This Act will apply to all procurements run under The Public Contracts Regulations 2006 (the “Regulations”) which are still in the pre-procurement planning stage (ie, an advertisement has not yet been issued/expressions of interest have not yet been sought) as at 31 January 2013. It places a requirement on all public bodies who are contracting authorities for the purposes of the Regulations to consider how the services they propose to procure might improve the economic, social and environmental well-being of their area and how they might secure any such improvement when conducting the procurement process. The Cabinet Office has published this procurement policy note by way of guidance; annexed to the note are some useful case studies on how social value might be considered.

Under the Act, contracting authorities will also have to consider whether they should properly consult on these issues. The Act does not stipulate when or how this should be done, but the Cabinet Office note suggests this will be: “particularly relevant when considering procurements for services which are delivered directly to citizens. The voluntary and community sector, along with other providers and interested groups, should be engaged from the earliest stage to help shape policies, programmes and services”. Consultation may be less relevant where the service is being provided directly to the contracting authority (eg, back office functions).

The Act only applies to services contracts (including Part B services) and framework agreements (but not to call-offs under frameworks). It only requires consideration of matters which are relevant to the services procured and then only if it is proportionate to take those matters into account. The requirements to consider and consult can also be disregarded if the urgency of the requirement means it is impractical to consider them, (note that the urgency must not be caused by undue delay by the contracting authority).

Importantly, the Act does not change the obligations under the Regulations or the EU Treaty (ie, non-discrimination, equal treatment, transparency and proportionality), which must still be followed when conducting the procurement process. However, as the main obligations under the Act apply to the pre-procurement phase, it encourages best practice and consideration of social value issues at a stage in the procurement when it is easiest to take such issues into account. Even at this pre-procurement stage, however, it is still important that the issue is relevant to the services procured and is non-discriminatory.

Contracting authorities should consider referencing these requirements in their standard contracting procedure rules, in employee training programmes and in any stakeholder or service user engagement protocols. The Cabinet Office guidance also recommends keeping a formal record of steps that have been taken to comply with the Act. While the duty imposed by the Act is a only “duty to consider” rather than a “duty to act”, contracting authorities should bear in mind the risk of judicial review claims where it can be objectively demonstrated that insufficient consideration was given.