Social value in construction: a quick guide to the role of procurement

The government announced it was introducing a public procurement model that takes greater account of the additional social value created by contractors who are bidding for work. 

The Public Services (Social Value) Act (2012) already requires public buyers to consider how they could secure social, economic and environmental benefits as part of their procurements. This policy note highlights changes that mean, from 1st January 2021, public sector buyers are required to think differently about how they can secure social value from the goods and services they buy for their local area and/or stakeholders. The policy note also introduces a Social Value model for some organisations which sets out that social value should be explicitly evaluated rather than just being  ‘considered’. Further information is available in this guide which has been published alongside the policy note.

This is a significant policy change that means social value will become a mainstream priority in all public sector procurement from next year.

So, what does this mean for your building and construction projects?

Our category team works hard to understand what our customers’ potential social value requirements are at the earliest opportunity and have ensured that our frameworks allow customers to embed it in a way most appropriate to the individual organisations. This includes the use of social value calculators such as TOMS. 

There is a wide range of social value related considerations, such as opportunities for disadvantaged groups, delivering sustainable and healthy communities, driving climate changes, and with recent impacts of COVID-19 and brexit on labour, social value that considers upskilling the workforce and providing job opportunities is becoming more important than ever. 

To ensure that there are clear lines of sight between your unique social value expectations and what suppliers can offer, then here’s our 8 top tips on what you need to consider.

1. Embed throughout the project

Don’t just stick a few social value KPI’s into your procurement documents and hope for the best. It won’t work. Instead focus on embedding social value considerations throughout the entire project. For larger projects consider a project specific social value strategy. Don’t wait until the main contractor tender to start thinking about it either, consider writing clear guidance around social value and what is expected into the brief for project designers and project managers. 

2. Don’t ask for everything

Early community engagement brings tailored social outcomes. This will help your team to be able to focus on what social value outcomes you want for your project and help to avoid you asking for everything. What are the key themes for the area of construction? Does it have a high unemployment, or a large BAME representation? Is it in a built up area with limited community space? Engage with local charities and social enterprises to find out what is important to them and build this into your strategy.

3. Make everyone accountable

Encourage common goals and shared objectives for the project team. Are the designers/project manager/contractor/facilities management provider all linked to common social value goals? For more complex infrastructure projects Sub Alliancing may be a suitable way to bring shared objectives and success measures to social value.

4. Carefully consider what questions to ask at tender stage

At tender stage it’s great to give social value a high quality percentage, but remember it needs to be proportional and relevant. Spend some time thinking about what is relevant for your project and try to tailor the question to be as project specific as possible. A generic question is likely to get a generic answer. Think carefully about who you ask to assess and score these questions, it should be someone with the right skills and experience to know a good answer from a bad one. A good answer will deliver some tangible outcomes for the project and a bad one will have all the right buzz words, but promise little.

5. Make it contractual

Getting some great social value outcomes and tender stage is fantastic, but it’s really important that this is fed through and actually delivered. One way to do this is to convert these promises into social value KPI’s that are monitored throughout. 

6. Monitor

Once you’ve awarded your contract and started your project make sure that the KPI’s are delivered. It sounds simple, but adding Social Value KPI’s into the regular project performance reviews is a great way to ensure focus is maintained. 

7. Ask for the data to back it up

It’s a good idea to include clear instructions on exactly what you want captured. For example, if you are asking for contractors to train apprentices, it’s a good idea for them to record apprentice initials and postcode, the programme, level and start and end dates so that you can interrogate the data if you wish. Ensure your contract has a right to audit clause.

8. Share positive outcomes

If your project delivers some great social value outcomes share it and talk about what worked and why. Shared learning is a great way for us to develop and improve. 

Next steps

For more advice and guidance on tackling social value in construction projects, fill in our short online form and one of our commercial experts will be in touch. 

You can also explore our full range of construction frameworks on our agreements page.

Further policy advice and guidance on social value can be found on GOV.UK. 

September customer newsletter

Welcome to our September customer newsletter – read it here.

If you don’t currently receive our monthly customer newsletter, you can sign up by completing this short form. Each month, we’ll send you our latest news stories and case studies, as well as information on upcoming aggregation opportunities, events, webinars and much more.

You will also find a full list of all the commercial agreements we offer, alongside details of how we can help you build policy considerations into your procurement, in our interactive digital brochure.

How to put national buying power to work for local regeneration and placemaking initiatives

Regeneration and placemaking are crucial aspects of economic development. It usually involves civic projects intended to promote economic growth and improve the quality of life, typically requiring substantial investment in capital and infrastructure in the local area. 

Regeneration projects vary and can be as diverse as the creation of new leisure and tourist facilities, the redevelopment of retail space, the creation of new business premises, and, often, a combination of multiple overlapping and inter-related projects. 

Placemaking is the collaborative process of designing and shaping public spaces to create places that people feel connected to and promote social interaction, well-being, and a sense of belonging. It involves engaging with local communities, stakeholders, and experts to understand their needs and aspirations and then transforming community spaces accordingly.

Placemaking and urban regeneration

Delivering regeneration and placemaking activity requires access to resources, procurement expertise, working with other organisations, and using commercial routes to market where local authorities may lack the necessary experience and expertise.

By combining practical placemaking principles with well-executed regeneration procurement, urban development projects in the UK can create sustainable, inclusive, and thriving communities that meet the needs of residents and contribute to the overall well-being of the area. 

Factors to consider when designing these projects include:

1. Community engagement

Involving the local community in planning and decision-making is usually a statutory requirement. Encourage participation through workshops, surveys, public meetings, and other engagement activities to gather residents’ and stakeholders’ ideas, preferences, and concerns.

2. Design and activation

Emphasise thoughtful design that considers the unique characteristics of a place, its history, culture, and local context. This approach aims to activate spaces by including amenities, green areas, public art, cultural facilities, and other elements that encourage people to spend time and engage with the environment.

3. Mixed-use development

Placemaking often promotes mixed-use development, integrating residential, commercial, and recreational spaces within a compact, walkable area. A mixed-use model allows you to create a sense of vitality, 24-hour activity, and diversity, making the place more appealing and functional.

4. Sustainability

Embracing sustainable principles, such as green infrastructure, energy efficiency, waste management, and sustainable transportation options, helps to create environmentally friendly and resilient places that help mitigate climate change and enhance the overall quality of life.

Supporting local authority regeneration projects

Crown Commercial Service (CCS) plays an important role in helping the UK public sector save money when buying common goods and services. We are the biggest public procurement organisation in the UK. Our commercial expertise helps buyers across local government and the wider public sector on a range of issues, including urban regeneration.

Renewing and reshaping localities to make them more attractive places to live, work, and visit is a high priority for local authorities. Our solutions are helping Nuneaton and Bedworth Borough Council to reinvent and reinvigorate the Nuneaton town centre completely. Their regeneration programme features the Grayson Place project, an exciting new meeting, eating, drinking, and entertainment destination currently under construction. 

Helping local authorities meet sustainability targets

Local authorities have significant influence over the key sectors of energy, housing, and transport, reform of which will be essential to achieving net zero. Regeneration activity has to be mindful of the requirement for our local places to support the transition to carbon net zero (CNZ), whether installing roadside electric vehicle charging points or using technology to support the delivery of services.

Our commercial agreements include procuring everything from decarbonising property, using innovative technology to develop clean air and low emissions zones to electric vehicle charging. For example, we recently helped Bristol City Council meet legal limits for pollution.

Using our Traffic Technology and Associated Services agreement, Bristol will install cameras for number plate recognition and identification of bus lane infringements, complete with an on-site maintenance package and a back-office data management system. The solution will also impact traffic signal timings to improve traffic flows and increase bus priority at traffic signals.

Regeneration procurement – not sure where to start?

Smart procurement involves selecting and contracting suppliers, contractors, consultants, and other stakeholders to supply the goods and services required to implement regeneration initiatives effectively. We have a range of dynamic solutions to help local authorities deliver a variety of regeneration projects, optimise budgets, and meet key policy reforms.

We offer a number of comprehensive end-to-end commercial agreements to meet your needs, from off-the-shelf options to more advanced and bespoke solutions to consulting and market insight services. So, whether you are delivering against relevant government policy agendas or helping the local economy thrive by reviving the town centre, we can help.

Not sure where to start? Our commercial agreements are designed to support you at every stage of your regeneration journey, including project development, public engagement, and project delivery.

Access to funding to support regeneration

Local authorities are under extreme pressure to make their budgets work harder. We focus on saving you time and money, allowing you to get on with what matters most by providing the best possible outcomes for your local communities. CCS will support you throughout the buying process to ensure you maximise every pound spent.

Grant funds are also available for regeneration projects with sustainability aims. We have worked to collate a list of open CNZ grants and funding opportunities from across the government into a single place. You can find out more on our website.

However, sometimes there is a need for additional sources of finance to complete projects or deliver additional complementary elements. Our Asset Finance solution is an industry-leading twin-agreement solution providing a revolutionary way for public sector customers to source funding for their projects. 

The solution involves a diverse range of lenders competing on customer projects through our leasing and loan Dynamic Purchasing System (DPS), ensuring a transparent and genuinely competitive cost of financing. If you want to understand more about our Asset Finance solution, you can find out more by visiting our finance and funding options webpage.

Discover more

From sourcing funding to project delivery, we can help take the pressure off. To learn more about Regeneration and Placemaking, visit our Regeneration and Placemaking page.

Visit our social value webpage to learn more about how we can support your organisations social value goals.

You can find more resources about our work to support local authorities on our website. To speak to a member of our expert team, please call us on 0345 410 2222.

How Crown Commercial Service can help tackle energy inefficiency in social housing

In the UK, housing associations collectively provide homes to around 6 million people – nearly 1 in 10 of the total population. Given the scale of social housing, housing associations can play a significant role in helping to meet the UK’s net zero goals. Here’s why:

On a residency basis, households are bigger emitters of greenhouse gases (GCG) than any industry sector, accounting for 26% of total emissions, with around 14% of these emissions coming from domestic heating in the housing sector. Although energy-efficient housing varies depending on property age and type, the age of a property is the most significant single factor in the energy efficiency of homes.

Tackling energy inefficiency in the housing sector – the challenges 

Whole home retrofit (where a tenanted property is updated to make it more energy efficient and to reduce carbon emissions) is a significant priority for the housing sector. According to a recent report, UK housing associations will have to spend £36 billion to bring all their homes up to an EPC C efficiency standard by 2030 and install the required insulation, ventilation, and clean heat technologies to meet the UK government target of reaching net zero by 2050. 

The report also highlights that the energy performance of the UK’s social rented sector is significantly better than private housing, partly because of energy efficiency and fuel poverty regulations and partly because social landlords are proactively tackling the energy-efficient retrofit of their properties. The sector is already investing and driving innovation in this area. As a result, 64.3% of housing association homes already have an EPC rating of C or above.

Although tackling home energy inefficiencies is an urgent requirement, the cost to make homes more energy efficient by improving insulation and ventilation and installing energy-efficient heating and cooling systems is a significant barrier to overcome. 

Scale is also a problem. At the current pace, achieving goals to retrofit all social and fuel-poor homes by 2030 will be challenging. Local councils, calling for more actions, are keen to step in with locally targeted programmes to tackle fuel poverty. 

Accelerate action through whole home retrofit

Repairs and maintenance have always been a hot topic in housing – it’s usually the top priority for residents because it can make or break a housing provider regarding the quality of their homes. Whole home retrofit is the process of improving a home’s energy efficiency, comfort, and sustainability. 

It can involve a variety of measures, including:

  • adding insulation, which can help to reduce heat loss in the winter and heat gain in the summer, making the home more comfortable and reducing the energy bill
  • installing energy-efficient appliances, which can help reduce energy bills and make the home more environmentally friendly
  • replacing windows and doors, which can improve air quality and reduce noise levels, making the home more comfortable and liveable
  • installing solar panels, which can generate electricity from the sun, making the home more self-sufficient and reducing reliance on fossil fuels

Housing associations also face increased scrutiny to effectively target damp and mould problems, which ties in with the new amendment to the Social Housing Regulation Bill – Awaab’s law. Awaab’s law requires housing associations to take steps to tackle damp and mould issues in their homes. 

Whole home retrofit can be an effective way to comply with this law, as it can help to reduce damp and mould problems, improve residents’ comfort and quality of life, and increase energy efficiency and sustainability.

Yet funding retrofitting programmes while building new homes to meet demand is a significant financial challenge for the social housing sector. It’s projected that retrofitting all social housing in the UK could cost as much as £104 billion, with the annual cost estimated to be £3.5 billion.

Improving energy efficiency in social housing 

Our new Housing Maintenance and Repair Dynamic Purchasing System (DPS) agreement offers various services that can help reduce energy costs and achieve net zero in social housing. The new DPS provides a compliant, one-stop shop for all housing maintenance and repair aspects for both tenanted and void/vacant properties. 

The DPS also offers buyers more flexibility in choosing suppliers because it allows new suppliers to be onboarded to the agreement at any time. This is especially relevant to Section 20 of the Landlord and Tenant Act 1985, which requires tenants and leaseholders to be consulted about works of a certain value, and allows them to nominate contractors to be considered to complete the work. 

What are the benefits of using CCS’s new DPS?

Our new DPS has the agility and flexibility to meet the wider government’s Carbon Net Zero 2050 target and any future decarbonisation legislation with Whole Home Retrofit and Maintenance services. By implementing energy-efficient measures through retrofitting, social housing residents can benefit from reduced energy costs. 

Here’s how:

Whole Home Retrofit Service

Retrofit services allow housing associations and local authorities to upgrade their existing housing stock with energy-efficient measures. Retrofitting can include installing solar panels, insulation, improved ventilation, and ground source heat pumps, enhancing energy efficiency and reducing energy costs for residents. 

For example, installing solar panels, insulation, and ground source heat pumps, for example, can improve the energy efficiency of social housing and give residents an average saving of 42% or £567 per household per year.

Access to accredited suppliers eligible for government sustainability funding

Many customers in the housing sector will be drawing down government funds for sustainability-related works. To draw down those funds, their supplier needs to have the PAS2030 accreditation. 

Our new Housing Maintenance and Repair DPS features suppliers with PAS2030 accreditation – where retrofit teams, including assessors, coordinators, and designers, have clearly defined responsibilities and meet accountabilities when proposing whole house remedial works.

To complement these services, we also can offer Whole Home Retrofit, with our PAS 2030/2035 certified suppliers able to provide solutions to help tenants save money on energy bills and help Buyers meet their net zero goals.

Improved housing portfolio management

The new DPS agreement provides access to Housing Portfolio Management services, enabling effective management of housing stock. For example, it includes handling move-ins/outs, disposals, and implementing a centralised service to manage and fulfil repair requests.

In addition, the agreement covers essential compliance services such as fire safety, electrical testing, and asbestos management. Ensuring compliance in these areas contributes to overall energy efficiency and safety in social housing.

Promotion of innovation and local supply chain

CCS recognises the importance of supporting small and medium-sized enterprises (SMEs) and local suppliers. By working with a diverse range of suppliers, including SMEs, you can stimulate local economies, create employment opportunities, and promote innovation. Engaging with local suppliers can also reduce carbon emissions and costs by minimising travel distances.

Find out more 

We want to empower you to get the best possible value from your procurement and join the growing number of housing providers making significant savings with CCS every year.

To learn more, visit our agreement page and join our housing forum.

Social value: how local government is leading the way

Social value will be an integral element of local authorities’ wider economic, social and environmental recovery planning after Covid-19, and critical to place-based recovery plans across local government as the nation seeks to build back better.

2022 marked a decade since The Public Services (Social Value) Act 2012 came into force.

And what a decade it has been for the public sector. What is perhaps most remarkable is that the winds of change that have buffeted the sector since then have not stopped many organisations from putting in the detailed planning required to ensure that the vision set out in the Act can be realised.

Crown Commercial Service supports the public sector to get the best deal on the procurement of thousands of goods and services. 

Ensuring that suppliers on our framework agreements are meeting the needs of potential customers, including on social value, is a key part of the development of new solutions, and we’re seeing the first generation of new agreements awarded since the Cabinet Office’s Procurement Policy Note 06/20 of September 2020. 

And while that note focused primarily on central government contracts, suppliers will increase their chances of winning contracts by offering many of the same benefits to organisations across local government and beyond.

How local government leads the social value agenda

The measurement of social value and the community benefits that can be generated from public sector procurement has become increasingly standardised across local government, with the introduction of the national TOMs framework, developed by the Social Value Portal in 2017 and endorsed by the LGA.

TOMs (Themes, Outcomes, Measures) created a new, common language for social value, encouraging a greater consistency in its reporting and measurement. The 5 key themes that TOMs is built around are:

  • promoting local skills and employment
  • sustainable and responsible regional business growth
  • building healthier, safer, and resilient communities
  • decarbonising and protecting the planet
  • Promoting and enabling innovation

TOMs is updated regularly to reflect feedback and the latest statistical data, but the core Themes and Outcomes remain unchanged. 

It is these elements which potential suppliers to the public sector need to factor into their thinking when bidding for contracts. 

What CCS and suppliers are doing now

With so many framework agreements offering a dizzying array of goods and services, suppliers are interpreting social value in different ways, with guidance from CCS’s category experts.

CCS may ask suppliers bidding to join our agreements to demonstrate how they work to ensure fair, inclusive and ethical employment practices. This could include evidence that they’ve advertised vacancies in a wide range of locations, are using name-blind recruitment practices, or that they’ve engaged with VCSE organisations about the possibility of offering apprenticeships. 

Suppliers on CCS’s furniture agreement are asked to support the Greening Government Commitment to ensure that all packaging of products is reusable or readily recyclable. They report on their greenhouse gas emissions and the amount of waste they send to landfill, and are obliged to demonstrate sustainable sourcing practices for the timber they use.

We also recognise the important role that small and medium-sized enterprises (SME) can play in delivering social value locally. CCS will publish a new SME Action Plan later this year, setting out how we are working to increase SME representation on our agreements and reduce barriers to the public sector working with them.

The commonality here is the importance of considering how social value can be maximised at every stage of the procurement process, whether you’re buying in physical goods or human expertise.

Find out more

You can find a full list of Crown Commercial Service commercial agreements and details of how to build policy considerations into your procurement in our digital brochure.

This article was originally published in Public Sector Executive.

The Construction Playbook: building social value into the recovery

The Construction Playbook sets out how the public sector can build social value into the foundations of our procurement processes.

The Build Back Better plan – published at a crucial period during our response to the pandemic – sets out the Government’s aspirations for growing our economy in a way that levels up all areas of the country. 

In doing so it highlights the need for high quality infrastructure, skills investment and innovation. 

With the Government planning £100 billion of capital investment during 2021/22, there has never been such a strong focus on how we can add community social value into our infrastructure projects – themselves major drivers of local growth.

The Construction Playbook sets out how the public sector can get projects and programmes right from the start, building social value into the foundations of our procurement processes.

Download our step-by-step guide to the Construction Playbook

The Construction Playbook and social value

The Construction Playbook states that central government tenders must include a minimum of 10% of their evaluation criteria dedicated to social value. The priority themes and outcomes are set out in 2020’s Procurement Policy Note (PPN) 06/20 – Taking Account of Social Value in the Award of Central Government Contracts.

The opportunities are endless: organisations may be looking at providing apprenticeships and local skills training, supporting disadvantaged groups in your community, or boosting local sustainability, to help you to get closer to your carbon net zero targets.

All central government departments and their arm’s length bodies are expected to follow the Construction Playbook’s recommendations on a ‘comply or explain’ basis – if necessary, explaining why their unique circumstances mean they go their own way.

How to build social value into your construction procurement

Whether you are a central government department, arm’s length body, or working in local government, health, education, housing, charities, or the blue light sector, you will need to consider how your project will make the most of the opportunities presented by the Playbook. 

That could mean engaging with local community groups like social enterprises to understand how to tailor your project to achieve particular social outcomes.

It will also mean considering how every part of your supply chain is pulling in the same direction to deliver on social value – considering sub-alliancing, and sharing accountability out to encourage partnership working. 

Each stage of the procurement process will present you with opportunities. 

Look at the guidance you provide for your project managers: does it reflect the priority level you’re giving social value? Make sure your social value is embedded into the requirements for your full professional services team, so that they are all working to shared social value goals. 

When assessing bids, think about the language the prospective supplier is using, and if it demonstrates that they understand your priorities. 

And don’t forget to make sure your chosen supplier or suppliers are contractually obliged to deliver the outcomes you want – then monitor their performance.

Help and support

There is incredibly useful guidance around model questions, how to evaluate them and how to then enforce and manage your contracts provided in the annexes to the Playbook.

You can also seek advice from your framework provider. At Government Commercial Agency, our Construction category team works hard to understand social value requirements from the earliest stages of the process, and our frameworks allow customers to embed it in the way most appropriate to their own circumstances. 

Drawing a ‘golden thread’ through your work on the built environment has never been easier – with modular buildings, refurbishment, electric vehicle charging infrastructure, and low carbon building materials all factors to consider. 

You can also use social value calculators such as TOMS, or the PPN 06/20 reporting metrics. Our Social Value and Modern Slavery alliance group lays the foundations for customer and supplier collaboration and shared learning from industry leaders.

Find out more about social value

To find out how to access estates services through GCA, visit our webpage or fill in our contact form. 

Visit our social value webpage or get in touch with our expert team to find out more about social value and how it’s embedded into our agreements.

This article was originally published in Public Sector Executive.

Changes to our agreements in August

Welcome to our monthly agreement update to help you with your procurement planning. We will publish it online each month and also share it in our newsletters and on our social media channels.

The update provides a brief summary of what has been awarded, extended or expired during the previous month. It also outlines what is due to expire in the next 3 months.

You can also get an overview of all of our live agreements in our interactive digital brochure.

Agreements awarded in August

No agreements were awarded in August.

Agreements extended in August

Agreements that expired in August

Agreements due to expire in the next 3 months

Further information

If you need further details about any of these agreements please get in touch.

You can also find out what new procurements we are working on by exploring our upcoming deals page.

If you don’t currently receive our monthly customer newsletter why not also subscribe to receive these updates and more directly to your inbox? Just fill in this short form.

Our Supply and Fit of Tyres agreement helps the North West Ambulance Service stay on the road during COVID-19

North West Ambulance Service used our Supply and Fit of Tyres (RM3767) commercial agreement to fulfil their tyre requirements and ensure that their operational fleet stayed on the road, maintaining a ‘business as usual’ approach, during a time of unprecedented demand.

The requirement

North West Ambulance Service (NWAS) requires a supplier that can meet the challenging task of maintaining a 1,050 strong fleet of vehicles that need to be on the road, providing crucial frontline services, as much as possible.

Furthermore, NWAS need to be sure that their vehicles are reliable and safe, as they often have to travel at speed, in all weathers, to their patients. 

The solution 

Using our agreement, NWAS have been able to benefit from competitive prices for their tyre needs – meaning more money to be redirected towards other priorities. 

Once NWAS engaged ATS as their supplier, they have been able to count on rigorous levels of service, to ensure that their fleet can be kept on the road and safe at all times.

This has been especially vital in 2020, which has been an especially challenging year for blue light services as they played a critical role in the nation’s response to the COVID-19 pandemic. 

The result

NWAS have been impressed with the constant and consistent level of service that they have received. Their tyre needs and expected service levels have been met and maintained.  

ATS have been able to provide excellent customer service and updates throughout this challenging time. As well as the budgetary benefits NWAS have enjoyed, ATS have been able to respond effectively to their unique and changing needs.

A NWAS Fleet Manager said: “I have to say how impressed I have been in their delivery of service to NWAS. With the number of tyre jobs that we carry out, nobody could expect them to get every job right, and there will always be the occasional issue, which I have to say are few and far between. Through ATS’s excellent customer service, they have been able to resolve issues very quickly and effectively and always offer feedback to the cause of the issue.”

Get involved

If you would like to learn more about this agreement visit the framework page or email our team of experts. 

Crown Commercial Service announces the next-generation Demand Management and Renewables Agreement

Crown Commercial Service (CCS) has awarded a new Demand Management and Renewables Agreement (RM6314), which aims to accelerate the UK’s net zero goals by helping improve the public sector’s energy consumption and efficiency. This new framework is one of 2 replacements for the current Heat Network and Electricity Generation Assets (HELGA) DPS Agreement. The other replacement is Demand Management and Renewables DPS Agreement (RM6313).

The new Demand Management and Renewables Agreement (DMR) provides a route to market for all UK Public Sector organisations to support their decarbonisation strategies. It is the first traditional framework within CCS’s wider construction and decarbonisation offering.

Decarbonise the public sector with renewable resources and energy efficiency

Our new agreement builds on the progress in helping hundreds of public sector customers, putting energy efficiency and renewable power at its centre. The agreement will support customers within the following 5 energy efficiency areas, including: 

  • Lot 1 – Solar photovoltaic projects
  • Lot 2 – Battery energy storage 
  • Lot 3 – Heat pump projects (air source and ground source) 
  • Lot 4 – Heat network (design and build) 
  • Lot 5 – Carbon Net Zero / Sustainability consultancy 

It will also include consultancy services, allowing our customers to gain access to sustainability expertise to help them maximise the potential of their decarbonisation strategies. 

The new DMR agreement, like our Construction agreements, uses FAC-1 Framework Alliance Contract terms and conditions that allow public sector organisations to establish alliance contracts for certain projects. 

Reduce emissions and consumption in the built environment

The built environment is a major contributor to greenhouse gas emissions and environmental impact. The public sector will continue to play a significant role in the country’s journey toward net zero by providing buildings for millions of citizens accessing public services. 

The new DMR agreement supports heat decarbonisation strategies by allowing customers to install heat pumps to reduce an estate’s gas consumption and heat network design and infrastructure for more extensive heat decarbonisation strategies.

Choose alternative electricity generation

Solar PV panels offer an economical alternative to generating electricity, from public and residential buildings to park and ride buses. The cost of solar PV has significantly reduced over the past 15 years, with the payback period on the initial investment decreasing too. 

Solar projects can support electricity demand across your estate and generate potential income if you export to the grid through your energy supplier. 

Using the new DMR, our customers will have access to suppliers that can support solar projects that can help reduce electricity costs over a certain period while supporting decarbonisation targets and increasing the security of energy supply, explains John Welch, Deputy Director for Construction at Crown Commercial Service.

The new DMR RM6314, combined with our Dynamic Purchasing System (RM6313), will provide effective routes to the market for varying decarbonisation projects that can support public sector decarbonisation strategies.

Climate change and social value

Social value in procurement is about making sure that what you buy creates additional benefits for society. To get it right, you need to start thinking about how to apply it to what you are buying as early as possible.

Our DMR agreement and Dynamic Purchasing System can help you meet critical sustainability goals by reducing emissions in the areas that contribute the most to your carbon footprint. For example, you can improve the energy performance of your existing estate by:

  • including plans for solar power generation and battery energy storage in your estate’s infrastructure
  • installing heat and air source pumps to improve the energy performance of your buildings
  • integrating environmental standards as part of the tender process for contracts to promote sustainability in your supply chain

Build social value into every step of the procurement process, from project scoping to contract award, to achieve wider financial and non-financial outcomes, including improving the wellbeing of individuals, communities, and the environment.

Access to a diverse and innovative supplier base

Access to innovation is critical to meeting the UK’s carbon emissions target. Our new agreement is designed to attract a supplier base that keeps pace with an expanding sustainability market. 

Our DMR agreement includes a blend of large Energy Service Companies (ESCOs) and specialist SMEs. Many of our ESCOs are supported by their specialist SME supply chain for specific projects, says John. 

Offering innovative funding options

To help overcome the challenges of funding public sector decarbonisation projects, customers can take advantage of the new DMR agreement through direct awards and Government and grant funding. 

Find out more

Start reducing your energy consumption, carbon, and costs with us today.

Our dedicated team of industry specialists are on hand throughout the procurement process helping you save time, energy and money, so you can put more focus on your organisations’ needs.

Learn more about our new Demand Management and Renewables Agreement (RM6314) by visiting the agreement webpage. 

You can find a full list of all the commercial agreements we offer, alongside details of how we can help you build policy considerations into your procurement, in our interactive digital brochure.

Levelling the playing field: The benefits of working with SMEs and how public sector organisations can make it easier for them to bid for work – Procurement Essentials

NB: This article was originally published on 12 May 2023. All information was correct at the time of writing, but may not be fully applicable following the introduction of the Procurement Act 2023.

At CCS we understand how important it is to have a diverse range of suppliers working with the public sector. We’re committed to taking positive action to make sure that the SME sector is well represented in our agreements. Our 2021 action plan reaffirms our role in enabling customers to increase the proportion of their procurement spend that goes to SMEs.

The success of this commitment is measured using SME spend through public sector contracts. £2.2 billion was spent directly with SMEs through CCS’s commercial agreements in 2021/22. An additional £687 million compared to 2020/21

This article outlines the benefits of working with SMEs, such as, but not limited to, opportunities to achieve greater social value through your procurement, access to highly skilled workforces and greater localisation, and how to encourage SMEs to bid on your procurements. 

What is an SME?

In relation to its procurement activities, the UK Government currently defines Small and Medium Enterprises (SMEs) in accordance with the below:

Size of business Staff headcount Annual turnover
Medium Under 250 Under £44 million
Small Under 50 Under £9 million
Micro Under 10 Under £2 million

Source: GOV UK 

The benefits of working with SMEs

SMEs make up an essential component of the private sector business landscape. According to the 2022 Business Population Estimates there were almost 5.5 million businesses in the UK at the start of 2022. SMEs accounted for 99.9% of the total number. Importantly SMEs employed 61% of the private sector workforce which was 16.4 million employees. They also earned 51% of the turnover in the UK private sector.

There are many benefits of working with SMEs such as good customer service, due to highly skilled and experienced workforces and smaller chains of command. SMEs are often more adaptable and agile to situations than larger organisations due to their smaller nature, which allows them to respond quickly and flexibly to changing requirements and provide the most suitable solution (ideal for tight timescales). 

SMEs can also support greater localisation, which can reduce carbon footprints associated with delivery helping to support public sector organisations in reaching net zero. They also create local jobs, and can contribute to the local social value agenda in other ways, as they are more committed to the community they live and work in.

Barriers to public sector procurement for SMEs / public procurement reforms

Historically, small to medium sized enterprises (SMEs) have faced a range of barriers in accessing procurement opportunities and in winning contracts. These barriers include but are not limited to: contracting authorities being unaware of SMEs and the types of goods and services they can potentially provide; SMEs viewing the procurement process, often rightly, as overly bureaucratic; SMEs not having the capacity to bid for opportunities and compete with large business; and the process of procurement often being undertaken on the basis of cost therefore ruling out the ability of SMEs to demonstrate their wider value.

The government is in the process of shaking up and transforming our procurement system by changing existing procurement rules in the Procurement Bill which is currently being debated in Parliament. The upcoming procurement regulation reform, Transforming Public Procurement, aims to make it easier for businesses to enter public sector supply‑chains and this will benefit SMEs and Voluntary, Community and Social Enterprises (VCSEs), both of which have historically faced barriers in working with central government and wider public sector. The Procurement Bill represents an opportunity to make it easier to do business with government such as including a new duty that will require contracting authorities to pay due regard to the barriers faced by SMEs, removing these where possible.

How CCS is supporting SMEs to access public sector procurement opportunities

CCS published our last SME Action Plan in 2021. Since then, we have made good progress, working to reduce barriers for SMEs to work with us and simplifying our public procurement processes. 

For example, we know that suppliers spend a lot of time reading and completing bid documents and that these can be complex and long, which can be problematic for those organisations which are too small to have in-house procurement knowledge.  

To help to address this we created a CCS standard template for framework contracts for common goods and services. The Public Sector Contract (PSC) is shorter which makes it simpler to use and easier to understand what is required, in terms of the bid and rules of engagement. An updated version has recently been published that has capped liabilities on GDPR (it was previously uncapped) further reducing the barriers for SMEs.

Other ways we aim to support suppliers is by publishing information and guides on our website and using commercial agreements that are easy to enter at any time. Our recently updated information for buyers and suppliers pages have guidance for SMEs about bidding for public sector contracts as well as where to look for opportunities and how bidding works. It sets out what you need to do to register to get alerts, how to respond to opportunities and outlines the process of supplying through CCS.

How can Dynamic Purchasing Systems help SMEs?

As explained in a previous article, Dynamic Purchasing Systems (DPSs) offer the ability for suppliers to self-certify making joining quick and simple at any point through the life of the DPS. 

In addition DPSs have unlimited numbers of suppliers offering buyers unrestricted access to smaller suppliers and they are not limited to a maximum term of four years. 

We currently have 25 of these open, which can be viewed on our upcoming agreements page that cover a wide range of varied services, such as learning and training, emerging technology products and service, geospatial services, research and insights, financial services, transport, utility and fuels, construction professional services and building cleaning.

How can the public sector continue to work and support SMEs in the future?

It’s important that the public sector continues to remove the barriers and increase opportunities for SMEs.

Some of the ways this can be achieved are through:

Communication

Pre engagement communication and dialogue with the supply base allows you to discuss upcoming opportunities and understand their individual business capabilities. It may highlight new solutions not previously considered in your public procurement which are more suitable and provide better value.

You should also provide feedback when a bid is not successful so they understand how to improve.

Keep things simple and streamline documentation

When you are drafting your Invitations to Tender (ITT) use clear and simple language, always writing in plain english where you can.

The best way to attract SMEs is by making your opportunity easily accessible. Although SMEs undergo the same procurement process, there are a number of things you can do to make the opportunity more attractive. Take into consideration a number of your procurement requirements and how restrictive they may appear e.g. not over specifying and adding unnecessary cost, creating suitable lotting structures, and incorporating only relevant policies and procedures.

Considering award weightings

Social value is incorporated within most tender evaluations, but you may look to amend the weightings to reflect its importance to your own organisation, just remember to not make your stipulations too onerous, as this can just add cost.

Ensure all opportunities are fair and open

Opportunities, where it is appropriate, need to fit the capacity of SMEs. Although we do acknowledge that some requirements will be too large for SMEs to respond to, you should consider SMEs responding using a consortia bid. Consortia bids offer SMEs the opportunity to work together to join commercial agreements. You can share consortia bidding guidance, which will increase understanding and provide clarity on navigating the procurement process when bidding as a consortium. 

Learn more

Visit our social value webpage or get in touch with our expert team to find out more about social value and the benefits of working with SMEs.

More: You can now find all of our Procurement Essentials articles in one place on our website.