to address unemployment by providing training to nail job interviews.
Note: Public sector organisations choose the overarching theme (more on themes below) they want you to address and set evaluation criteria. However, it’s SMEs that take of the details, like engagement, collaboration, identifying KPIs, and fine tuning the project so that it meets the criteria set by the public services organisations.
Simple social value examples
- Supporting local charities through regular donations, such as monthly bulk milk donations to Meals on Wheels.
- Ensure supply chains are ethical. This includes indirect links in the chain, like the company that provides raw materials to your manufacturer.
- Flexi-time can be a great help to parents who attend school events or need to get their kids to a doctor ASAP.
- Apprenticeships and job shadowing for youngsters who have just graduated or are about to graduate from school.
- Implementing water-saving strategies at the workplace.
4) Set realistic goals
Keep expectations realistic (remember the sky) and set specific goals for specific social value outcomes.
For example:
Company Name is committed to raising £2000 for Meals on Wheels in Dorchester by the 15th of January 2024, with a further £1500 by the 28th of February 2024.
The more often you miss your goals and push the deadline back, the more frustrated (and angry) the community will be. Your reputation will suffer untold damage. You’re not just letting down the community, you’re also failing to deliver the social value goals set by the public services provider.
5) Measure success using the Social Value Model
The Social Value Model includes an assessment tool that measures social value initiatives against the UK government’s social value priorities.
It’s not an in-depth evaluation and analysis tool, but it provides a broad overview of what you can focus on to improve the success of your social value programme.
The government’s social value priorities are five key themes:
Theme 1: COVID-19 recovery
Theme 2: Economic inequality
Theme 3: Climate change
Theme 4: Equal opportunities
Theme 5: Well-being
Note: The themes aren’t set in stone and can be altered to suit the prevailing economic climate.
Each theme has one or two desired outcomes.
- Theme 1:
Help communities recover from the impact of COVID.
- Theme 2:
Job creation and skills development
Increase supply chain resilience and capacity
- Theme 3:
Effective stewardship of the environment (environmental well-being)
- Theme 4:
Reduce the disability employment gap
Address inequality in the workplace
- Theme 5:
Improve health and well-being
Improve community solidarity and unity
MAC
Each theme/outcome is further subdivided into Model Award Criteria (MAC). These are the specific actions taken to overcome community challenges – and there are very many.
Measuring success of policy outcomes
SMEs must ask themselves model evaluation questions and answer honestly.
For example:
A MAC-related question is: Did we fulfil our commitment to award 10 apprenticeships within 60 days?
If not, why not?
What can be done differently to ensure we meet our next goal of creating five work-experience positions over the next 10 months?
Questions and answers are learning experiences, which can analysed on a deeper level to get to the root of the problem.
Social Value Unlocks The Door To Government Contracts
While it’s true that a good social value strategy can be the key to winning public sector contracts, SMEs must remember that there is more to successful tenders. Things like early engagement and content marketing carry more weight than social value and must receive proportionate attention.
For SMEs to meet their potential and contribute to the local and national economy, they need contracts that perfectly suit their skills, capability, and capacity. Supply2Gov (S2G) provides a tender alert platform where you can find everything from cleaning, and IT tenders, to healthcare and construction contracts.
Register now and open a new world of tendering opportunities.