Winning Defence Proposals: The Power of a Strong Social Value Statement
Many defence organisations and SMEs are only just becoming aware of the latest changes to the bidding process, in the form of the mandated and weighted Social Value section that is now applied across defence in new tenders.
When SORs for multi-million pound contracts drive convergence between competing offers, the scope for differentiation is limited – so the company that takes Social Value seriously can gain a serious advantage.
What is Social Value?
Social Value has historically been seen as quite an ambiguous term. The impact a company can make on a community, be it an economic or environmental outcome, can be perceived in a multitude of different ways depending on which emphasis the tendering authority has decided to focus on.
The term ‘Social Value’ encapsulates the broad effects that organisations make by ‘contributing to the long-term wellbeing and resilience of individuals, communities and society in general’
(source: social value portal).
For example:
- If the creation of an enlarged workforce is a consequence of winning the bid, how can you ensure that this workforce has been recruited from as wide an area as possible including those that might otherwise not have had access to those roles due to them being from underrepresented groups.
- Do your current policies allow for the most transparent possible recruiting process?
By adding social value outcomes to their contracts, public sector organisations can influence how their communities will be best served by selecting those bidders that can provide the maximum social value benefit to their local region or communities.
This is now being taken directly into account alongside the technical and commercial aspects of the solution.
Why is it important?
The Social Value section of a bid response is primarily a qualitative approach of how you intend to tackle the priority areas that have been set out in Social Value section of the bid tender documents.
By using the Social Value Model as set out in PPN 06/20 (see figure 1 below), commercial staff in central government departments can review and select a range of social value options that they wish to include.
Suppliers will need to use the Model Award Criteria (MACs) that are set out in The Social Value Model when drafting their statements of intent. The MACs provide examples of how to demonstrate Social Value throughout the project lifecycle so that suppliers can:
- Offer up their method approach as to how they intend to proactively go about delivering on these statements.
- Back this up with a response that includes a timed action plan and
- Demonstrate that these actions have been cascaded down the supply chain
Delivering the above provides the backbone of the response required.
Background
Back in September 2020, the Cabinet Office published a new Procurement Policy Note (PPN) 06/20 that required additional Social Value benefits to be explicitly evaluated in all central government procurement rather than just to be ‘considered’ as had been done previously.
The new PPN sets out the Social Value Model as set out in the diagram below.
Figure 1 The Social Value Model
These five themes and eight outcomes are applied to each new public contract (where the requirements are relevant and proportionate) which is put out to tender.
Since 1 June 2021, this model is now being used across all MOD procurements and is currently given a minimum 10% weighting in the scoring of tender applications. This is only a minimum however and could be increased. (Where it has been used previously by Local Authorities, this weighting has gone up to between 25-30%).
The contracting authority decides, along with their stakeholders, which of the five themes and eight outcomes should be applied to each tender.
So what?
It is vital that those with an interest in winning bids in the defence market (Primes and SMEs alike) start to understand the implications of these new requirements quickly if they have not done so already. These requirements are no longer just a tick box exercise where they can repurpose an existing CSR policy to cover themselves.
Each response must be tailored to the individual project and be measurable. It is therefore an area that requires considered thought alongside a wider understanding of the specific challenges affecting the defence industry regarding each of the specific Social Value policy objectives.
What you can do:
- Look for the opportunities for social value within your existing ways of working
- Update your existing processes and policies to provide the greatest social value return in the areas that have been identified as being a required policy outcome for that tender
- Make simple changes to your processes to embed Social Value into the new way of working post Covid-19.
How is it measured?
The social value section of a MOD bid only requires a qualitative answer on submission but upon award, the ability to measure the ongoing contract’s social values, throughout the lifecycle of the project, will be expected.
- Delivering a method of doing so will be key to an organisation’s ability to demonstrate that they are able to deliver on their commitments
The National Social Value Measurement Framework – or National TOMs for short – is a method of reporting that has been developed to measure social value to a consistent standard where TOMs stands for Themes, Outcomes and Measures. The Framework was developed by The Social Value Portal and launched in 2017. The Framework is reviewed and endorsed by the National Social Value Taskforce.
A set of proxy figures have been developed for suppliers to be able to measure Social Value. These figures are developed from adaptations of benefit analysis techniques as outlined in the HM Treasury Green Book and other relevant public sector and impact assessment guidance documents.
A pilot study has been conducted recently between the MOD and the Social Value Portal using the TOMs and so it is likely that an updated version of these will be released soon. This will provide organisations working in the defence sector with a better way of delivering tailored and quantifiable Social Value benefits to defence customers. In the meantime, example metrics that you may want to use are available in the Reporting Metrics within The Social Value Model. These metrics should be the foundation of how organisations approach the question of Social Value in the future.
What else can you do to get a head start on the competition?
As specified in the Model Award Criteria, to gain a high confidence rating (above 70%) your Social Value response is expected to show:
- Very good understanding of the requirements
- Excellent proposals demonstrated through relevant evidence
- Considerable insight into the relevant issues
- The response is also likely to propose additional value in several respects above that expected
- The response addresses the social value policy outcome and shows in-depth market experience
The expectation is that Social Value will become a fixed part of what is offered in any future tendering opportunities.
Therefore embedding Social Value into your current policies and ensuring that you have thought through the wider benefits that your organisation will bring to each bid if successful, could become a main differentiator between winning and losing a bid in the future.
Salentis have recently supported several clients to answer the Social Value questions now being asked as an explicit requirement on any central government-issued bid. As a result, we are now able to see a more holistic view of what these new requirements are asking for and how this might be translated into actionable method statements in your own bids.
If you would like to learn more about Social Value and how to prepare your current bids to talk to this new Model Acceptance Criteria, please don’t hesitate to get in touch with us at Salentis.
Some links to reference docs are:
Guide to using the Social Value Model
Author – Louise Barltrop
Article published: November 2021
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