Making Spend Matter Toolkit - Social Value Procurement Frameworks Frequently Asked Questions (FAQs 3)
The following FAQs provide responses to common questions around Social Value Procurement Frameworks, one of the themes explored by the Making Spend Matter partners as part of the optional transfer activities.
1. What does 'Social Value' mean
Historically, two key factors have made up decision- making during procurement, the cost of the good, service or work being provided, and the quality of the potential provider. However, the EU Procurement Directives of 2014 suggested that countries and cities should also start to think about how procurement can support the achievement of wider social and environmental goals, provided that it is related to the subject-matter of the contract. 'Social value' which can also be called 'sustainability' or 'added value' is the phrase that refers to additional activities which suppliers can deliver that go beyond the delivery of the good or service and which contribute towards achieving such goals. For example, social value can include the creation of jobs or apprenticeships, the provision of training, or activities that reduce carbon emissions.
2. What is a Social Value Procurement Framework?
A Social Value Procurement Framework's core purpose is to outline the types of challenges or outcomes which procurement can potentially contribute towards addressing. It is designed to be a tool which those who are responsible for designing goods and services (Commissioners) can refer to when developing goods and services and their specifications. It will commonly be an excel spreadsheet and will include outcomes, activities, questions, means of evaluation, metrics, and a matrix (these terms are explained later). A Social Value Procurement Framework will often be framed by a Strategic Procurement Plan or the outcomes detailed in wider city strategies. Developing a Social Value Procurement Framework is the third stage of the strategic approach to procurement.
3. Why does Social Value matter in Procurement?
Countries and cities across Europe face many economic, social and environmental challenges. These challenges can be global, such as that of climate change or migration; they can be Pan- Europe, such as that of youth unemployment; and they can be regional or local, such as that of poor skills and qualifications. All of these challenges are things that have been historically addressed through regeneration or other types of projects. However, given changing levels of budgets for such activities, procurement can be viewed as part of the response to such challenges. social value therefore matters in procurement because it can be part of the solution to global, Pan-Europe, and regional and local challenges.
4. How is a Social Value Procurement Framework developed?
There are six steps to creating a Social Value Procurement Framework:
Step 1 is to identify outcomes. These are effectively the things which a city wants to address through the process of procurement. They will be drawn from the Strategic Procurement Plan and will include for example, an objective 'to increase levels of sustainable employment' or 'to increase the skills levels of the population' or 'to mitigate the impacts of climate change'.
Step 2 is to develop social value activities. These are effectively a series of activities which suppliers to the city or institution could potentially deliver through a procurement process, exercise and into delivery. They could include activities around, for example: flexible working amongst supplier workforces; the creation of jobs and apprenticeships; and policies and practices around green infrastructure. Each activity will link to an associated outcome as developed in Step 1.
Step 3 is to develop questions which could be asked during a procurement process in relation to the outcomes and activities described above. There are often three principles to developing such questions. The first is to enable potential suppliers to detail what they are already doing as an organisation around aspects of social value. The second is to enable potential suppliers to detail what value they will 'add' around particular activities related to the procurement opportunity. The third is to identify a quantifiable number of outputs which will be achieved through the delivery of the good, service or work
Step 4 is to develop evaluation techniques. There will be a blend of qualitative and quantitative approaches and a blend between what a potential supplier is already doing in relation to a question and what they would look to deliver specifically in relation to the contract in question. Generally, greater emphasis (or weighting) is often placed on the quantitative approaches and what the potential supplier is going to do as part of the contract.
Step 5 is to develop metrics. These are effectively ways in which the performance of suppliers against each of the outcomes and activities can be measured both during procurement exercises and during delivery. The measures are exclusively quantitative in their nature and require suppliers to provide information about the number of jobs they are going to create or the amount of carbon they are going to reduce, for example.
Step 6 is to develop a matrix. This will detail the extent to which the social value activities are relevant for certain categories of spend. For example, the activities will be very different for construction projects than they are for the purchase of office furniture.
5. What does a Social Value Procurement Framework look like?
6. What happens after the Social Value Procurement Framework is produced?
The most important stage of producing a Social Value Procurement Framework is probably after it is produced as it moves into implementation. Here, cities will need to ask themselves the following series of questions as to when it is to be utilised:
- Is it for all types of procurements - goods, services and works?
- Is it for all values of procurement or just above certain thresholds?
- Should a weighting be placed against social value as part of the decision-making process and if so, what should it be?
- Should someone be employed to monitor social value outcomes?
After the city has agreed upon responses to these questions, then it is time to implement the Framework. Conversations should be held very early in the procurement process, ideally in the scoping and commissioning stage. Dialogue should be held to decide which outcomes and activities are relevant, with the appropriate questions subsequently built into the specification and tender documents.