Peter Coy, Social Value Implementation Lead, MoD
Why does the MoD have a Social Value Centre of Expertise?
Talking as to why defence has a Centre, social value is a core element for us.
It runs through a lot of what we do. When we looked at how we were going to implement the Public Procurement Notice, it was apparent that there was a transactional piece that we would need to introduce into the tendering process, which we would need to support.
We wanted to move beyond a box-ticking process ticking perspective - that would only take us so far. Social value, in its widest sense, is about the value add that your activities produce for UK Plc and society, and Defence already has a lot of that that might not be apparent to folk from the outside.
Things like social mobility - how we recruit into the armed forces, the skills and training that's available to members of our armed forces are a focus on people, also when they're veterans and move on. And our relationships with charitable organisations and third-sector organisations in this sphere.
Then there's the focus on well-being, fitness and health, a big part of the military culture. If you extend a bit further and think about Defence as a contributor from a government perspective to carbon and how significant defence is in that area, you start to see the importance of climate change too, as well as other elements of the model such as equal opportunity and social mobility.
We wanted to make sure that we followed it through in the right way in terms of commercial processes, but we moved beyond that and made sure it was aligned with our strategic outcomes so that we could really push beyond a tick-box approach to social value and really get after the impacts because we recognise some of those values already.
What does social value mean for defence and how important is it for the MoD?
Social value at its heart is about providing and delivering additional benefits through the procurement activity that we are undertaking. So there's a big opportunity in Defence as with other central government departments, but the challenge is making that a reality.
In Defence we have areas of focus, so we can have conversations with our suppliers outside of individual procurements and make them aware of those. Then when it comes down to individual procurements, we want to look at what is relevant for that specific procurement.
This is not Defence saying to the suppliers, we want you to deliver a hundred apprentices. What we're saying is this is the policy outcome that we're going for, and this is why it's important to Defence. What is your understanding of that issue based on your knowledge of the market that you're in, your supply chain, the issues that you're aware of from the communities that you either recruit from or you work in, and the environmental factors that go around that?
There's a bit of a challenge for the suppliers to have to do that thinking and then come forward with proposals that meet those policy outcomes and demonstrate that impact and benefit on those policy outcomes.
It’s like a golden thread that weaves through everything you do; when you're on contract, you've got that focus - we're doing this because we can draw that golden thread back to those policy outcomes that are important.
Social value gives us an opportunity to show people, whether that's suppliers and their employers, or the public or internal to the MoD, actual tangible things we can do to get after that goal and bring them to life.
No individual procurement on its own right is going to solve climate change, as an example, but there's a real opportunity. The cumulative effect of all that change and additional benefits can make a big contribution. It's just as important that suppliers that don't win the contract have still been influenced by social value because they've had to go through that thought process.
They'll learn from that, and they'll improve their offer next time. The very fact of asking for drives more thinking about it and pushes us closer to that goal, even if they don't win the bid.
Does the MoD have any particular challenges in terms of integrating social value into its requirements that are unique to the MoD?
Part of the challenge in Defence is just how much procurement we're involved in, you've got from the defence nuclear right through to Defence Infrastructure Organisation, and we buy everything in between.
It's the breadth of the procurement and applying it across that in a consistent way. Any large organization is going to have a challenge in being consistent and we can certainly continue to improve and we strive to do that. We have around about 270 contracts where social value was part of the evaluation criteria, so our biggest challenge, because of the breadth of the organisation and the range of stuff we're buying, is achieving that consistency.
Have you seen any contracts where people have won or lost purely on social value?
The way the weightings work means you have the cost and non-cost element, and social value comes in the non-cost, so it is part of the overall score. You do see companies scoring higher than other companies, but whether that's the winning factor depends on what happens with the technical and cost elements. The social value element isn’t scored last to make it the differentiator, it's not as simple as that.
In terms of making a difference, there are many areas we can point towards to highlight this. We work with the defence supplier forum to engage with suppliers and get really good feedback about how it's going.
When we surveyed that membership around the changes they were making to respond to social value, and high percentages have board-level responsibility for social value, have social value strategies, and have plans in place to measure their performance of social value.
This was not only our large strategic suppliers, but also SMEs. So we know across the board that suppliers are adjusting and responding and getting ready to respond by giving board-level responsibility for it. So that's really heartening - that they've fully taken it on board and embraced it.
What does the MoD want to see in a social value response?
There are three key things which together curate a good answer.
Number one, we're looking for understanding. What does the particular theme, policy outcome, and criteria mean for you and your supply chains? So you need to demonstrate that understanding.
Number two, we're looking for impact. Is it additional? How is it going to help us get towards the government policy outcomes that in the model?
Number three, confidence. What confidence are you able to give, that what you're proposing is deliverable, your plan, how you're going to measure it and how you're going to report on it during the life of the contract.
“It’s like a golden thread that weaves through everything you do; when you’re on contract, you’ve got that focus - we’re doing this because we can draw that golden thread back to those policy outcomes that are important.
Social value gives us an opportunity to show people, whether that’s suppliers and their employers, or the public or internal to the MoD, actual tangible things we can do to get after that goal and bring them to life.”
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