To support October’s Procurement Policy Note 16/15, the government has produced a practical guide on incorporating social issues in major projects with a significant steel component, where the overall project requirement has a capital value of £10 million or more. The key principles of the guidance are, however, relevant to any major procurement project involving materials.
It applies to all central government departments, their executive agencies and non departmental public bodies and primarily places obligations on contracting authorities relating to social issues in respect of their contractual agreements with Tier 1 suppliers but, where the steel component is being sourced at a level deep into the supply chain, authorities are required, where appropriate, to ensure that Tier 1 suppliers have a credible supply chain plan, and pass down the relevant requirements through contract conditions.
The government intends to complement this guidance through the development of a “Balanced Scorecard”. In the chosen evaluation approach established criteria such as price are balanced against more complex issues such as social and environmental consider- ations. The guidance says that it is essential that in consideration of social issues in steel procurement, contracting authorities take full account of the government’s overarching value for money policy for all procurement projects. The business case value for money assessment should be in respect of the whole life of the project and contracting authorities should also take into account costs and benefits to society as a whole, not simply those directly relevant to the contracting authority. Examples of social issues or objectives that may be relevant to major projects with a significant steel component include sustainable sourcing, supply chain management, skills and training development, long term unemployed, health and safety and diversity of supplier base.