This blog was written by Gayle Monk Associate at Anthony Collins Solicitors.
The legal issues around achieving social value through procurement are well documented, and despite the obvious hurdles – mostly centred on the inherent conflict between a desire to seek local social impact and the need to protect freedom of movement across a European marketplace – there is genuine opportunity to lawfully incorporate social, economic or environmental elements into a wider contract scope.
However, procurement is only one part of the picture and, other than perhaps to us lawyers, is far less important than the delivery phase. Yes, it’s important to incorporate social value properly into procurement processes, but there is little or no point in doing so if you don’t manage the contract effectively, and take an active role in achieving real results.
If you see contract management as “ensuring you get what you’re paying for” then it is obvious that you must first decide what it is you want to buy. It takes a holistic view of the entire commissioning cycle to get contract management right, and to achieve the desired results from your contracts, with the following steps worth considering:
Collaboration pre-procurement, and outside of the commissioning cycle, between contracting authorities (or even just departments within a contracting authority) could enable better integration of contracts. Contract management can have more of an impact when the liaison between different contractors, or different clients, is incorporated.
Identifying what is being purchased to make sure that it is (i) what is needed and (ii) aspirational but achievable – including engagement with the market – will mean both that social value is truly integrated into a contract (not an add-on) but also that, when it comes to the procurement process, tenderers are aware of the contracting authority’s priorities and goals. This might mean identifying the key achievable social value outcomes from a contract, or it might mean a wholesale redesign of what the contracting authority chooses to purchase.
We are all now getting used to preparing our contract and procurement documents in advance of the start of the procurement process. So this is the point at which to design sensible contract management processes into the contract, which treat social value as part of a holistic view of the contract, not as an add-on with its own bureaucracy.
The key to success is ensuring that you get the “right” tenderers bidding for the contract – and so at procurement stage thought needs to be given to how the process itself might attract – or deter – the best talent. If a small business could successfully deliver the contract, for example, be mindful of the turnover thresholds and insurance requirements you build into your selection questionnaire. Equally, for complex contracts, it can be worthwhile considering the degree of dialogue you want with tenderers – competitive dialogue can be a sophisticated tool when moulding the process around particular areas that require debate.
Proactive contract management
When social value is truly at the core of the contract, it isn’t an “add-on”, but instead is part and parcel of what the contract is seeking to deliver. Effective contract management involves:
- an understanding of the resources available to monitor and administer the contract (and this may mean setting clear priorities);
- sufficient data gathering to demonstrate the success or otherwise of the contract, without unnecessary bureaucracy;
- presentation of data against clear KPIs in a suitable medium – consider reporting and/or meetings – and over appropriate timescales;
- contractual mechanisms for contract monitoring and management twinned with a relational approach which gives early warning of concerns or risks; and
- a clear and shared understanding of the impact of success or failure to deliver – payments and deductions, rectification, termination.
Planning for exit
In some contracts, it is clear that the social value will be achieved during their lifetime – whether that is through a service delivered over a period of time, or by a number of people who have entered the workstream – while other contracts have the potential to leave a legacy. Good contract design and contract management can be crucial to ensuring that legacy is not lost.
A children’s play area constructed as part of the development of a housing estate, for example, may fall into disrepair if the contract does not contemplate its maintenance following the construction phase. Whole life cycle contract management is the key to keeping that legacy.