Following the government’s commitment to social value and their promise to streamline the bidding process, NHMF NPC Frameworx Director, David Miller outlines why having a clear social value strategy will be key to achieving successful bids in the future.
Since the Social Value Act came into force in 2012, the sector has seen an increase in social value weightings for government contracts – from 2.5-5% to 10% with some contracting authorities going even further to demonstrate their commitment to giving back to the community.
With the new Procurement Act on the horizon, the removal of just one word in regard to the tendering process is an indication of a major shift in favour of social value – with contracting authorities no longer being asked to look for the “most economically advantageous tender”, but rather the “most advantageous tender” i.e. the one that best satisfies a contracting authority’s award criteria.
In addition, suppliers and buyers will be required to publish KPIs on key commitments within the contract – including how they have delivered on social value. When you factor this in, alongside a greater emphasis on transparency and accountability, it’s clear that working with a procurement framework like NPS Frameworx, that has social value embedded into its core values can only be an advantage.
6 reasons why a social value strategy is key to the procurement process
Building brand reputation
Having a culture that promotes social value helps to create authentic, credible brands that attract like-minded partners, investors and employees. If you want to stand out from the competition, you need to make sure you are showcasing the areas where your business is making a tangible difference.
This could be initiatives that have enhanced the lives of residents in local communities, or a company culture that promotes ethical and environmentally sustainable business practices. Showing you can deliver against your social value KPIs is also reassuring for contracting authorities, so they can clearly see you share their vision.
Strengthening community ties
Contracting authorities are committed to fostering a sense of community at grass roots, and they are actively seeking partners who can support them in this. Service providers who hire locally, offer training programmes, pay fair wages and go the extra mile when it comes to delivering better outcomes for residents all contribute to the wellbeing of local communities. This helps contracting authorities to deliver better resident engagement programmes and creates a strong sense of community.
Promoting sustainability
Sustainability and social value go hand in hand. Providers will need to demonstrate they are following sustainable working practices with measurable outcomes that are built into their social value strategy.
In return, contracting authorities will need to show that robust environmental credentials are an essential part of the decision-making process. This is particularly important for organisations using Environmental, Social and Governance (ESG) frameworks, where contracting socially responsible suppliers makes it easier to monitor their progress.
Best Practice and Compliance
Including compliance in your social value strategy helps to ensure both suppliers and clients are sharing best practice, tracking relevant KPIs and mitigating the risk of any legal challenges down the line. From February 2025, the renewed emphasis on transparency is likely to make this even more important, so it’s worth checking your current guidelines now, to see if there is room for improvement.
Driving Innovation
Socially responsible procurement partners are often at the frontline when it comes to adopting more advanced technologies, sustainable business practices and ethical supply chains. Working with more progressive service providers may help to foster a more innovative company culture, where teams are more open to exploring challenges from a different perspective you may not have considered before.
Collaboration and long-term relationships
Organisations who prioritise social value are often looking to create more long-term partnerships with trusted providers, who are seen as more than just another supplier. By aligning your goals with your client’s values, suppliers can build stronger partnerships that ultimately lead to a shared sense of accountability, resulting in better outcomes for stakeholders, employees and end users.
In conclusion, providers who invest in social value will find themselves in a stronger position – not only in terms of winning tenders, but also when it comes to building a successful business that contributes to society, promotes best practice and encourages sustainable growth.
Contracting authorities also benefit from working with like-minded partners who share their values and support them by creating a more forward-looking culture that delivers better outcomes for the communities they serve.
Find the right Framework
Since launch in January 2022, NHMF NPC Frameworx is proud to have procured over £10m of works. But we understand that’s not the whole story. As a not-for-profit framework, promoting social value has always been part of our culture and it defines what makes the Frameworx difference. Because of this, we are expertly placed to advise suppliers and contracting authorities on how to build social value into their procurement process from the get-go, to ensure our members create longstanding business partnerships that make a difference.
To find out more about how Frameworx can help with your next procurement project, please get in touch with the team.
Author: David Miller, NHMF NPC Frameworx Director
Consultant at Rand Associates, Chair of M3 Housing
David is a quantity surveyor by profession, being a Member of the Royal Institution of Chartered Surveyors, and a Fellow of the Chartered Institute of Building, he joined Rand Associates in 1975 and has been involved in the maintenance of social housing for the last 25 years.