To consider a report by the Executive Director (Corporate Development S151).
The Committee considered a report by the Executive Director (Corporate Development S151) which provided a proposal that the Council considered, as part of the Procurement Strategy, a corporate approach to social value to assist maximising the Dorset Pound through procurement outcomes.
The Portfolio Holder for Finance, Commercial and Assets explained that the report was seeking members' views on proposed ways of calculating and encouraging social value from procurement. He recognised that a balance needed to be struck between price and social value and he welcomed comments. The Executive Director added that the Strategy would be considered by the Cabinet in March 2020.
The following points were made in discussion:-
· that a small number of contracts were won or lost on a 5% margin, that this was not monitored and that a more consistent approach across the Council was being sought;
· that when a tender was being considered early market engagement was being undertaken to better understand the market and competition in order to help identify criteria and thinking on social value;
· that national guidance was available on how to use social value and bigger contracts could be broken down into smaller lots which were more attractive to smaller and medium sized enterprises in Dorset.
· the law stated that social value had to be considered when procuring but companies outside of Dorset could score as well as local companies with regard to social value.
· supplier engagement and understanding the market shaped procurement;
· that unsuccessful Dorset companies received feedback as to why they were unsuccessful so that they were better able to tender in future.
· the procurement and evaluation process needed to be able to balance tenders from local firms with their smaller travel and transport costs against economies of scale from larger companies;
· the Council's diverse procurement needs meant that social value could not be fixed;
· the need for a clear definition of the Dorset Council area should be included in the Strategy;
· that any joint working with Bournemouth, Christchurch and Poole Council would need to be agreed separately;
· whether there was a reverse incentive with regard to the green and sustainable category in that a company being carbon neutral might not get as many social value points as a company using older vehicles which could improve it carbon emissions performance;
· whether the cost of tendering could be reduced to make them more accessible to smaller businesses;
· the Dorset Care Framework was open to new suppliers who could bid for work as it was advertised with a lighter touch approach;
· to attract small businesses the procurement process needed to be as simple as possible;
· that all people who produce goods got a fair price and for these companies to be sustainable and resilient;
· need to make sure procurement was legal and that small businesses were not put off by the tendering process being over-complicated;
· the national push for social value and for the profile of it to be raised within the Council in order for there to be better outcomes for Dorset and its residents.
Members were thanked for their comments and areas identified for further exploration. The Committee would scrutinise the draft Strategy before it was considered by cabinet.
1. That the Council establish a Procurement Strategy that sets out key principles and actions to embed practical and effective commissioning for social value in every aspect of its procurements, commencing (as the Public Services (Social Value) Action 2012 requires) at the pre-procurement stage.
2. That the above comments be considered as part of the development of the Strategy.
3. That the draft Strategy.be scrutinised by the Committee before it was considered by Cabinet.