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20 November 2020 | Comment | Article by Richard Macphail

How procurement processes can be designed to promote well-being

Public bodies in Wales spend over £6 billion each year procuring a range of goods, services and works. Imagine what it could mean if this money was being spent on buying things AND improving the economic, social, environmental and cultural well-being of people and communities in Wales?

Adopting this thinking, the Well-being of Future Generations (Wales) Act 2015 (“the Act”) requires public bodies in Wales to think about the long-term impact of their decisions. As we continue to experience a cultural change with greater emphasis being placed on issues such as climate change, equality and modern slavery, the Act should be seen as a key pillar in the framework of public procurement legislation applicable in Wales.

For public bodies to meet their obligations under the Act, community benefits must be a key consideration when planning a public procurement in Wales and should be applied where such benefits can be realised. The Act requires that where possible, public bodies must identify any opportunity to deliver one or more of the following benefits during the course of a contract:

  1. Job and training opportunities for economically inactive.
  2. Promotion of open and accessible supply chains.
  3. Contribution to education in Wales through engagement with school, college and university curriculums.
  4. Contributions to community initiatives.
  5. Opportunities to minimise the environmental impact of the contract and to promote environmental benefits.

Once an opportunity has been identified, public bodies are required to ensure that delivering that opportunity remains a key consideration. For example:

  1. A bidder’s ability to deliver any of the above opportunities may form part of the selection criteria used shortlisting bidders.
  2. Public bodies should consider whether it is appropriate to reserve a right to disqualify bidders from a procurement if they are unable to deliver community benefits.
  3. When evaluating bids at the award stage of the procurement process, the ability to deliver the relevant community benefit may form part of the award criteria.
  4. To ensure that the successful bidder delivers on the opportunities identified, specific contract clauses linked to well-being objectives/goals could be included in public contracts and frameworks, using social value measures to capture impact.

However, it is not as simple as following points one to four above in respect of all public procurements. The Public Contracts Regulations 2015 (“the Regulations”) limit the selection criteria that public bodies can adopt and require award criteria to be linked to the subject matter of the contract. Any decision to disqualify must be rational, proportionate, and linked to the requirements of the competition. There is, therefore, a tension between the requirements of the Act and the requirements of the Regulations meaning that contracting authorities need to give careful consideration in each procurement to how they will meet their obligations under both pieces of legislation. In some cases, it may be very difficult to reconcile the requirements of the Act with the Regulations if there are not clear links between the requirement tendered and the community benefits desired.

If you would like your procurement documentation reviewed, or otherwise receive advice regarding how community benefits should be incorporated into the procurement process, please get in touch with a member of our corporate and commercial departments.

Author bio

As Head of Social Housing and Partner in the Commercial Property team, Richard acts for a wide range of clients and advises on all aspects of commercial property law in both private and public sectors. He is known for quality of service and his ability to apply technical legal expertise with a practical and commercial focus.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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