Creating social responsibility and value in public sector procurement

Here, Open Access Government dives into the world of public sector procurement in a Q&A with Robbie Blackhurst, founder and director of Compliance Chain

What is the current state of public procurement? Has it become more competitive and delivered better value for money to the taxpayer over the last decade?

“The public sector procurement landscape has changed significantly in recent times. The focus today is not only on managing upfront costs, but also on making a holistic value assessment that includes life cycle costs, environmental sustainability, social impact and innovation potential. This shift towards comprehensive value assessment has stimulated a more competitive environment in which contractors must demonstrate broader economic, social and environmental contributions, as well as financial attractiveness.

“The greater focus on sustainability is evident from the inclusion of social value in public procurement criteria. Furthermore, there is increasing recognition of the importance of social value and community impact, with policies requiring social benefits to be taken into account when making procurement decisions, inspired by legislation such as the UK Social Value Act.

“The implementation of digital platforms and data analytics has transformed procurement processes, increasing transparency, efficiency and informed decision-making. Moreover, there is a growing trend towards collaborative purchasing, supporting long-term partnerships that encourage shared goals, innovation and sustainability goals.

“This evolution in public sector procurement reflects a dynamic shift towards ensuring that projects not only offer financial value, but also positively contribute to achieving social objectives by supporting a competitive, transparent and collaborative procurement environment.”

What are common examples of misuse and abuse by contractors in public sector procurement and what are the potential consequences for both the public sector and society?

“In the bidding round, contractors typically bid for public sector projects with a straight stick, particularly in the case of contracts based on long-term framework agreements. In isolated cases, misuse and abuse by contractors in public sector procurement can manifest itself in a variety of harmful ways. These include substandard performance, price inflation and conflicts of interest. These practices lead to financial losses, reduce the quality and safety of projects, delay the delivery of basic services and undermine public trust in government institutions.

“Addressing these issues requires rigorous review, improved monitoring and a commitment to transparency and integrity to ensure that procurement processes are fair, competitive and effectively serve the public interest.”

How can public sector organizations strengthen oversight and accountability mechanisms to prevent and detect contractor fraud and abuse during the procurement process?

“To strengthen governance and accountability in public sector procurement – ​​particularly in the context of the UK’s new Public Procurement Act – a comprehensive strategy should include transparent procurement processes, innovative technologies, stakeholder engagement and the adoption of performance-based contracts.

“The new Public Procurement Bill, designed to reform public procurement post-Brexit, embodies these principles by proposing a more simplified and flexible regulatory framework. The framework aims to replace complex EU-derived regulations, simplifying compliance and raising standards of transparency and fairness. Key to this reform is an emphasis on increasing the transparency of public procurement processes, making it easier for suppliers to participate and increasing public understanding of decision-making processes.

“This integrated approach emphasizes simplifying the regulatory framework, increasing transparency, using technology for better monitoring and building the capacity of procurement officials. It also highlights the importance of stakeholder engagement and the adoption of performance-based contracts to ensure value for money.

“By aligning these elements, the bill aims to make public procurement more accessible, competitive and geared to deliver tangible benefits to communities, effectively eliminating the risk of fraud and supporting a more ethical and efficient procurement environment.”

What specific strategies can public sector organizations employ to ensure that procurement processes prioritize social value, alongside traditional considerations such as cost and quality?

“Prioritizing social value in public procurement means a shift towards evaluating bids and awarding contracts based not only on cost and quality, but also on their wider economic, environmental and social impacts. This approach includes a series of strategic steps to deeply embed social value in procurement processes.

“First, it is important to include specific social value criteria in tender documents and procurement guidelines. This campaign clearly communicates the importance of social values ​​to contractors, encouraging them to develop solutions that provide significant social, environmental and economic benefits. In addition, developing an evaluation framework that gives significant weight to social value ensures that these considerations are balanced by cost and quality in decision-making processes. In this way, contractors are motivated to innovate in ways that positively contribute to achieving social goals.

“Equipping procurement teams with the ability to evaluate social value propositions is another key element. This can be achieved through targeted training programs and collaboration with experts from the social economy sector, thereby increasing the team’s ability to recognize and reward proposals that create significant social impact. Moreover, collaboration with local communities and stakeholders enriches the procurement process with diverse perspectives, ensuring that projects are aligned with the real needs and priorities of those impacted by their results. This may include public consultation or the inclusion of community representatives on assessment panels, which promotes a more inclusive approach.

“Monitoring and reporting on the social value of procurement activities is key to transparency and accountability. Setting clear goals and social value metrics and regularly assessing progress not only holds contractors accountable, but also demonstrates the public sector’s commitment to broader social goals.

How are technological advances such as digital procurement platforms and data analytics supporting the integration of social value and accountability considerations into public sector procurement practices?

“Technological advances have revolutionized public sector procurement, with digital procurement platforms, data analytics, artificial intelligence (AI), building information modeling (BIM) and cybersecurity leading to significant improvements in efficiency, transparency and security.

“Digital procurement platforms have simplified the procurement process by making it accessible to a wider range of suppliers and automating the submission and evaluation of offers. This increased competition and improved operations. Data analytics supports decision-making with insights into procurement needs, supplier performance and market trends, ensuring decisions are strategically aligned with project goals. Meanwhile, BIM technology is transforming construction and infrastructure procurement by providing a digital overview of projects, improving decision-making, accuracy of cost estimates and project schedules, thereby reducing risk and improving efficiency.

“At the same time, the focus on cybersecurity ensures that sensitive procurement data is protected from cyber threats, maintaining the integrity and credibility of the procurement process. Together, these technologies have not only streamlined procurement processes, but also made them more strategic and secure, paving the way for further innovation and improvements in public sector procurement.

This article was written and provided by Robbie Blackhurst, founder and director of Compliance Chain