In today’s procurement environment, evaluating suppliers against the classic Five Rights: price, place, quality, quantity and time, is no longer enough. Modern procurement strategies must also account for social value in procurement, ensuring that decisions deliver not only financial efficiency but also positive outcomes for society and the environment.
By integrating social value into procurement, organisations can build stronger, fairer and more sustainable supply chains. It’s about using buying power to make a real difference, supporting communities, improving well-being and driving long-term environmental responsibility.
What Is Social Value?
Social value is the positive impact or added benefits that a supplier generates in their community beyond the provision of their expected goods or services.
Figure 1: Social Value Diagram
Evaluating Social Value in Supplier Selection
Whilst it is relatively straight forward to add social value to an evaluation criteria and include it on a weighed scorecard, do we really know what we should be looking for and evaluating against?
Criteria that relate to social value that we can asses incumbent or potential suppliers on can include the following factors:
- Employee well-being
- Community engagement
- Sustainability
When evaluating a supplier, a potential question in the PPQ (pre-procurement questionnaire) could relate to staff retention, staff churn or staff sickness/accidents. The overall physical, mental and social health of the supplier’s employees is relevant to the broader supply chain.
Social Value in the Public vs Private Sector
Employee well-being contributes to social value by ensuring a consistent, happy and productive workforce. This, of course for procurement relates to lower risk and a higher chance of continuity of supply.
Community engagement relates to the opportunities of local people having a say in an organisation’s projects and operations. All suppliers should ideally be giving something back to the community as well as ensuring its well-being.
A supplier could involve the community in new business ideas to gain feedback to ensure no detrimental effects could present themselves.
A supplier could sponsor a local sports team, plant flowers in park, engage in litter-picking etc. All these activities contribute positively to the community and show the suppliers taking care of their stakeholders.
Evaluating sustainability as part of social value relates to how the supplier affects the planet. Is the supplier replenishing any raw materials that they may use in their supply chain? This could be at a local level i.e. a supplier may make timber products and be involved in a tree planting project or on a global level, a supplier may be manufacturing using plastic but gathers their plastic from waste dumped in the sea.
Evaluation criteria as a percentage on a weighted scorecard varies greatly but commonly is around 20% of the overall award score.
Whilst there is no legal requirement in the Private sectors against which criteria suppliers should be evaluated against it is good practice to include social value and the positive outcomes it can bring.
Figure 2: Outcomes of a social value approach
Building Sustainable Supply Chains Through Social Value
In the Public Sector social value is a mandatory consideration in accordance with the Public Services (Social Value) Act 2012. This Act requires all public authorities in England and Wales to consider “how what is proposed to be procured might improve the economic, social and environmental well-being of the relevant area and how, in conducting the process of procurement, it might act with a view to securing that improvement.”
Moving forward, as we continue to develop the procurement function, it is imperative that we include social value considerations as part of our remit to ensure that we work with sustainable suppliers that can supply us with both our core requirements but also other factors that will add value to the process for a variety of stakeholders and the planet.
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