I’ve been responding to government Invitations to Tender (ITTs) for many years now. Increasingly, I’m seeing that suppliers are not being given the chance to demonstrate their ability to deliver meaningful social value. As I’ll explain, this is symptomatic of a wider issue that’s been affecting government procurement in recent years.

The government’s Social Value Model is designed to ensure that those responsible for procurement take into account how the planned investment might improve economic, social, and environmental wellbeing, in addition to producing the core deliverables.

For a government elected on a manifesto of ‘Change’, the opportunity is being missed to harness the multiplier effects of procurement to help strengthen the economy and improve the lives of citizens. In this blog, I’ll explore what government procurement sets out to achieve, what is actually happening, and how things could be improved if the government simply heeded its own guidance.

Government procurement: Expectations vs Reality

Through the Social Value Model, the government aims to achieve value for money by ensuring that its investments contribute to a wider range of policy goals. The Government Commercial Function’s Social Value Model guidance sets out the model’s five key themes, each with specific policy outcomes:

1. COVID-19 Recovery – Supporting communities and businesses to recover.

2. Tackling Economic Inequality – Creating jobs, skills, and resilient supply chains.

3. Fighting Climate Change – Delivering environmental benefits and sustainability.

4. Equal Opportunity – Reducing inequalities, especially for disabled people and underrepresented groups.

5. Wellbeing – Improving physical and mental health and community integration.

Running throughout the guidance is the message that the Social Value Model is designed to open up procurement so that Small and Medium-sized Enterprises (SMEs) have equal access to public contracts. For example, part of Theme 2 is to structure procurement to be fair and accessible to SMEs. Theme 3 encourages the use of fair selection processes and the breaking up of contracts into lots to make them more accessible. The model also recommends reporting metrics that measure the number, value, and proportion of contract spend awarded to SMEs.

In reality, this is not happening. As our CEO Steve Foreshew-Cain explained in this blog post, government procurement has taken a backwards step in recent years. Contracts are being awarded to the big IT consultancies, regardless of the proportionately big risks in that approach – not to mention all the missed opportunities for agility and innovation. In this context, support for SMEs is narrowed down to the government’s ITTs encouraging the big suppliers to provide subcontracting opportunities, which stymies the potential for SMEs to grow and flourish.

In the meantime, procuring from ‘Big IT’ results in ‘Big Procurement’. So, regardless of the size of the contract, we’re seeing ITTs with questions based on the assumption that the supplier is a large enterprise with a wide supplier network. The requirements are super-sized to those dimensions. This not only runs counter to the ambition to make procurement fairer and more accessible but also reduces the ability of smaller suppliers to offer meaningful social value.

How the misalignment manifests itself

Social value questions account for 10% of the marks in public sector tenders, meaning they play a pretty significant role in supplier selection. This also means that if the questions are not suited to the contract, an ITT can disadvantage smaller suppliers from the outset. I’ll provide some examples to illustrate the point.

Scott Logic provides software consultancy services by supplying well-paid, full-time employees with access to an Employee Assistance Programme and healthcare benefits; nevertheless, an ITT designed to procure digital services asked me under Theme 5 to explain how I will improve the physical and mental health of the contract workforce.

Another ITT required me to indicate the number of the workforce who are on apprenticeship schemes, while at the same time not allowing us to include apprentices on the proposed contract team. In the same vein, I’ve voluntarily offered to supply junior consultants as part of a contract team at no cost, but this has been rejected because the prospective client only wanted experienced people. This is directly at odds with the social value objectives in Theme 2 around youth employment and skills.

When bidding for an eight-week contract, I’ve been asked to provide the number of disabled people who would be on the very small team, completely divorced from any sense of the social value the contract was seeking to deliver in that regard. On an ITT for another relatively small contract – one with no requirement for a supply chain of SMEs – I’ve been asked to provide the percentage of supply chain companies with Cyber Essentials certification.

As I hope these examples demonstrate, something’s amiss.

There’s a one-size-fits-all approach to government procurement, and the one size we’re all having to fit is that of a very large enterprise. And while I know from experience that departmental teams often have clear ideas about the social value they want to generate, this seems to be getting lost in translation at the point when the procurement team is tasked with issuing an ITT.

How the government could deliver social value through SMEs

It wouldn’t take much effort to fix this. All that’s required is for government procurement teams to work closely with the departmental team commissioning a project, and gain a clear understanding from them of the social value outcomes they want to achieve through it. Then, they should consider the scale of a contract. With these key inputs, they can tailor the ITT questions accordingly.

Scott Logic is a purpose-driven company, demonstrated by our B Corp Certification, and there are many other relatively small companies like us that are similarly committed to delivering social value. We’re an untapped resource that’s crying out to be tapped.

I will often be asked to target social value activity at the contract workforce. However, what about the client workforce? What about the wider community? There’s a wide range of positive outcomes we could deliver under Theme 2, if asked, allowing us to help create jobs, grow skills, and build resilient supply chains.

Public sector organisations often have small training budgets and are under-resourced, but they’re tasked with safely harnessing cutting-edge technologies like Generative AI. We, and companies like us, could provide social value by upskilling public sector teams as part of contract delivery. For example, we could second junior members of government technical teams onto our graduate programmes. And we could improve the digital skills of those in management roles so they can make well-informed decisions about leveraging technology to deliver policy. However, if an ITT does not ask us to deliver these outcomes, the opportunity is lost.

Turning to community engagement, smaller suppliers like Scott Logic are often already contributing to efforts to tackle social inequality, so there are existing foundations on which government procurement could build. Again, all that’s required is for the procurement team to consider the outcomes the government wants to achieve in terms of tackling skills shortages and supporting disadvantaged groups, and then to ask the supplier to propose how they will deliver those outcomes. However, if an ITT asks us to focus our social value answers on our own contract team, the opportunity is lost.

The golden thread running through the Social Value Model is the importance of supporting SMEs. To quote the government guidance:

“Markets with a broad range of suppliers of different types can offer better value for money, promote innovative solutions and give public services access to expertise and knowledge on complex issues. There is also a commercial advantage to spreading risk more broadly since it reduces commercial risk.”

(The Social Value Model, p.10, ‘Theme 2: Tackling economic inequality’)

I couldn’t have put it better myself. The best way for the government to deliver on the Social Value Model is to follow its own guidance. This will result in many more contracts suited to smaller suppliers, making procurement fairer and more accessible.

Let us contribute

The government has a very large task on its hands to deliver on its change agenda and make a positive impact on the lives and life outcomes of UK citizens. There’s a ready-made network of smaller suppliers that are eager to do their bit in delivering social value outcomes for the government. But every time an ITT takes a one-size-fits-all approach, those potential social value outcomes are lost.

By simply following its own guidance, the government can enable SMEs to contribute to its social value goals – while at the same time creating innovative solutions, de-risking public investment, and delivering better value for money.