Progressive Procurement – Should Private Industry Consider Social Value in Procurement?

Recently an article on Delivering Social Value in Public Sector Procurement caught my attention.  In the article, published July 2017, Teresa Grant CEO of the Trafford Council in Manchester England discusses how the procurement team at the Trafford City Council leveraged an RFP for IT software and technology to create an employment training program for prison inmates.

The training program was presented as part of a Vendor’s proposal to supply IT equipment and software.

The training program offers inmates the opportunity to earn employment qualifications and experience by dismantling outdated IT equipment.  The equipment which would have otherwise been crushed smelted and shredded is now  broken down to separate boards, precious metals, and plastics to facilitate recycling.

Inmates benefit from acquiring work experience and may gain National Vocational Qualifications (NVQ) which make them “work-ready” when they complete their sentence.  The Council benefits by saving hundreds of thousands of pounds previously paid to third parties to discard the equipment.

The Community and the Environment are also winners in this equation.  Dismantling, instead of discarding IT equipment ensures that zero percent of the components end up in landfills and the social benefit of assisting inmates for their transition back into society reduces recidivism rates and demand on other social services.

You may be asking yourself why either party would conceive of such a program as part of an IT solicitation?

The Social Values Act of 2012 is, “an Act to require public authorities to have regard to economic, social and environmental well-being in connection with public services contracts“.  In the UK, this federal procurement law requires public procurement entities to consider how their solicitations can, “improve the economic, social and environmental well-being of the relevant area“.  The law and the text that goes with it is intentionally quite broad to allow for a wide range of considerations.

Social Value Procurement (SVP) is a trend that is growing around the world.  SVP is mainly being practiced at the local or special interest level, but many governments including the UK, Australia, Canada, and the US are starting to require that social well-being be considered in public procurement.

So with this initiative on the horizon, I wanted to reach out to all of my procurement readers and raise a question;

Should Private Industry Consider Social Value in Procurement?

Given the newness of this concept, I recognize what a loaded question that is, so as you consider your response, I would like you to also consider the following questions:

  1. Does Social Value require an immediate financial benefit, or is it okay to pay more when a greater good is derived?
  2. How would you define and/or evaluate “Social Value”?
  3. What metrics (other than cost) would you use to measure Social Value?

I’m deeply interested in your perspectives and will be sure to share your feedback in a future posting.  Tell me your stories.

Thanks for reading.  If you enjoyed this content, please feel free to browse my previous articles and please like, share, comment, and subscribe.  This helps promote my content and is greatly appreciated.

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