Procurement Policy Note (PPN 06/20) issued

The Cabinet Office has launched a new model for evaluating social value in government contracts in a new Procurement Policy Note PPN06/20– taking account of social value in the award of central government contracts.

Key takeaways: 

• From 24 September 2020 in scope organisations are required to familiarise themselves with the social value model at Annex A of PPN06/20.
• PPN 06/20 applies to procurements covered by the Public Contracts Regulations 2015 and applies to all Central Government Departments, their Executive Agencies and non-Departmental Public Bodies. It does not appear to apply to universities, the third sector or local authorities (although there is no reason that they could not follow it).
• The new social value model should be applied to all new in scope procurements from 1 January 2021.
• A minimum of 10% of the total procurement evaluation score should be applied to social value. This is a step change; previously, in scope organisations only had to ensure that social value was ‘considered’.
• Annex A of PPN 06/20 sets out the priority policy themes and outcomes for social value together with examples of how these could be delivered. These include Covid-19 recovery, tackling economic inequality and fighting climate change.
• PPN 06/20 does not apply if applying it would be disproportionate, irrelevant, or burdensome to authorities/suppliers.

The construction sector

PPN 06/20 states that procurements of construction, capital investment and infrastructure projects above £10m should still use the priority themes and outcomes in applying the Balanced Scorecard for Growth (PPN 09/16). However, it is not yet clear if the updated guidance on PPN 09/16 that has been promised will reflect the new policy themes in PPN 06/20.

It is also not clear whether the general obligation to evaluate social value from 24 September 2020 applies to those construction contracts. Again, more guidance has been promised soon that will hopefully clarify this.

Regardless of the application of this PPN to construction, the mood music indicates that ability to deliver social value will be an increasingly important selling point for Contractors.

A more detailed article on PPN 06/20 is available here.