What is Social Value?

Over ￡3bn is spent annually on supplies, services and construction works by public bodies throughout Northern Ireland.? The Executive has recently identified that there is a missed opportunity for social development and has decided that the public procurement process should have a bigger role to play in achieving the outcomes of the Executives Programme for Government.??

We must first address the lack of an industry wide settled definition, as currently Social Value is a bit of an unknown.? Locally, social value has been defined by Belfast City Council as:?

“A commitment to using our influence and procurement power to help deliver the Belfast Agenda; to drive inclusive economic growth, improve the local environment and support vulnerable people – while ensuring the best possible value for money when purchasing goods, services and works for the people of Belfast.”1?

The benefit of considering Social Value as part of the procurement can be in large scale sporting events such as the Olympic Games, the World Cup and the European Championships.? These events have achieved and delivered long lasting benefits far in excess of the infrastructure that was constructed for the events themselves.??

The Social Value Policy will include not just the requirement on public bodies to enhance social value, but the imposition of conditions into the assessment of tenders used for procurement that require the implementation of social value.??

With the executive’s new direction, Social Value is set to become a more prevalent factor in the Northern Ireland procurement process.? The era ahead will by no means present a smooth transition and is astutely defined by a Sustainability Manager within a Major National Contractor who stated:?

“To deliver social value, carrot and sticks are needed.”2?

THE NEED TO KNOWS?

The Executive has introduced a new requirement, from 01 June 2022 a minimum of 10% of the scoring in any public tender process (above the threshold) must be allocated to Social Value.? Accordingly, there will be a significant shift in the public procurement process in Northern Ireland. ?

This requirement will apply to contracts above the threshold where the Procurement Regulations apply.? Currently:??

• Service contracts valued above ￡122,976; and??
• Construction contracts valued above ￡4,733,252?

These thresholds account for 97% of total government procurement spending in Northern Ireland.???

Subject to review and approval by the Executive, the 10% weighting is to double in June 2023.??

GETTING AHEAD OF THE CURVE?

Many contractors and contracting authorities have already been taking a proactive approach to this new era in procurement.? Clanmill Housing Association, National Trust, Translink, Social Enterprise NI, Invest NI and Belfast City Council have already taken steps to implement Social Value guidelines and initiatives.??

The requirement will introduce more subjective assessments for social aspects of tenders allowing for a greater distinction to be made between tenderers on the basis of secondary benefits unrelated to the financial and qualitive aspects of the product being procured.? This will be a venture into the unknown for both sides of the table in a tender process.? Such unfamiliarity may see an increase in procurement challenges and other disputes.???

It is advised that all contractors and contracting authorities adopt a proactive approach ahead of this new policy coming into full force and effect.? Industry professionals alike will succumb to new norms which are likely to include:?

• Increase in Contract Prices;?
• Increase in Tender Award Challenges;??
• More Completive Procurement Processes;?
• Changes to Contracts; and?
• Increased Requirements for Delegates to Receive Training??

QUIGG GOLDEN COMMENT?

Quigg Golden will be releasing more initiatives to assist this transition period for contractors and contracting authorities in the following areas:?

• Achieving Social Value;??
• Scoring Social Value and the challenges to come;?
• Contract Drafting – Avoiding the Common Pitfalls;??
• The barriers to achieving Social Value;?
• Challenging and Defending Tender Decisions; and??
• Monitoring Social Value.??

Quigg Golden will be holding a free lunchtime webinar on this topic on 11 May 2022 – the link to register is HERE.??

Quigg Golden are the market leaders in construction and procurement law in the UK. Should any of the above issues affect you or your business, Quigg Golden can provide expert advice and training on such pertaining matters.??

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