Social Value in Procurement

21st January 2016

Delivering Social Value in Harder Times

Introduction

• About echelon• Scoping • Developing the Tender• Pricing considerations• Procurement model considerations• Cost and Quality evaluation• Locking the offer• Measuring performance• Questions?

About echelon

• Procurement - £4.0 bn services procured to date• Review Process – process built around full

stakeholder engagement• Bespoke – developing specific models built around

each client’s needs• Savings – £400m+ of direct savings• Innovative – development of new delivery

models• Award Winning – multiple awards from sector• Social Value – working with hact and Trowers to develop SV toolkit

Scoping

• Define Social Value requirements for project• Engagement of stakeholders during stage• Soft market test to ensure viability • Use of hact tools (e.g. Community Insight)• Consideration of Tenant’s requirements• Align with your profile/aspirations• Ensure you select best procurement route Tip – allow enough time in procurement timetable

Areas for Consideration

• Training Academy• Employment opportunities (targeted)• Supporting Residents back to work• Apprenticeships• Local supply chain• Use of SMEs• Support Social Enterprises• Engagement with schools/colleges/agencies• Community events

Developing the Document

• Clear definition of Social Value in ITT• Set the scene for bidders - data • What’s the approach?

• Route 1 - this is what we want – deliver it• Route 2 – tell us what you can/will do?

• More prescriptive = easier to measure harder but differentiate

• Ensure granular cost model (more later)

Consideration – prescriptive vs. open-ended?

Example - Definition

Example – Term Brief

Pricing

• Understanding of costs attached to offer• Direct Overhead?• Levy?• Central Office Overhead?

• Consideration of how you want cost presented• Ensure clarity within pricing model• Recommend granularity for evaluation purposes

Procurement Process

• Allocate proportionate marks within evaluation process

• Open/Restricted – need to define offer as no interaction

• CD – allows development and ‘honing’ of offer• Use of specific dialogue session on CD

Evaluation - Quality

• Clearly defined evaluation criteria• Weight score appropriate to importance• Potential to pass/fail on minimum requirements• Measurement of additionality• Define evaluation panel to bidders• Ensure evaluation panel equipped

Key Consideration – how do you evaluate ‘additionality’?

Evaluation – Quality Example

Evaluation - Cost

• Bottom line evaluation or line by line evaluation• Extract Social Value cost within process?• Ensure bidders have followed instructions• Will largely be driven by choice of commercial

model

Consideration – bottom line or extracted costs (this is a key topic of discussion with working group)

‘Locking’ the Offer

• Two strands to the delivery of Social Value• Strand 1 – your stated requirements• Strand 2 – the Service provider’s offer

(additionality)• Develop ‘Promises’ document and append to

contract• Utilise mobilisation period to review and ensure all

stakeholders understand • Measure!

Measuring Performance – Delivery

• Develop specific KPI to measure performance• Could be ‘soft’ or ‘hard’ measure• Options:

• Overall performance against target• Individual measures/targets

• Option to link to variable profit and/or develop as a ‘drop-dead’ KPI

• Annualise and reset

Example

Measuring Outcomes

• Potential to use Wellbeing Value Calculator as part of assessment?

• Ongoing measurement of input versus output costs:

Questions

Mathew Baxter – Managing DirectorE-Mail: mathew@echelonconsultancy.co.ukTel: 07989 325887