09 October 2020 #Public Procurement
The Government announced new public procurement rules on 24 September 2020 requiring Central Government buyers to evaluate the 'social value' of bids when tendering for public contracts (Public Policy Notice 06/20). Part of this initiative is to encourage public tenders to be designed so that the Government’s considerable purchasing powers can be focused on helping communities and businesses recover from COVID-19.
Public bodies are already obliged under the Public Services (Social Value) Act 2012 to 'consider' how the contracts they are procuring might improve the economic, social and environmental well-being in their relevant area. This is now being made mandatory from 1 January 2021 for all contracts procured by Central Government bodies. 10% of the available marks in those public tenders must now be for questions about delivering 'social value'. When the difference between winning and losing valuable public contracts can turn on a few marks and the smallest of margins, bidders are recommended to review carefully how their commercial proposals can promote and achieve 'social value'.
The Policy Note lists a number of 'social value' outcomes which Central Government procurement teams can chose as the outcomes they want to promote, together with a list of ways of those outcomes can be achieved.
The first outcome listed is 'COVID-19 recovery' with the objective of helping communities to manage and recover from the impact of the disease. Promoted ways of achieving that outcome through the procurement award include:
Other promoted outcomes include the creation of new businesses, jobs and skills, increasing supply chain resilience and capacity, fighting climate change and promoting equal opportunity and community well-being.
The decision on which social value outcome to promote in a particular tender will be left to the commercial procurement team to ensure relevance to the contract and the circumstances of the procurement. However, the tender must provide for a minimum of 10% of the available marks for social value “to ensure that it carries a heavy enough score to be a differentiating factor in bid evaluation”. Detailed guidance will be published before the rules become mandatory.
It is unlikely that the timing of these new procurement rules (1 January 2021) is coincidental and we may see this as the first of many changes the Government makes to the public procurement regime after the end of the Brexit implementation period when they will have more freedom (subject to the terms of any Free Trade Agreement) to rewrite the procurement rules.