Delivering social benefits through public procurement: A Toolkit

2010

Contents

Delivering social benefits through public procurement: A Toolkit

1. Introduction to Social Procurement 4

2. The Golden Thread 8

2.1 Before Advertising

2.2 First Notification

2.3 Tender Documents

2.4 Evaluation

2.5 Contract

2.6 Managing, Monitoring and Reporting

3. Procurement Exemplars 48

4. Finding Out More 54

Note: This toolkit provides general advice. You should seek legal advice before proceeding with a social procurement strategy on any given project.

1. IntroductionIntroduction to this toolkit

This toolkit is designed to guide procurers who are managing above-threshold competitions subject to the requirements of the Public Contracts Regulations 2006 through the process of securing social benefits from capital projects. It is a dynamic document providing a skeleton to build on along with practical information and signposts to further help. As you can see in Section 4 and on the website, there are various sources of information out there to help you come to grips with procuring social benefits. This toolkit complements some of these more detailed documents and should be read in conjunction with them if you want to find out even more.

But before looking at how to go about procuring social benefits, it is worth thinking about why you should bother.

1.1 Introduction to social benefits

1.1.1 Why do it?Why bother? Because in most cases you can integrate social benefits into every stage of the procurement process. If you don’t you are missing a great opportunity to maximise the social benefit of your project, such as providing apprenticeships or other opportunities for the long-term unemployed.

Of course, it is tempting to dismiss social procurement as being in the ‘too difficult’ category, but we hope that this guide helps you to see that it is within your reach. The legal precedents are there and this guide contains example case studies, wording for OJEU or contract notices, excerpts for inclusion in tender documents, sample evaluation matrices ... and a whole lot more. Information on these and other aspects of social procurement can be found on a dedicated website hosted at www.sibni.org.

Requiring contractors to deliver social requirements means that you and your community can get more, both directly and indirectly, for your money. You can use them to bring long-term good to local residents and their community by:

Creating skills and training opportunities (e.g. apprenticeships or on the job •training)Creating employment opportunities for the long-term unemployed or NEETs•Encouraging equal opportunities for all, regardless of gender, race and disability•Supporting SMEs and social enterprises •

There may be wider social benefits too, such as: Promoting fair and ethical trade •Driving innovation in design or build •Protecting the environment •Community ownership of public assets•

Cutting edge organisations have been using regeneration, construction and other development contracts to bring wider social benefit for 20 years. The 2001 Review of Public Sector Procurement in Northern Ireland began the process of formalising behind the scenes work to embed social and sustainable procurement into its public sector practices. Work has progressed significantly since then, for example with the publication

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of the Equality Commission for Northern Ireland’s report on Equality of Opportunity and Sustainable Development in Public Sector Procurement (2008). The Construction Forum for Northern Ireland has recently recommended that its 21 social sustainability objectives should be included in all future Construction contracts. More demanding objectives are recommended for economically disadvantaged areas.

1.1.2 How much do social benefits cost?

Although procuring social benefits can have resource implications for the procurer social benefit clauses do not necessarily have to add costs to the contract. You can ensure that there are minimal cost impacts for the contract by requiring only social benefits that are appropriate to the size of the contract and the expertise of the contractors. Once you start asking for more than they can deliver or more than the contract warrants you may see costs rise. Costs can also be kept at a minimum by working with existing gateway agencies and initiatives that can provide referral mechanisms, funding and guidance. The costs to you, as procurer, may be in the staff time needed to kick-start the process. Monitoring the delivery of benefits also requires time and the right systems in place.

Evidence is beginning to emerge to back-up claims that social benefits do not mean increased costs. Data from the Glasgow Housing Association Method Statements, which was part of the Scottish Community Benefits in Public Procurement study, showed that the bidders who scored highest overall also scored highest on the recruitment and training requirements (see Scottish Government, 2008). Which means that the tenders that scored the highest for value for money also offered the most attractive training and recruitment provision.

1.1.3 How legal are social benefit requirements?

For some procurers, concerns about breaching UK or EU procurement rules have prevented them from making the most of regeneration or other local development projects. But procurers are entitled to require social benefits as long as they operate within the relevant legislative framework and guidance. The primary sources of law clearly recognise the possibility of incorporating social benefits into the public procurement process. In support of this, various sources of guidance have been issued by local, regional and European Government which clarify, to some extent, what is and is not permissible (see www.sibni.org for more information). As with many aspects of the procurement law before you begin the process you will want to take time to consider how best to go about it. You then need to tell bidders as early as possible what you are planning and make sure you follow through with those plans!

Core v Secondary Requirements

One of the first things you will want to consider is whether the social benefit is a core requirement. “Core requirements” are those that form the “subject of the contract” and can be supported by an authority policy. The OGC’s note “Social Issues in Purchasing” (2006) defined core requirements as those that are:

“an essential part of the contract, and this should be reflected in the specification and the conditions of contract... It is possible for a social issue to be a core requirement provided that it is central to the subject of a procurement...”

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Therefore, if you have established that a social benefit is a “core requirement” (and all other conditions are satisfied) then you may take it into account in assessing bids.

“Secondary” or “additional” requirements are those which are not related to the subject matter of the contract, and/or cannot be supported by an authority policy, but which you still wish to see delivered. You cannot take these secondary requirements into account in the award of the contract. So you need to make sure that they are not included as a disguised award criterion, or that they are not incorporated into the specifications or that they influence the selection of bidders in any other way.

Despite these constraints, however, you may still introduce them as contract conditions (see section 2.5) provided that they relate to the performance of the contract and you have highlighted this in the contract notice or contract documents. You must also ensure that they are non-discriminatory and deliver value for money.

What you need to get right - Yes’ to six key questions

Procurement law is a complex area and each project needs to be considered on a case-by-case basis. One reason for its complexity is that the more difficult aspects of the law tend to be the most vague, particularly around the issue of social benefit. For example, whilst the primary source of law in the UK, The Public Contracts Regulations 2006, specifically state that social considerations may be included as contract conditions, it is not explicit as to exactly how and at what stage of the procurement process you might do it. In order to address this, you have to look to other sources of law such as the European directive, judgments of the European Court of Justice and domestic courts in EU member states as well as guidance issued by the European Commission and UK purchasing authorities such as the Office of Government Commerce and the Central Procurement Directorate.

This toolkit distils the essence of these sources into key principles, supported by examples of good practice, to help you deliver social benefit outcomes through your purchasing. Whilst the toolkit is not a substitute for specific legal advice, it should enable you to start thinking about how to deliver social benefits. As you will see from what follows, thinking about it at the right time and knowing what questions to ask are the best way to minimise risk whilst still maximizing the social return.

You’ll want to start with these six key questions:

1. Do the social benefit clauses relate to the subject of the contract? You can make community benefits a core aim as long as they are directly relevant to the product or service being procured; can be reflected in the specifications for and conditions of contract; and provide a measurable benefit, either economic or qualitative, to your authority or agency.

2. Can the requirements be clearly spelt out and then evaluated against objectivecriteria?

3. Do the clauses comply with the principles of the EC Treaty, particularly theprinciple of non-discrimination, the EU Public Procurement Directive and thePublic Contracts Regulations 2006?

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4. Are the actions consistent with Government procurement policy on value formoney?

5. Do the powers and existing policy framework of your organisation support thesocial outcomes that you want to achieve?

6. Can you be sure that the requirements would not confer an unrestricted freedomof choice on you as the authority?

While this toolkit provides much of what you need to know about procuring social benefit, we would recommend you seek legal advice before incorporating them into any process. As we have said already, the complex nature of the law in this area means that projects need to be considered on a case-by-case basis. For further details on this please see the web resource based at www.sibni.org.

Next Steps

Following this introduction, Section 2, the main body of the toolkit, explains how social benefit clauses run through the process of procurement as a golden thread; woven in at the outset, before advertising the contract, through all the stages of procurement, and right through the contract delivery stages as their achievement is assessed through well-designed monitoring and management processes.

The case studies in Section 3 demonstrate how other procurers have ensured that social benefits have been a part of the procurement process from start to finish. The focus in the cases studies is on good practice throughout the process. You will probably have come across other examples of major capital projects that have achieved significant social outcomes, but in many cases social benefits are not embedded into the procurement process or the outcomes have been achieved either by bringing in additional money or by co-operation rather than contract. There is much to learn from these examples, and some are highlighted on the website, but if you want to ensure that contractors are required to deliver the social benefits you are seeking without incurring additional costs then you need to follow the golden thread, as in our procurement exemplars. .

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2. The Golden ThreadThe best way to achieve and deliver social benefit is to ensure that they are woven consistently through each stage of procurement. That means thinking about them right at the outset.

Before advertising the contractEven before you advertise the contract you need to ensure that incorporating social benefit has been scrutinised as part of the business case and complies with national and EU procurement law. At this stage you should also investigate what gateway agencies or other sources of support are available in your area to support the delivery of employment and training initiatives. Page 11

First notificationOnce you are confident about what you require and that you have the powers to acquire them you should ensure that the first notification flags up your social requirements to potential bidders so that there are no surprises when they get to the next stage of procurement. From a transparency perspective, this means that there should be no doubt in the minds of potential applicants that this will form part of the process. This ensures that organisations can make an informed decision as to whether or not to involve themselves in the competition. Page 17

The Tender documentsYou have defined what you want - now you need to require the benefits. There are different ways of doing this. Where it is established that the social benefit is a core requirement, you could invite bidders to complete a method statement or table of outcomes where they outline how they will meet your requirements. Alternatively, you could ask a series of open questions and see what bidders come up with. In deciding your approach you will want to take into account the type of bidding competition, the benefits you are looking for and, importantly, how and whether you can evaluate the bid in a fair and transparent manner. Page 24

EvaluationThe bidders must be provided with an outline of how you are approaching the evaluation and scoring – see Section 3 for examples. It is good practice if you can flag this up at OJEU or first notification – but if not, ensure that it is in the first set of contract documents issued. Page 31

ContractCapturing the commitments contractually is one of the key challenges in social benefit implementation. This is likely to be easier if you clearly specified your outcomes at the start of the process. It is also easier, as in some of the examples in this toolkit, if you are letting a PFI or PPP contract where commitments are more easily captured in schedules and appendices to the main contracts. There is an important distinction to be drawn here between a competition undertaken under the open or restricted procedures and one undertaken under the competitive dialogue or negotiated procedure. Page 37

Monitoring and managingThe number one lesson from experience in social benefit delivery has been that contractual or not – unless there are effective monitoring and reporting systems in place the benefits may not be delivered. It is up to you, therefore, to have the right systems and people in place to ensure it happens! Page 43

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2.1 Before advertisingthe contract

2.1 Before advertising the contractThe following section highlights some of the key issues you might want to consider at the beginning of the project, even before advertising the contract. You’ll want to be clear about...

... the social benefits you are seeking

Being clear about the social benefits you are looking for is crucial to getting it right. As you think about the benefits you will need to address the following issues:

Outcome: What can this contract achieve? There is no fixed methodology for developing social outcomes so you can be creative but you need to balance that against:

Costs: What will it cost to deliver – can the contractor reasonably absorb this? Is there additional funding that you can draw on to support the outcomes that you require?

Deliverability: Are the outcomes proportionate to the size of the contract? A £1m package over 30 weeks will not allow for a lot of social benefits but a £100m hospital scheme over 25 years allows broad scope.

Focus: Could the benefits you require jeopardise other key issues like timetable, bidder interest, or value for money?

... relevant national and EC legislation and case law, including:

Government procurement policy on value for money;•The principles of the EC Treaty, including the principle of non-discrimination, •the EU Public Procurement Directive and the Public Contracts Regulations 2006. These principles include for example:

Equal treatment and non-discrimination: • which means contractors from anywhere in the EU can compete on a level playing field regardless of their nationality, locality or whether they have a prior relationship with the contracting authority;Transparency:• making requirements and award criteria clear from the outset;Proportionality:• ensuring that the requirements reflect the needs and scope of the contract;Mutual Recognition:• recognising the qualifications and technical standards of other member States.

For a wider review of legislation see website hosted at www.sibni.org.

If you don’t know what you think you could achieve then have a look at the case studies for some inspiration.

Practitioner

Key tenets of European Law that underpin purchasing are the requirements to treat contractors fairly and in a transparent manner. Good procurers will be mindful of this from the outset. They will ensure the procurement process is designed so as not to discriminate against any potential bidders. And the process will follow a clear set of principles throughout.

Lawyer

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Planning to Procure - Good Practice Box 11

seek help from experts with specialist knowledge of social procurement to help •design appropriate benefits;consult the market about likely requirements before finalising the tender;•provide information and briefing sessions for potential bidders – including •small firms - prior to or early in the procurement process;identify additional resources that can be made available to the contractor – •ideally through the contract - to cover extra costs associated with the social requirements;provide facilitation – either directly or through partner agencies – to help the •contractors deliver the social requirements;make sure that all parts of the purchasing organisation are trained to implement •and monitor the social requirements where appropriate.

1. Anthony Collins Solicitors and Richard McFarlane (2006). The Scope for Using Clauses in UK Public Procurement to Benefit the UK Manufacturing Sector.

Planning to Procure - Illustration 1

Key principles guiding the choice and priority for the KPIs to be included in the Infirmary Waterside development for Blackburn with Darwen (with Elevate):

The number of KPIs should not be excessive;•The KPIs should be simple and straightforward;•The KPIs should be approved by all partners;•The measurement of the KPIs should be reliable and transparent;•The KPI targets should be realistic and achievable;•Partners should not be measured on issues outside their control. (Other •indicators evaluating the impact of housing market renewal are recorded elsewhere).

... that your organisation’s powers and policies entitle you to seek those benefits

You must make an assessment of whether your organisation’s powers and policies support procurement that incorporates social issues. This avoids potential arbitrariness that would not be compatible with the requirements for propriety and regularity.

Government-wide policies can be used to support action (e.g. sustainable development) as well as more localised policies (e.g. local authority Community Strategies and Procurement Strategies). For example, a local authority in England has the express power to do anything it considers likely to achieve the economic, social and/or environmental well-being of its area or any locality or person within its area, except those things that it is prohibited from doing as a result of other legislation (Section 2 of the Local Government Act 2000).

In Northern Ireland, a similar “well-being” duty to that conferred upon local authorities in England has already been introduced in respect of local Health and Social Care trusts which enables them to exercise their “functions with the aim of improving the health and social well-being of, and reducing health inequalities between, those for whom it provides, or may provide, health and social care”1.

However, at this time, no comparative duty of “well-being” currently exists in respect of for example, district councils, although we understand that there are plans under the Review of Public Administration (“RPA”), to give bodies such as these a new statutory power of “well-being” to assist them in the delivery of community planning. This new power may “allow councils to take any action that is not already the responsibility of another agency, linked with the community plan, to improve the well-being of the local community or local area”2. District councils must also ensure that any action taken to promote social benefits through procurement supports its duty to promote “best value”3.

1 Section 21 of the Health and Social Care Reform Act (Northern Ireland) 20092 as set out in a Ministerial Statement made by Arlene Foster (Minister for the Environment) dated 31/03/2008 http://www.niassembly.gov.uk/record/reports2007/80331.htm, however, we understand that such a power may not be introduced until May 2011 under the Local Government (Reorganisation) Bill.3 as set out in the Local Government (Best Value) Act (Northern Ireland) 2002

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To be sure about whether your organisation is in a position to seek social benefits you should consider the following:

does your organisation have the necessary powers to seek social benefits? •are there any circumstances in which your organisation is prevented from using •those powers for this purpose?are there any legislative conditions that you need to be aware of in exercising •those powers to seek social benefits?has your organisation taken into account all the matters it should take into •account (the ‘Wednesbury’ principle4)?

If in doubt seek legal advice.

...that the business case includes an assessment of the social benefits

Do you have a clear understanding of the social benefits as part of the business case? Have you assessed the costs, if any, and benefits associated with your social requirements in accordance with DFP Green Book Guidance? As there is no universally accepted model for quantifying social benefits you will have to assess their impact as part of the assessment of non-monetary factors and determine a priority weighting relative to other project objectives.

... the outcomes are clear, realistic and measurable

The specification needs to contain clearly defined benefits or outcomes that are proportionate to the length, value and complexity of the contract. Clearly specified benefits ensure that contractors know what you are seeking and you are able to evaluate their offer in a clear and consistent manner. It also means that you can more easily measure and monitor whether contractors deliver your requirements. Illustration 1 outlines the principles that guided the choice of KPIs for a regeneration project in Blackburn with Darwen. You may also want to consider:

the best way to measure the benefit requirements – for both target setting and •monitoring;how you will manage monitoring information and who will chase progress on •social requirements;whether any help will be available to contractors in delivering the social benefits •e.g. access to grants, links to labour agencies or other sources of support.

... you’ve made links with relevant gateway agencies

A gateway agency is a public sector or social enterprise organisation that has been set up to support local people to access employment and training. There are national agencies like Connexions and Job Centre Plus but there will also be local agencies set up specifically to work in targetted areas or with specific client groups. You may wish to involve them early on to support you to develop targets and also later as a delivery partner for the project.

In the Islington BSF project the Local Authority offered the in-house team, Islington Working, to identify candidates for apprenticeships. In Raploch a number of national and local agencies were nominated. This ensures a cost neutral approach – the agency already exists, the scheme creates an opportunity for them, the contractor has access to a targeted resource.

4 This is the standard of unreasonableness used in assessing applications for judicial review of a public authority’s decision. A reasoning or decision is Wednesbury unreasonable if it “is so unreasable that no reasonable authority could ever have come to it”. The test is a different (and stricter)test than merely showing that the decision was unreasonable. The principle is derived from the case Associated Provincial Picture Houses Ltd v Wednesbury Corporation ((1947) 2 AII ER 680)

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2.2 First notification:

Prior Information Notices, OJEUs, and meeting the market place

2.2 First notification: Prior Information Notices, OJEUs, and meeting the market place

Once you have clarified the benefits you are seeking and whether they comply with relevant legislation and practice you will be ready to let potential bidders know that a competition is about to start. This is the first formal stage of the procurement process. You might do this through a Prior Information Notice (PIN) or through the contract notice itself. If the contract exceeds the relevant financial thresholds established by the Public Contracts Regulations 2006 and provided the contract is not, for example, excluded from the coverage of the Regulations, then a notice will have to be published in the Official Journal of the European Union. If not, it will most likely be published at national and possibly international level depending on the nature of the contract.

Four award procedures are provided for in the Regulations: the open procedure, under which all those interested may respond to the •advertisement in the OJEU by tendering for the contract; the restricted procedure, under which a selection is made of those who respond •to the advertisement and only they are invited to submit a tender for the contract. This allows purchasers to avoid having to deal with an overwhelmingly large number of tenders; the competitive dialogue procedure, following an OJEU Contract Notice and a •selection process, the authority then enters into dialogue with potential bidders, to develop one or more suitable solutions for its requirements and on which chosen bidders will be invited to tender; and the negotiated procedure, under which a purchaser may select one or more •potential bidders with whom to negotiate the terms of the contract. An advertisement in the OJEU is usually required but, in certain circumstances described in the Regulations, the contract does not have to be advertised in the OJEU. An example is when, for technical or artistic reasons or because of the protection of exclusive rights, the contract can only be carried out by a particular bidder.

Public authorities can choose between the open and restricted procedures. The competitive dialogue procedure is available where the contract cannot be awarded under open or restricted procedures and where it can be properly considered “complex”. The negotiated procedure may be used only in the very limited circumstances described in the 2006 Regulations.

In open and restricted procedures you are not allowed to negotiate with candidates or tenderers on fundamental aspects of contracts, variations which are likely to distort competition, or prices. You may only have a discussion with candidates or tenderers to clarify or supplement the content of their tenders or the requirements of the contracting authorities, and provided this does not involve discrimination. Clearly this may have an impact on bidders’ abilities to offer innovative approaches to elements of the contract such as social benefit, although arguably, it may also encourage you to be clearer and more definitive about your social requirements rather than leaving it open to bidders’ suggestions. In contrast, the flexibility afforded by both the competitive dialogue and negotiated procedures should enable you to explore alternative and/or innovative approaches with bidders and ultimately give credit for innovation and offerings over and above the core requirement.

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Sample OJEUs are included on pages 20 and 21. Procurers have taken different approaches but in the most part they have highlighted to the market place that this is what they want so there should be no surprises when they get to the next stages of procurement.

Often the wording will take a form such as this:“Under this contract the contractors and their supply chains will be required to actively participate in the achievement of social and/or environmental policy objects relating to recruitment and training and supply chain initiatives. Accordingly, contract performance conditions may relate to social and environmental considerations.” Not only do you afford yourself the best opportunity to obtain the social benefits you hope for by highlighting your expectations at the outset, it is arguable that you are obliged to do so, in order to meet transparency obligations, whether the requirements are ‘core’ or ‘secondary’. Flagging the benefit up front means that organisations can make informed decision as to whether or not to take part in the competition. You do need to take care about the wording though. Using terms such as ‘local’ with regard to labour or sub-contractors could be seen as discriminatory and hence unalwful.

Meeting the marketplace

Informing the marketplace about your plans should be part of an ongoing dialogue with contractors about pipeline work. When you are ready to go to market you might consider organising an open day to run through the tender requirements and explain the possible types of social benefits that you are looking for. This can really highlight the value you place on social benefits to bidders and keep it top of the agenda.

Raploch URC invited bidders to a presentation that provided details on the history behind community benefit clauses, what Raploch URC’s expectations were and how they proposed to help bidders deliver the requirements. The presentation also highlighted the benefits of these requirements to bidders (e.g. addressing skills shortages). The presentation was an opportunity for Raploch URC to demonstrate to bidders the importance of these aspects of the bid.

For further details see case studies in Section 3.

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OJEU - Illustration 1

OJEU notice for procurement of the new Crossrail tunnels in central London, 25th August, 2009

CRL embraces diversity and welcomes applications from all suitably skilled suppliers of all sizes who can meet the requirements, regardless of gender, ethnicity, sexual orientation, faith, disability or age of supplier workforce and/or ownership. CRL will actively promote green procurement throughout its supply chain and welcomes applications from suppliers committed to the principles of reducing, reusing and recycling resources and to the practices of buying recycled. CRL strongly supports and implements the Greater London Authority (GLA) Responsible Procurement Policy, details of which may be found at: http://www.london.gov.uk/rp/policy/.

Further details as to the application of Responsible Procurement to this procurement may be set out in the prequalification and tender documents.

OJEU - Illustration 2

Newcastle upon Tyne City Council240217-2006 Waygood Gallery and StudiosVI.3) ADDITIONAL INFORMATION:

Under this procurement, the successful applicant is required to participate actively in the economic and social regeneration of the locality of, and surroundings of, the place of delivery for the procurement. Contract performance conditions may therefore relate in particular to social and environmental considerations.

Sample OJEU contract notices outlining social benefits

You must make an assessment of whether your organisation’s powers and policies support procurement that incorporates social issues. This avoids potential arbitrariness that would not be compatible with the requirements for propriety and regularity.

The sample clauses that follow illustrate the different ways to alert potential tenderers of the importance and relevance of social requirements. There are a number of common themes in these paragraphs, not least that in each case the procurer appears to have reserved their right to integrate such conditions into the process at a later date. It is interesting to note that none of the examples are absolutely explicit as to when and how this integration will take place. However, as long as they have reserved this right and provided clarity at the appropriate time then this should be permissible. That said, if you know what you want from the outset, there is nothing to stop you from making that clear at the beginning.

Of all the examples, this is the most explicit. Approaching it in this manner should ensure that there is no doubt in the minds of potential applicants as to how important such issues are to the Authority.

Lawyer

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OJEU - Illustration 4

OJEU notice for procurement of construction works for the London Borough of Haringey’s housing stock, 13 October 2009.

Under this procurement, the contractor is required to actively participate in the economic and social regeneration of the environment local to the sites of the works. Accordingly, contract performance may relate to social and community considerations.

OJEU - Illustration 3

Raven Housing Trust Limited, Previously Reigate And Banstead238162-2007 construction work III.1.4) Other particular conditions to which the performance of the contract is subject:Yes.

Under this contract the contractor, consultant and/or their supply chain will be required to actively participate in the achievement of social and/or environmental policy objectives relating to recruitment, training and supply chain initiatives.

Further details as to the application of Responsible Procurement to this procurement may be set out in the prequalification and tender documents.

OJEU - Illustration 5

Network Housing Group221692-2006London: building construction workIII.1.4) Other particular conditions to which the performance of the contract is subject:Yes.

Under this contract the contractors and their supply chains will be required to actively participate in the achievement of social and/or environmental policy objectives relating to recruitment and training and supply chain initiatives. Accordingly contract performance conditions may relate in particular to social and environmental considerations.

OJEU - Illustration 6

Building Schools for the Future (BSF) National Academies Framework 244033 2009 London: PFS Contractors FrameworkIII.1.4) Other particular conditions to which the performance of the contract is subject:Yes.

Under this contract the contractors will be required to actively participate in the achievement of social and/or environmental policy objectives relating to recruitment and training and supply chain initiatives. Accordingly contract performance conditions may relate in particular to social and environmental considerations.

2.3 Tender Documents

Pre Qualification Questionnaire, Invitation to Negotiate, Invitation to Tender

2.3 Tender DocumentsPre Qualification, Invitation to Negotiate, Invitation to Tender

There are different approaches to specifying your social requirements, but however you frame them they need to be unambiguous both so that contractors can bid on a level playing field and so that responses can be easily evaluated. This helps ensure that the process of assessing the preferred supplier is transparent. Once you have drawn up your specification how you proceed will be determined by the procurement process to be undertaken.

2.3.1 Where you have an existing framework

The NI public sector operates a number of framework agreements or contracts for different types of goods and services which typically provide a supplier list through which to operate secondary competitions. If you have an existing framework which was established prior to the decision to integrate social benefit into your purchasing then it may be difficult to do so at a later stage. In such circumstances care must be taken and it is recommended that specialist legal advice is sought.

2.3.2 Pre Qualification stage

If you do not have a framework in place you will follow the usual tender procedures, usually starting with a PQQ. The purpose of the PQQ is to establish if the bidders meet your minimum criteria – usually turnover and experience. However, the PQQ also provides an opportunity for you to establish whether the bidders have the capacity and experience to deliver social benefits (provided, of course, that the information requested is relevant and proportionate to the contract). Only those companies who can demonstrate the necessary experience and capacity will be invited to tender.

At this stage you can ask broad questions similar to others in your PQQ. These questions test the knowledge, capacity and experience of the bidders to deliver the social benefits that you think are achievable. Once again, it is important to ensure that there are fair and transparent mechanisms for assessing such responses and therefore, ultimately, in making a decision as to which bidders should be invited to tender. For example, authorities might ask for evidence of:

compliance with equality legislation;•experience of meeting the diverse needs of different service users and engaging •with its local community;managing, motivating or training the workforce.•

See PQQ illustrations 1 to 3 on the next page.

To get inspiration for subject matter have a look at pages 33 / 34 (Centre spread). To review different ways of achieving your goals have a look at page 38.

Practitioner

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PQQ - Illustration 1

Elevate East Lancashire – Housing Market Renewal Pre-Qualification QuestionnaireEstablishment of a Framework Agreement for Group Repair and Facelift

Do you offer a full skills & training programme to all of your employees? If yes, please provide details of your organisation’s programme including how you identify training needs and evaluate the effectiveness of training given.

Please identify your firm’s approach to developing apprenticeships. How many apprentices are enrolled each year by your organisation and in which trade disciplines? Do you also work with your suppliers/subcontractors to establish, maintain or increase the use of apprenticeships?

Should you be successful, as an employer what steps would be taken in encouraging employment of labour within your workforce drawn from the local community or local supply chain partners (please provide examples)?

PQQ - Illustration 2

Building Schools for the Future (BSF) National Academies Framework 2 – PQQ June 2009

5 (p) Please describe how you have embedded key skills into the local community? [Your response should be limited to no more than two sides].5 (o) Please describe your experience of accounting for full and fair opportunity for local suppliers and workforces over a portfolio of projects. [Your response should be limited to no more than two sides].

Both questions are scored at 5% under Experience/ Technical Evaluation Matrix

PQQ - Illustration 3

Building Schools for the Future (BSF) Southampton – PQQ October 2009

B 1.9 Please define your approach to supporting the Council’s corporate strategic priorities of up-skilling the local workforce, creating local employment opportunities, providing apprenticeships and other training opportunities, and promoting engagement between schools and businesses.

2.3.3 Moving on to Invitation to Tender/ Commencement of Dialogue/Invitation to Negotiate

Asking the right questions

How you specify the social benefits will depend on whether you use a series of open questions, closed questions or a mix of both.

Open questions

Using open questions means you broadly outline your expectations and hope that the competitive process pushes bidders to offer a strong range of benefits in order to achieve a high score. This was the case in the Building Schools for the Future project where thousands of training interventions were secured, along with 100 apprentices. As the Islington BSF bid was a PFI/ PPP conducted under Competitive Dialogue the London Borough of Islington had more flexibility to ask a broad question and use its dialogue with the private sector to tie down very clear outcomes.

Indeed, the competitive dialogue procedure is structured in a way which encourages discussion and debate around the form of solution being offered by each bidder. For example, Regulation 18(20) specifically states that the contracting authority ‘shall open a... dialogue the aim of which shall be to identify and define the means best suited to satisfying its needs’ and furthermore in Regulation 18(21) confirmation is provided that during this dialogue, the contracting authority ‘may discuss all aspects of the contract with the participants selected’. Clearly this should be wide enough to cover social benefit. This flexibility can be contrasted with the very rigid rules which regulate competitions undertaken using the open and restricted procedures.

Of course, there is not always a Competitive Dialogue process and open questions do not always deliver the kind of benefits you might hope for. For example, you may get generic responses that mean nothing - “We fully support the Authority’s training agenda and will ensure that we will work with you to deliver a range of targeted training outcomes” - and you will need to give further guidance. It can also make it harder to evaluate what is offered. If you wish to use an open question you can guard against these problems by coming up with a very clear evaluation framework before going to market. The above bidder should achieve 0. You can see some sample evaluation matrices in Section 3.4.

Meaningless; unmeasurable unless it is broken down.

Practitioner

ITN l Open question - Illustration 1

Building Schools for the Future (BSF) National Academies Framework 2 – ITN August 2009

Regional /Local Delivery15. Bidders are required to demonstrate how they would construct and operate their supply chain(s) in order to respond to matters in the area of the specific Scheme, evidenced by specific examples. This should include as a minimum:15.1 Employment opportunities in the relevant area.15.4 Education / training / apprenticeship opportunities within the supply chain established in the relevant area

Both questions are scored at 5% under Experience/ Technical Evaluation Matrix

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ITN l Open question – Illustration 2

Lambeth BSF IPD1LEP Partnering Services (10%) Sub criteria weighting

Bidders are to outline their approach for contributing to Lambeth’s economic objectives around local labour, apprenticeships, employment and training.

Tender Specification - Illustration 1

ILEX Urban Regeneration Company (URC)

To allow Ilex to meet their obligation regarding community responsibilities it is a requirement that the Main Contractor:

recruits one long-term unemployed person, either directly or through the •supply chain, for each £1m of project value; recruits one apprentice directly or through the supply chain, for each £2m of •project value; reports on the recycled/reuse content achieved using suitable standard industry •tools;ensures that at least 10% of the material value of the project be derived from •recycled/reuse;registers projects with the Considerate Constructors Scheme. •

ITN l Closed question l - Illustration 1

Raploch Housing Renewal

Community Benefit Method Statement

1. Training1.1 Describe the steps that will be taken to ensure that employed status new entrant trainees will comprise either a minimum of 10% of the person-weeks required to deliver the works or a minimum of 157 (no.) whichever is the greater, and that wherever possible such new entrant trainees will be recruited from Employment Connections, EmployAbility Stirling or another agency named by Landholdings.

1.2 Please complete the Tables below in relation to the whole development and then the next two 12 month periods.

Total person-weeks to be delivered by new entrant apprenticeships, employed operatives and non-employed trainees (excluding work placements)

NotesP/wks – A person-week is the equivalent of one person working for 5 days either on site, or through a mix of on-site work and off-site training. The total person-weeks utilised on the contract to include time provided by management and professional staff, trades and operative staff, and ancillary staff.No. – enter here the number of individuals that you anticipate using for each occupation and category.

A new entrant trainee is a person that is leaving an educational establishment (e.g. school, college or university) or leaving a training provider, or a non-employed person that is seeking employment that includes on-site training and assessment or offsite training, or a mix of these.

An Apprentice is a person registered as an apprentice with an industry recognised body. Each apprentice can be counted as a new entrant trainee for up to 104 weeks.

Occupation LabourRequirement

Person-weeks delivered by New Entrant Trainees

Total forContract

Apprentices Employed operatives

Non-employed Trainees

Total No. % of total

P/wks No P/wks No P/wks No P/wks No P/wks No

Trades Apprenticeship for Young People and Adults

Employed Operatives Semi-skilled and Unskilled Employees

Total in Employment

Non-employed Trainees all Levels and Occupations

Total in Employment and Training

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2.4 Evaluation

2.4 Evaluation

In general, evaluating bids with a social procurement element is no different from evaluating ‘normal’ bids. The Public Contracts Regulations 2006 (Reg 30(1)) require that a contracting authority award a contract on the basis of either lowest price or most economically advantageous. In most cases public contracts will be awarded to the tenderer that offers the most economically advantageous tender (sometimes referred to as “MEAT”). In this context, MEAT can cover a multitude of criteria provided that criteria are ‘limited to the subject matter of the contract’. This limitation is of course extremely relevant in the context of social benefit and is discussed at various points in this guide. More generally, Regulation 30 (2) confirms that the following are examples of what might be taken into consideration when determining the most economically advantageous: quality, price, technical merit, aesthetic and functional characteristics, environmental characteristics, running costs, cost effectiveness, after sales service, technical assistance, delivery date and delivery period and period of completion.

If the social benefits are directly relevant to the subject of the contract (as is required by Regulation 30(2) – discussed above) they may form part of the evaluation. If they are not directly relevant, “additional” social award criteria may be used to determine between “equal bids” i.e. where there are two or more bids precisely equal on value for money (most economically advantageous tender) grounds provided that this was indicated in the contract notice/document. However it is extremely rare for bids to be equal on value for money grounds therefore it is strongly advised that legal advice is taken before using such criteria. In all circumstances, these criteria should be shared with bidders (including their respective weighting).

The Scoring Framework

You will need to provide bidders with an outline of how you will approach the evaluation and scoring in the tender documentation. The criteria should include a scoring framework which contains a list of the expected social benefits, probably grouped by subject. Each benefit should be allocated a weighting and then a scoring scale agreed which identifies the marks against which responses to tender questions will be assessed.

Asking good quality questions and providing a method statement at tender stage makes the evaluation process a lot more straightforward. You will then be in a position to evaluate each bid’s social benefits against the agreed criteria and allocate a score. The scores for the social benefit requirements should be combined with scores for other quality criteria to produce a total quality score for each tender.

Allowing the bidder the scope to add their own targets can be very valuable although, in light of recent case law, it would be advisable to make it clear whether credit is given to bidders who exceed the authority’s requirements and, if so, how. Some bidders may have key skills in areas that are too niche to require from the general markets such as sustainability/waste management training or working with a particular client group.

In Raploch they set up five panels to evaluate different aspects of the bid, one focusing on Community Benefits. The latter consisted of the principal public sector bodies with an interest in regeneration (including social housing, training, and health) plus Stirling Council, the URC’s Community Benefits development manager (who chaired the panel) and a representative from the local community.

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Evaluation Matrix - Illustration 2

First Wessex Housing Group

281473 – 2009 Redevelopment of North Town Aldershot

IV.2.1) Award criteria:The most economically advantageous tender in terms of the criteria stated below:

Cost weighting:50%

Experience: Relevant experience / CDM, Health and Safety, knowledge of RSL/HCA issues

weighting:10%

Experience: Open market sale and private development weighting:20%

Environmental: Innovation/Environmentally aware construction meth-ods, ecological awareness

weighting: 5%

Resources: Resources and training initatives. weighting: 5%

Employment: Employment initiatives for local people weighting: 5%

Risk: Risk management/tenant care, consultation and resident liaison experience

weighting: 5%

Each section of the Method Statement was given a score out of 100 and each question within each section was allocated a score. The highest community benefit weighting was given to the information relating to training and targeted recruitment. The community benefit scores were weighted as 10% of the overall scores. An average of each member’s score for the community benefit elements was calculated and then combined with the scores for other elements of the bid from the other panels.

This is a very transparent and engaging way to establish the evaluation score and is highlighted in Section 3 as an exemplar.

Evaluation Matrix - Illustration 1Weightings allocated to different elements of Raploch Community Benefit Statements

Community Benefit – 10%

Targeted Recruitment and Training – 6% (100%)

Table 1 – 35%

Table 2 – 5%

Question 1 – 15%

Question 2 – 9%

Question 3 – 9%

Question 4 – 6%

Question 5 – 3%

Question 6 – 9%

Question 7 – 9%

SME and SE Development – 4% (100%)

Question 1 – 10%

Question 2 – 30%

Question 3 – 30%

Question 4 – 20%

Question 5 – 10%

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The following tables set out the evaluation criteria to assess training and employment related social benefits in the Belfast Education and Belfast Libraries School Rebuild programme. Because social benefit requirements were not specified in the OJEU notice the evaluation criteria could only be used in the event of a tie break between contractors on their economically advantageous assessment.

Evaluation Matrix - Illustration 3Belfast Education and Belfast Libraries School Rebuild programme

Area Weight (%)

Evaluation Criteria – Score Guide

Creation of Jobs 20

Stated number of job opportunities that will be provided

4 Significant increase: 7-10Some increase: 4-6None stated or small increase: 0-3

Guarantees or other clear statement that these jobs will be created and an indication or commitment to the minimum duration of these jobs

4 Firm commitment given: 7-10Some commitment given: 4-6No stated commitment: 0-3

Little or no obligations placed on BELB in order for the bidder to meet these job creation targets

8 No qualifications: 10Few qualifications: 6-9A major qualification: 4-5More than one major qualification or no reference to obligations: 0-3

Clear explanation provided on how the jobs will be created and sustained as evidenced in the Continuous Improvement Plan

2 Detailed examination of proposal: 8-10Some explanation provided: 5-8Little explanation provided: 3-4No or very limited information provided: 0-2

Other evidence provided and referenced to the achievement of the above four items in the overall bid

2 Detailed referenced provided: 8-10Some explanation provided: 5-8Few references provided: 3-4No or very limited information provided: 0-2

Area Weight (%)

Evaluation Criteria – Score Guide

Creation of Apprenticeships 20

Stated number of apprenticeships that will be provided

4 Significant increase: 7-10Some increase: 4-6None stated or small increase: 0-3

Guarantees or other clear statement that these apprenticeships will be created and an indication or commitment to the future career opportunities that arise from these apprenticeships

4 Firm commitment given: 7-10Some commitment given: 4-6No stated commitment: 0-3

Little or no obligations placed on BELB in order for the bidder to meet these apprenticeship targets

8 No qualifications: 10Few qualifications: 6-9A major qualification: 4-5More than one major qualification or no reference to obligations: 0-3

Clear explanation provided on how these apprenticeships will be sustained as evidenced in the Continuous Improvement Plan

2 Detailed examination of proposal: 8-10Some explanation provided: 5-8Little explanation provided: 3-4No or very limited information provided: 0-2

Other evidence provided and referenced to the achievement of the above four items in the overall bid

2 Detailed referenced provided: 8-10Some explanation provided: 5-8Few references provided: 3-4No or very limited information provided: 0-2

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Providing opportunities for NEETS - young people Not in Employment Training Education

outcomes ideas outcomes ideas outcomes ideas outcomes

Providing opportunities for target groups – NEETS, BME groups, excluded groups, hard to reach groups, former gang members, return to work candidates, ex offenders

Provide guaranteed interviews for target groups – e.g. long term unemployed, school pupils, returning to work adults

Provide opportunities for social enterprises to become part of the supply chain

In Islington BSF Schools the Design and Build contractor is contracted to engage nearly 100 apprentices over the five year programme

In Sheffield the Housing ALMO is on target, over 7 years, to deliver an expected total output of 1500 local jobs/ training places

GM Procure has a target of 52 weeks employment for a new trainee for each £1m in contract labour cost on Decent Homes standard framework contracts, and is on target to achieve this in the second year of contract delivery – equivalent to about 10% of the total labour requirement

At Kings Cross Central, a twelve-year mixed commercial and residential development, the developer has accepted a Planning Agreement requirement that 7.5% of the total construction labour requirement will be delivered by new trainees recruited from a named source

Provide measurable improvements of upskilling in workforce

Provide placements for university students

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outcomes ideas outcomes ideas outcomes ideas outcomes

A study of five construction projects in north east England that used contractual leverage identified an average of one new trainee per £750,000 on construction spend

Sources: Anthony Collins Solicitors and McFarlane, 2008 – ToolkitAmion Consulting for the National Employment PanelShine Consulting

Provide opportunities for SME’s to become part of the supply chain

Provide work experience for target groups

Run workshops for target groups on key areas of skill – Sustainability, design etc

On education projects: Provide input to curriculum development through supporting learning in key topic areas

Achieve high scores on Considerate Contractor Scheme

In the early 1990’s at Waltham Forest Housing Action Trust 20% of the person-weeks required to deliver newbuild social housing was being delivered by new trainees recruited from the Estate where the works were being carried out

Between May 2008 and June 2009 the Olympic Delivery Authority filled over 500 jobs by linking a local brokerage with ODA Contractors. The brokerage gives local people 48 hours to access jobs before they are advertised more widely

In East London Rail Project nearly one third of the suppliers to the main JV contractor are local SME’s from target areas

Uptake of apprenticeships

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2.5 Contract

2.5 ContractCapturing what you have agreed contractually

Core requirementsThe contract stage is your chance to include training and recruitment requirements, equal opportunity targets, and social enterprise benefits, as well as to clarify monitoring and reporting procedures, KPIs, outcome management and costs, provided you have followed the advice so far! To do this the social requirements need to form part of the contract conditions so that you have the legal power to ensure they are delivered. Social clauses can be included as core requirements if they are relevant to the subject matter of the contract, otherwise they may be included as secondary requirements if they relate to the performance of the contract (see Section 1 for a reminder about core versus secondary requirements).

How is it done?

At this stage, if you have followed the Golden Thread, capturing the commitments in contractual terms should be relatively straightforward. If you went through a fixed tender process then, hopefully, you will have clearly specified your social outputs when you went out to tender. If you utilised a negotiated contract procedure the bidder will have responded to the key questions and developed their offer during the tender stage. You can then incorporate the method statement (see Raploch Case Study), schedule (see Islington BSF p.40) or defined outputs that were presented by the bidder into the contract.

Are the benefits quantifiable and measurable?

Hopefully, the outputs are quantifiable. Your contract must clearly state the outcome that you require in a measurable and defined format. If you cannot quantify an output then you should avoid trying to use the clause. For example, contractually requiring a contractor to, “respect the working and living environment of the local people while undertaking the works” will not achieve a measurable outcome. Requiring the contractor to, “achieve a score of 25 or more on the Considerate Contractor Scheme” will ensure that the contractor resources this and that you have something to monitor.

Illustration 2 (Contract Clauses p.40) lists the social benefit clauses for the London Borough of Islington’s Building Schools for the Future programme. You can see that they are clearly spelled out and include both a quantifiable target, such as 15 experienced workers to gain an NVQ 3 per year, and a timeframe for the output’s completion or duration. This makes the targets simple to monitor. Compare them with some of the clauses highlighted in the Ilex tender that the practitioner pointed out as difficult to monitor, such as “provide opportunities for all employees to develop essential skills through, for example, the promotion of the DEL Essentials Skills Programme.”

Many employment and training targets are framed in terms of ‘person-weeks of work’ rather than jobs or qualifications, as in the case of the Glasgow Housing Association KPIs (see Section 3). These kinds of targets make sense because many on-site construction jobs are for short periods of time. This makes it difficult to work out who is an existing employee transferred to the site from another site as opposed to workers who have been recruited to the site directly, especially by sub-contractors.

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Good Practice Box 2: Methods for quantifying targets1

a percentage of the total labour time required to deliver the contract;•a specified number of beneficiaries (for example, employees, trainees, work •placements, additional suppliers);a specified number of weeks of engagement in the contract for beneficiaries;•all opportunities to be made available to named agencies;•a specified number of beneficiary-weeks per a specified amount in contract •value;a specified number of beneficiary-weeks per unit of housing or square metre •of commercial floor space.

1 Anthony Collins Solicitors and McFarlane (2008) Can Do Toolkit; targeted recruitment and training for social landlords.

Do they fit the nature of the project?

Targets also need to fit the nature of the project. For example, Elevate dropped the requirement for apprenticeships in local authority refurbishing and repair contracts because the programme of work was not sufficiently consistent. Before this change, apprentices were being recruited and then let go and then re-recruited as contractors secured short-term contracts.

Good Practice Box 2 contains some simple approaches to quantifying targets. They provide a useful benchmark for the kind of targets that you may want to aim for. The Sample contract clauses for training and employment opportunities from the CAN DO Toolkit (ACS and McFarlane, 2008) also provide some helpful guidance (see Good Practice Box 3).

Secondary Requirements as Contract Conditions

As discussed in Section 2.2 above, you may introduce secondary requirements as contract conditions provided that they relate to the performance of the contract and are “able to be met by whoever wins the tender, from the time at which the contract starts”. You also need to avoid asking for evidence of compliance with such conditions at selection or award stage although suppliers must accept the condition in order to be awarded the contract (OGC note on Social Issues in Purchasing 2006).

The contract conditions should not be disguised technical specifications or award criteria. Where particular skills or qualifications are needed for a contract, these should be considered at the selection stage and/or in the award criteria provided that they form “core requirements”. For example, if you wished to promote additional training that is not essential to the contract, this should then generally be done on a voluntary basis once the contract has been awarded rather than as a formal condition (OGC note on Social Issues in Purchasing 2006).

You need to advise potential bidders of any such conditions in advance in the contract notice or the contract documents in order to comply with transparency regulations (Regulation 39 of the Public Contracts Regulations 2006). You also need to comply with EC Treaty principles, particularly that of non-discrimination. For example, conditions that require changes to the organisation, structure or policy of a supplier established in another member state might be considered discriminatory (OGC note “Buy and Make a Difference” 2008).

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Contract Clauses - Illustration 1

ILEX Urban Regeneration Company (URC)

To allow Ilex to meet their obligation regarding community responsibilities it is a requirement that the Main Contractor:

recruits one long-term unemployed person, either directly or through the •supply chain, for each £1m of project value; recruits one apprentice directly or through the supply chain, for each £2m of •project value; reports on the recycled/reuse content achieved using suitable standard industry •tools;ensures that least 10% of the material value of the project be derived from •recycled/reuse;registers projects with the Considerate Constructors Scheme; •complies with the application of fair employment, equality of treatment and •anti-discrimination legislation;uses their best endeavours to ensure that in their employment policies and •practices and in the delivery of the services required under the contract they have due regard to the need to promote equality of treatment and opportunity;complies with the requirements of the ‘Respect for People (RfP) – Code of •Good Working Health and Safety Practices’ incorporating the Code of Practice for Industrial Relations and Health and Safety’. Compliance with this Code will include payment of operatives in accordance with the Working Rule Agreements;their supply chain provide and maintain corporate Fair Trade policies;•embraces procurement of Fair Trade goods and services within construction •projects in accordance with CPD Procurement Guidance note 02/06;provides opportunities for all employees to develop essential skills through, for •example, the promotion of the DEL Essentials Skills Programme;co-operates with other Government departments in discharging their statutory •duty to act in a manner which they consider best contributes to sustainable development. This includes:-

taking account of any DOE strategy or guidance on sustainable •development; compliance with the ‘Policy Framework for Construction Procurement’ •incorporating the ‘Achieving Excellence in Construction’ initiative, the Government Constructions Clients Group – Sustainability Action Plan and all guidance produced by the Procurement Practitioners Group – Sustainable Construction Task Group;

fully participating with other project stakeholders in design review process and •workshops (e.g. Design Quality Indicator workshops) which seek to establish and enhance design quality;complying with ‘Equality of Opportunity and Sustainable Development •Guidance paper’ published by CPD and the equality commission for Northern Ireland.

These are very hard to monitor.

Practitioner

These are the easiest to monitor.

Practitioner

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Contract Clauses - Illustration 2

Achieve the following training and employment opportunities in partnership with LBI’s Construction Works Project (Local Authority Regeneration Department)

Responsibility KPI Duration

ConstructionPartner

50 unskilled workers ac-cessing construction skills training per year – 50% of whom will be either Islington residents or from adjoining boroughs and from an unemployed background

Annually until the completion of Phase 3

28 learners moving into apprenticeships will be provided for phase 1 schools managed by LBI Construc-tion works Project.

By the completion of Phase 3

15 experienced workers to gain an NVQ 3 per year

Annually until the completion of Phase 3

600 unskilled workers to have access to construction skills training over the life of the project

Over the life of the project. (Indicative target of 120 per year over 5yrs)

500 up skilled workers gain-ing a qualification over the life of the project

Over the life of the project. (Indicative target of 100 per year over 5yrs)

Building services partner

20 trade apprentices over the three phases of the project

By the completion of Phase 3

Facilities manage-ment 5 work place-ments per year and 12 apprenticeships over the life of the contract which will comprise of:-

For school pupils work ex-perience / curriculum enrich-ment, 3 placements per year for two weeks unpaid.

Over the life of the contract

For university/ college stu-dents or 6th formers 2 paid placements per year for 6 to 8 weeks duration.

Over the life of the contract

12 business administration apprenticeship or technical apprenticeships over the duration of the contract.

Over the life of the contract

ICT partner 1, 1 week student work placement p.a within the ICT managed service

Over the life of the contract

Few words, clear requirements, and deadlines

Practitioner

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Good Practice Box 3: Sample contract clauses for training and employment opportunities from CAN DO Tool Kit

2.1 The Contractor shall actively participate in the potential for economic and social regeneration which results from a Project Specific Contract and shall deliver the requirements set out in the Contractor’s Targeted Recruitment and Training Method Statement at Schedule [ ] to this Agreement.

2.2 The Targeted Recruitment and Training Method Statement may be modified at any time by mutual agreement between the parties.

2.3 The Targeted Recruitment and Training Method Statement shall include the following outcomes:

2.3.1 A minimum of 78 person-weeks of employment to be provided for a new entrant trainee recruited from a source agreed by the Client, for each £1m in contract value provided:

2.3.1.1 Where employment occurs on site further than five miles from the development site, transport to alternative sites shall be provided;

2.3.1.2 Apprentices may be counted for up to 104 weeks of employment;

2.3.1.3 New Entrants and Other Trainees may be counted for up to 52 weeks of employment.

2.4 RecruitmentEvery vacancy on site, including those with subcontractors, is to be notified to those agencies set out in Schedule [ ] to this Agreement, and candidates identified by those agencies are to have an equality of opportunity in the selection process.

2.5 Unwaged work experienceThe equivalent of 5 Person-weeks per £1m in contract value is to be made available as unwaged work experience opportunities. Some of these may not be utilised.

2.6 RemunerationNew Entrants, Apprentices and Other Trainees shall be paid in accordance with industry norms and shall have terms and conditions of employment that are at least equivalent to those provided to workers that have equivalent skills and experience. Employers are encouraged to increase the remuneration of New Entrants, Apprentices and Other Trainees in line with their experience and productivity.

2.7 Supply-chain OpportunitiesWhen requested by the Client, the Contractor shall participate in initiatives to identify and nurture additional supply-chain organisations based in or around the area where the development is taking place.

2.8 Monitoring & Verification InformationWithin four weeks of completion of each thirteen week period following implementation of each contract the Contractor shall provide the Client with a Targeted Recruitment and Training Performance Statement.

(see Good Practice Box 4 for details of monitoring information that contractors may be required to provide)

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2.6 Managing, monitoring and reporting

2.6 Managing, monitoring and reporting

Keep it simpleThis last stage is about making sure that social benefits are really delivered. If you have contractually required social outputs then you need to require evidence that they are actually being delivered. The more thinking you have done at the outset of the procurement process to specify tangible outcomes, the easier it will be to collect the evidence. Defining the specifics is key.

Collecting the evidence requires simple but effective monitoring and reporting procedures in place that are proportionate to the contract and the social benefit. It is better to have in place fewer achievable targets and supporting data monitoring procedures than a complex set that will never be met or monitored. This has been the experience of Elevate, a Housing Market Renewal pathfinder, which has recently reduced its KPIs on new contracts from 15 to 5 after contractors complained that they had to collect too much data. You also need to think about how monitoring data can be verified, especially as the Data Protection Act 1998 may limit the ‘personal information’ that can be provided about employees.

Driving the message homeYou will need to make the monitoring information and achievement of targets a key priority. Your contractor is likely to take their cue from you and place whatever priority you place on meeting those targets. In practice, unless the contractor believes that it is a priority they are unlikely to volunteer to fulfil the requirements. If your project performance KPIs put as much emphasis on the social benefit targets as on other performance measurements you are more likely to achieve the outcomes you specified.

Resourcing itOn larger schemes a performance manger can take on the role of chasing performance on social requirements. On smaller schemes the overall project manager will need to incorporate it into the other activities such as cost control, programme management and broader quality issues. In Raploch they had a dedicated Community Benefits manager, in Dublin Docklands they had a department focussing on Community Gain, but in many projects it has to be managed as part of the day to day activity.

Irrespective of whether it is a dedicated role or a function within a wider role effective monitoring, and hence delivery, requires a named officer on the procuring side and on the contractor side who will take responsibility for the delivery of social benefits. This is the case at the ground level, where named officers will be responsible for chasing up outputs, and at director level, where accountability for delivery will lie.

It is important to be aware, too, that ensuring the right people and systems are in place incurs costs. Monitoring can get expensive, especially where contractors require a significant amount of chasing. The following outline explains how to set up effective accountability procedures.

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Setting up an accountability process

On award of contract– review the agreed targets– establish who in the contractor’s team is the point of liaison – establish frequency of review meetings– broker relationship with relevant gateway agencies and key public sector roles– agree reporting methodology

During contract– maintain frequency of review meeting– ensure that regular updates are happening– ensure that progress is being made– support and broker where necessary

At the end of contract– maintain a full report of outcomes– track against expectations– for good practice write it up as a case study

Given the wide range of possible social benefit requirements in public contracts, you are likely to find that each contract will use a combination of approaches to implementation and monitoring depending on the particular requirements of each scheme. Some requirements may, for example, justify a simple retention of amounts until certain conditions have been fulfilled, others an incentive payment regime based upon achievement of clear and objective KPIs, and others may perhaps remain simply as normal contractual rights and obligations without any particular need for additional incentive measures. There are, however, risks and issues associated with each approach and you may want to seek advice on a case-by-case basis depending on the complexity of the scheme.

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Good Practice Box 41 - Monitoring Results

Sample wording for monitoring training and employment social benefits

Within 4 weeks of completion of each [4/13/26] week period [delete as required] following Implementation to provide the Employer with a Targeted Recruitment and Training Performance Statement setting out in relation to the period and the contract to date:

2.9.1 the number of weeks’ employment provided to each new entrant trainee, including those on sites outside of the contract where this has been necessary to provide continuity of employment and training and where this has been agreed with the Employer;

2.9.2 the number of new entrant trainees retained in employment after the completion of their period as a ‘new entrant trainee’;

2.9.3 a schedule showing for each contractor and subcontractor:the number of personnel starting on site in the period and cumulatively;•the number of vacancies notified to agencies named by the Employer;•[the number of people engaged on site in any capacity that have their main •residence in one of the following postcode areas [ ] (enter the relevant 3 or 4 digit postcodes)] or [the postcodes of all people engaged on site in any capacity].

2.9.4 a schedule listing the firms invited to tender or price for subcontracts and supply contracts under 2.8 above and indicating which of these were successful;

2.9.5 [the total value of subcontracts and supplies contracts that have been awarded to firms with a [](enter the relevant 3 or 4 digit postcodes) post-code] or [the post codes of all subcontractors and suppliers and the value of the contracts awarded to each].

For verification purposes the following documentation will be required by the Employer using pro-forma documentation provided:

2.9.6 a trainee recruitment notification signed by the trainee (to permit the provision of personal data to the Employer for contract monitoring purposes);

2.9.7 a trainee transfer notification where a trainee is moved between sites, or between employers engaged in the development; and

2.9.8 a trainee completion or termination notification

1 Anthony Collins Solicitors and McFarlane (2008) The Can Do toolkit: targeted recruitment and training for social landlors.

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Monitoring Results - Illustration 1

This shows the monthly data collection proforma for sustainability KPIs used by Elevate

HMR Group Repair and Facelift Programme: Construction Key Performance Indicators

Monthly KPI Data Collection Form

* Note: If the contractors do not provide appropriate evidence they risk a score of zero (0) for that particular KPI. Appropriate evidence will be outlined during discussions prior to signing the Partnering Agreement.

Month and Year of Performance:

KPI

Date Completed:

Contractor Sign-off By:

Local Authority Sign-off By:

Accidents Number Description of any reportable accidents

Labour Total Labour Total Local Labour Site Register evi-dence provided to local authority *

[ YES ] or [ NO ]

Waste Total Tonnage Total amount sent to Landfill

Waste Transfer Notes and Waste Contractor evidence provided to local authority *

[ YES ] or [ NO ]

Project Spend

Total Spend Total Local Spend Orders, receipts, invoice evidence provided to local authority *

[ YES ] or [ NO ]

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3. Procurement Exemplars

3. Procurement Exemplars

This section highlights two organisations that have, in the most part, demonstrated good practice throughout the procurement process. Of course, there are many organisations or projects that have adopted good practices or achieved strong outcomes, but it is rare to find good practice demonstrated all the way through the procurement process; the golden thread. The key, as these case studies show, is to get it right at the start by being clear about what you want to achieve, and then following that through each step of the procurement process, including through to collecting the data that show what has been achieved.

The BackgroundRaploch is facing real industrial decline that saw unemployment rocket to 75%. Raploch Urban Regeneration Company was set up in 2004 to lead the town’s regeneration. Raploch URC recognised that the town’s physical regeneration was inseparable from the need to create local employment and skills opportunities. It therefore pioneered the use of community benefit clauses to ensure that any contractor or developer would provide a set number of training and employment opportunities over the life of the project.

Outcome225 Training and Employment new entrant places over the 10-year programme •Support and mentoring for small businesses •Ring-fencing of £2 million for suitable sub-contracting works •Support and mentoring for social enterprises - £900K ring-fenced to take forward •projects

The BackgroundGlasgow Housing Association (GHA) is the UK’s largest social housing stock-transfer Association, receiving 80 559 housing units from Glasgow City Council in March 2003. One of the key objectives of the transfer was to secure investment to contribute to area and community regeneration and social inclusion. The initial investment was for £750 million over five years commencing 2005-06.

OutcomeThe GHA’s social benefits project is seen as the most significant use of employment and training requirements in construction contracts in Britain (Scottish Government, 2008). Over its first 30 months GHA achieved:

• Over12%ofemployeeswerenewentrants• 10,399person-weeksofapprentices• 2,642ofperson-weeksoftraining

These results are also cost neutral. The contractors have been required to obtain the resources they needed to meet the employment and training targets by drawing on existing management and supervision, obtaining external funding (from, for example, CITB and SEG) and obtaining good productivity from trainees. This has meant the recruitment and training outputs are truly ‘added-value’.

The golden thread – successful social procurement

Raploch R3 Housing Development

Glasgow Housing Association

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Raploch Urban Regeneration Company - Housing Development

Before advertising the contract

With unemployment at 75%, Raploch URC knew that regenerating the town also meant creating opportunities for the local people through training and employment. These goals were therefore there at the outset.

The vision enshrined in the Business Plan includes targets to improve education, income and employment levels in the area, which provided the remit to address training and employment in its procurement strategy.

Powers & Policy Before its incorporation in 2005 Raploch URC did not have a legal identity separate from its partner bodies, one of which was Stirling Council, and therefore could not enter into contracts. The procurement was therefore undertaken on its behalf by Stirling Council and social benefits had to be procured under its powers. The broad legal powers are provided by the Local Government in Scotland Act 2003 which includes a power to promote or improve the well-being of its area and persons within the area. The policy basis for action was the Raploch URC Business Plan referred to above (to which Stirling Council was a party), the Council’s Social Inclusion Policy and the Stirling Community Plan.

As part of the Community Benefits in Public Procurement (CBIP) trial, Raploch had access to CBIP expertise as it developed its social benefit procurement.

First notification

The OJEU Notice, at an estimated value of £75m for the works, included the following statement on Community Benefits:

The partner will be expected to embrace the concept of sustainable development and community benefit and will be required to work with the partners to deliver employment/training opportunities and other Community Benefits.

The OJEU made it clear from the start that community benefits, particularly employment and training opportunities, were central to the development.

The Tender documents

The tender documentation continued to emphasise the importance of community benefits

1. Briefing contractors – a briefing meeting was held at which Raploch URC highlighted the importance of the community benefit requirement and gave bidders the chance to clarify any questions.

2. The PQQ included a question about bidders’ experiences of delivering social benefits, including experience of:

* supporting economic development * community consultation/capacity building * training and employment opportunities * partnership work with local people and other appropriate local agencies

The PQQs were then evaluated by a multi-disciplinary panel that included the URC’s Community Benefits development officer. Each member of the panel scored the PQQ independently. These scores were then combined within a weighted framework. The three applicants with the highest scoring responses to the PQQ overall were also the highest scoring in relation to the community benefit questions and they were invited to tender for the contract.

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3. Proforma Method Statements were included in the tender pack. They covered employment, training, equal opportunities, social enterprises and small business. For example, bidders were asked to:

Describe the steps that will be taken to ensure that suitable applicants from Employment Connections, EmployAbility Stirling, Job Centre Plus, Triage Central Ltd., Youth Services, Careers Scotland, Breaking the Mould and the Raploch Community Enterprise are interviewed by the prospective employer.

This ensured that a range of people were provided with the opportunity to access employment.

Bidders were also asked to demonstrate in their method statement their monitoring and reporting plans for the relevant community benefits as well as how they will ensure sub-contractor compliance, and insurances. These elements look ahead to the monitoring and reporting clauses in the contract.

4. A disclaimer was also included to ensure that Raploch URC could not be held responsible for any failures on behalf of contractors to deliver on the community benefits.

The inclusion of community benefit requirements does not comprise or imply any promise on the part of the Employer or their agents or the Raploch Partnership (Shadow URC) to provide suitable trainees or labour. Within this context the employer and the Raploch Partnership will work with agencies to help facilitate the achievement of these community benefit requirements.

Evaluation

Evaluation Criteria were clearly specified and included in the tender documentation. Each section of the Method Statement was given a score out of 100 and each question within each section was allocated a score. The community benefit scores were weighted as 10% of the overall scores. In view of its priority, the highest weighting was allocated to the training and recruitment elements. The procurers therefore ensured that these priorities, highlighted at the outset, remained so throughout the tender process.

Panels were established for each of the five elements of the bid, one for Community benefits. An average of each members’ score for the community benefit elements was calculated and then combined with the scores for other elements of the bid from other panels.

These procedures ensured that the evaluation was clear and transparent.

ContractContract clauses were drawn up using the Method Statement. This ensured that there was continuity between the benefit requirements set out in the OJEU Notice all the way through to the final contract.

Monitoring and managing

The inclusion of monitoring and reporting method statements provided a framework for how the community benefits would be monitored. As the results show, the project was highly successful in meeting its aims of improving training and employment opportunities for Raploch residents.

To look at the tender documents in full go to the website hosted at www.sibni.org

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Glasgow Housing Association

Before advertising the contract

As a Registered Social Landlord (RSL) GHA is governed by the terms of the Housing (Scotland) Act 2001, which permits it to promote or improve the economic, social or environmental well-being of its residents (or residents and other persons) and the area in which the houses or hostels it provides are situated. As for Local Authorities, these powers gave GHA the power to include targeted recruitment and training (TR&T) clauses when contracting with the private sector.

The policy intention to create training & employment opportunities is set out in a range of documents such as the GHA’s Procurement Strategy and its Neighbourhood Renewal Strategy.

GHA also put in place supply side support from a number of agencies to help contractors to meet the KPI targets.

First notification

The OJEU notice included reference to the social benefit requirements of the contract:

“Under this contract/ these contracts, the contractor/supplier will be required to support the awarding authority’s economic and social regeneration objectives. Accordingly, contract performance conditions may relate in particular to social and environmental considerations.”

The Tender documents

i) Briefing contractors - A contractor’s conference was held where bidders heard about the employment and training requirements and had the opportunity to ask questions.

ii)The PQQ sought information on bidders’ apprenticeship and training activity; recruitment and training of young people; adult returns and the unemployed; willingness to invest in training; the contract monitoring arrangements for training; and the person responsible for training in the company. A scoring framework was used to assess responses to the PQQ questions. The training and employment questions carried 10% of the available score to ensure that only contractors with relevant experience were invited to tender.

iii) A Method Statement was required from bidders that detailed how they would ensure:

• everyvacancynotifiedtoagenciesnamedbyGHA• 10%ofperson-wksdeliveredbynewentrantsengagedinatrainingprogramme• 5%ofpersonweekstobeavailableforunwagedworkexperienceplacements• Monitoringandverificationprocedures• ProvisionofreportsonperformanceagainststatedKPIs.

Evaluation

A scoring framework was developed and tested. The employment and training method statementsectionwasallocatedbetween5%and12.5%ofthe‘qualityscore’whichequatestoapproximately1.5%and3%oftheoverallscoringframework.BoththePQQtrainingelement and the Tender Method Statement were scored by members of the GHA’s Regeneration Team who had a good understanding of construction training and the needs of the target communities.

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ContractGHA has quite a complex contractual set-up which includes four contracts relating to: the initial Framework contract; a partnering contract and Sectional Commencement Agreements that set out the project-specific requirements; and a GHA partnering contract that manages partnership between contractors. Initially, only the contracts relating to partnership between contractors and partnership with GHA referred to employment and training requirements. However, GHA have been in the process of revising this so that contracts now contain agreed KPIs relating to the Method Statements. Contracts contain the following KPIs:

• Numberofpersonweeksdeliveredbynewentrants(brokendownbyapprentices and trainees) - and what percentage this represents of the total person weeks and numbers on the contract.

• Numberofpersonweeksdeliveredbyworkexperienceplacements-andwhatpercentage this represents of the total person weeks and numbers on the contract.

• Numberofvacanciesnotifiedto(supplyside)agenciesnamedbyGHA.• Numberandpercentageofvacanciesfilledbycandidatesreferredbythe(supply

side) agencies named by GHA.• Numberofpeopleworkingonthecontractwhoareundergoingtraining.• NumberofpeoplewhocompleteaqualificationacceptedbyGHAwhileworking

on the contract.

Although, initially, the PQQ was used to recruit contractors with relevant training and employment experience it wasn’t used in the allocation of contracts within the framework.WithoutKPIsintheprojectspecificcontracts(SectionalCommencementAgreements) or the Framework Agreements GHA could not use performance as the basis for determining the allocation of future work within the framework. Including the KPIs means GHA has a legal basis for taking each contractor’s performance into account in deciding the allocation of work.

Monitoring and managing

Monitoring requirements are set out in a T&E Monitoring Pack and discussed with contractors. They are also then discussed at individual monitoring meetings, with support from GHA available throughout the contract life.

GHA have evolved their monitoring systems over time in response to concerns around the time needed to collect the data; challenges around verifying data; and the need to develop a system that does not pose too much of a burden on contractors.

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4. Finding out more

This toolkit sets you on the road to procuring social benefits. If you are really going to do it then you’ll probably want to find out more. This section points you in the right direction.

The websiteWe have put together a dedicated website that provides:

i. Case studies, including, among others, how the following major capital projects delivered social benefits:

• SheffieldHomes• DublinDocklands• OlympicDevelopmentAgency• LondonBoroughofIslingtonBuildingSchoolsfortheFuture

ii. More detailed legal guidance and a bibliography of legal regulations.

iii. Links to other sources of information

The website is hosted at www.sibni.org

References

Anthony Collins Solicitors and Richard McFarlane (2008) The Can Do toolkit: targeted recruitment and training for social landlords. (see www.whq.org.uk/i2i/about resources_php)

Office of Government Commerce (2006) Social Issues in Purchasing. London

Equality Commission for Northern Ireland (2008) Equality of Opportunity and Sustainable Development in Public Sector Procurement. Belfast.

Scottish Government (2008) Community Benefits in Public Procurement: A Report Demonstrating the Methodology for Including Targeted Recruitment and Training Clauses in Public Sector Contracts. By R MacFarlane and M Cook of Anthony Collins Solicitors

Office of Government Commerce (2008). Buy and Make a Difference. London.

Public Contracts Regulations (2006)

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Further reading

You may also want to look at some of the other publications on the subject.

McFarlane and Cook (2002). Achieving Community Benefits Through Contracts: law, policy and practice. The Policy Press for the Joseph Rowntree Foundation.

Glass, McTier, McGregor, Hirst, Delvaux (2008). Linking Opportunity and Need: Maximising the Regeneration Benefits from Physical Investment. Scottish Government Social Research. www.scotland.gov.uk/socialresearch

Cabinet Office (2008). Social Clauses Project: Report of the Social Clauses Project 2008. London.http://www.cabinetoffice.gov.uk/media/107238/socialclausesreportfinal.pdf

Deloitte Consulting (2010). Achieving Social Benefits through Public Procurement. For the Strategic Investment Board, Northern Ireland.

For further information seewww.deloitte.co.ukwww.mcgrigors.comwww.shineppp.com

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