Social value has become the biggest differentiating factor in winning tenders due to the Social Value Act enhancement PPN 06/20, which took effect in 2021. As the social value plan linked to the tender bid now contributes to 10-30% of the scoring points, those companies focusing on sustainable practices and community engagement will be the future service providers for the government.
The first year of this new mandatory requirement was a time for adaptation and learning for both the government and companies. Many government bodies and local authorities were only starting to adapt the requirement for tenders (some are still working on it) by keeping social value questions open and vague or using tick box proxy tools to list requirements. As the policy note changed the procurement landscape and the job descriptions of procurement professionals overnight, there was a huge learning curve ahead.
The purpose of PPN 06/20 is to harness each tender to deliver environmental and social value within the remit of the contract. Often this means making a difference in the local community where the contract work is taking place. Our research has brought to our attention some of the major challenges that the government is now facing when applying the PPN 06/20 criteria and the government Social Value Model outcomes (impact targets) to their tendering process. There are 4 major challenges:
Unrealistic social value plans
Many government bodies have found that social value plans delivered either with social value proxy plans or a verbal, high level story format have not always led to implementation. Companies might use external bid writers or bid writing internally is not done by those responsible for social value delivery. This can result in the plans produced being either vague or lacking understanding of what it takes to deliver. Consequently, they are not delivered.
Government organisations have now started to evaluate how realistic the plan is. This means there needs to be a tangible, locally relevant action plan and specific contributions. This also applies to what kind of resources the company harnesses in the delivery and what kind of donations, volunteering, service and product contributions are given to the local community – and most importantly to whom and with which impact goals. In order to stay winning tenders, plans have to be realistic.
Social value bids list social value activities outside of the scope of a tender
Companies should only list their activities and contributions that are directly linked to the tender. Listing general CSR activities or HR related ethical and responsible recruitment practices are not tender related. They are done regardless of winning tenders. Government bodies have started to evaluate in more detail the real added value investment and activities rather than only relying on tick box lists and the bottom-line proxy value.
Companies lack contacts in local areas and cannot implement
Although the social value plan might be ambitious and to the point, when it comes to delivery, companies do not find delivery partners. This means they lack contacts in the communities they work in and do not find schools, charities, social enterprises and community groups to partner with. This slows down the delivery of social value and burdens the procurement and community departments of the government.
The government has had to hire people and create unofficial list of organisations and initiatives in the local area that companies can take part in. It is clear that this is not a sustainable way going forward. More resources are put into the activation of social value rather than on the action itself.
Therefore, having an idea of local partners and the needs of the local community at the bidding stage is key to winning tenders. It also reduces company costs when it is time for delivery as social value contributions are budgeted and action can be taken in a more coordinated way. There is nothing more costly than a hard or ‘impossible to implement’ social value plan.
There is no evidence or reporting on real impact
Social value is the difference made. That includes always qualitative data, supported by scale, reach or deliverable numerics. Government bodies struggle to monitor if the companies working for them conducted the social value activities they promised and the subsequent impact of those activities. There are cases of lost contracts as there was no proof of delivery nor evidence of impact. Government bodies are increasingly demanding results as they are responsible for reporting to their stakeholders – taxpayers, the public.
If there is no measured data from the ground, value cannot be claimed elsewhere. Therefore, having a robust reporting system in place with qualitative data and evidence-backed claims is the way forward to secure and maintain government business.
You can read more about the Social Value Act and its impact on our recent blog or download our Social Value Act Guide – specifically designed to help companies bidding for tenders understand the new requirements!
whatimpact.com is a matchmaking marketplace for companies to match with local and nationwide charities and social enterprises when donating their skills, products, services or money. The platform provides comprehensive social impact reporting on the partnerships and helps companies to build their brand and engage with their stakeholders. whatimpact.com is for all sizes and types of companies who wish to contribute social and environmental value for our society.