Shining a light on social value in procurement contracts

05/07/2021

RSUA has responded to the Department of Finance’s new policy setting minimum standards for social value in procurement contracts.

The policy aims to set high standards for how private and social enterprises conduct their business, defining social value as

– Increasing secure employment and skills,

– Building ethical and resilient supply-chains,

– Delivering zero carbon,

– and promoting wellbeing.

Stage 1 – underlining current mandatory social value measures

The first stage of the policy implementation comes into effect from 1 September 2021. It states that all government contracts should;

– comply with relevant employment, equality and health and safety law and human rights standards;

– adhere to relevant collective agreements; and

– adopt fair work practices (as per the Carnegie Trust definition) for all workers engaged in the delivery of the contract.

Ciaran Fox, RSUA Director, said: “At first glance these requirements appear quite vague and seem to be mostly a restatement of measures that should already be in place.”

Stage 2 – the start of the real changes

The next stage of policy implementation will see tenders including a mandatory minimum of 10 percent of the total award criteria to social value from 1 June 2022.

This applies to service contracts valued above £123K and construction contracts valued above £4.7m.

In line with the New Decade New Approach agreement, this stage of the policy will also require contractors to pay the living wage as a condition of contract for all tenders. This is a minimum standard that RSUA has long promoted for Part 1 architecture students.

Stage 3 – doubling the social value

In June of 2023, the social value percentage of contracts will increase to 20 percent, subject to review from the Executive.

Ciaran Fox said: “It should be noted that this is just a proposed minimum standard and Government departments can currently opt to score for value at any percentage.

“We are interested to see more detail on how this will be scored at tender stage, and if it will provide a way for bidders to distinguish themselves.”

He also noted that the outline proposal suggests that a department would be able to opt out of the social value percentage on any particular project as long as it provides a justification and the minister signs it off.

Ciaran continued: “We are looking forward to engaging with Departments who commission architects to identify the most feasible and beneficial way to promote social value in public contracts.” For more details, read the full Procurement Policy Note.