Sixty percent cost: forty percent quality – this is the weighting that most bidders will be used to seeing as being applied to their bids in public procurement tender exercises – demonstrating that the purchaser (e.g. a Government department) places more emphasis on the economics of the bid rather than the quality of the solution.
Even more extreme; the procurement rules allow the purchaser to exercise its considerable discretion in designing a procurement, and selecting award criteria, to evaluate 100% on the basis of cost.
Whilst there is nothing inherently wrong with these familiar approaches (and indeed, whilst they may be perfectly appropriate in certain circumstances), there is currently no imperative on Northern Ireland Government Departments to consider things like Social Value during the award stages of public procurement exercises. Achieving Value for Money is undoubtedly a crucial objective for procurement law, but there are other noble aims that can (and, arguably, should) be pursued as part of the expenditure of public funds by government bodies that were being missed.
For those reasons, the NI Department of Finance has mandated that the award by Government Departments and NDPBs of service and works contracts over a specified value threshold must reserve at least 10% of the evaluation for “Social Value” considerations. Those considerations can include a broad range of elements, including: creation of jobs; higher representation of disabled people in the contract workforce; promoting localised supply chains (to minimise carbon footprint); and supporting physical and mental health and wellbeing of workers. Further, such public contracts will also require contractors to pay all workers at least the Living Wage, rather than the statutory Minimum Wage. Although early uptake is encouraged, this new policy takes effect from 1 June 2022 and (subject to Executive review in the meantime) sets out the intention that the reserved allocation for such Social Value considerations should double to 20% in 2023.
These changes have the potential to make a significant difference to the make-up of bids for Northern Ireland’s public contracts.
In particular, we envisage this being a specific opportunity for the third sector to become more involved in large public contracts by their involvement in consortium bids and defined supply chains. Openings may also become available for local suppliers, who previously were unable to match the prices offered by larger (but more distant) competitors, but could now benefit from the ability for purchasers to favour the security of supply and reduced carbon footprint offered by more proximate bidders.
Although there will still be lessons to be learned (both by purchasers in how best to structure and score these questions and monitor implementation, and bidders in how to answer them and deliver upon the commitments made), we expect the changes will have significant positive impacts on those noble aims for which procurement law should be working.
While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.
