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Publication - Report

Community benefits in public procurement

Published: 19 Feb 2008
Part of:
Public sector
ISBN:
9780755956128

This report presents the findings of a pilot programme which was intended to promote the use of 'community benefit'.

82 page PDF

600.5kB

82 page PDF

600.5kB

Contents
Community benefits in public procurement
4 The Procurement Process

82 page PDF

600.5kB

4 The Procurement Process

Public bodies are required to comply with the EU procurement rules and national procurement policies. The inclusion of recruitment and training requirements in the contract specification can be compatible with this legal/policy framework. The key requirements are set out below.

4.1 Underpinning Policy

To include recruitment and training clauses in a contract these should be part of the "core elements" of what is being purchased, central to what the contractor is expected to provide. Inclusion of such clauses is a matter for the purchasing organisation to decide, on the basis of its legal powers and policies.

4.2 The Business Case

A business case needs to be made for each significant public procurement. in relation to each element, including recruitment and training. The business case needs to showthat:

  • the requirement is appropriate and meets a legitimate and reasonable need;
  • funds are available to cover all of the costs of the requirement; and
  • that the resources are available to enable the requirement to be met ( e.g. there are trainees and training provisions that can be engaged), and for the requirement to be properly managed ( i.e. through monitoring facilities).

In the case of targeted recruitment and training ( TR&T) requirements, this would involve the contracting authority considering the full range of delivery options, such as grants and training and asking the additional preliminary question: what are the added benefits of using the approach compared with doing nothing, or perhaps seeking voluntary support after contractors have been appointed? Following this process should help to demonstrate that the purchasing body has properly considered all issues related to the requirement, and that ithas set quantifiable and achievable outcomes.

4.3 Procurement Strategy

Where Community Benefit requirements are a core element of the contract they should form part of the Procurement Strategy and be dealt with appropriately at each stage of the procurement, including:

  • any contract notice published in the Official Journal of the European Union or elsewhere;
  • any pre-qualification questionnaire (used to identify that contractors have the capacity and capability to deliver all mandatory elements of the contract);
  • the contract specification contained in the invitation to tender;
  • tender evaluation: the contractors' Community Benefit proposals should be 'scored' as part of the evaluation;
  • contract documentation;
  • partnering agreements.

If the relevant contracting authority is concerned that many of their potential pool of contractors will not have experience of responding to the community benefit requirements within a contract, then consideration should be given to inviting each firm on the tender list to attend a pre-tender meeting to discuss the purchaser's requirements in relation to this element. Depending on the available market it may be appropriate to hold such a meeting before PQQ or at tendering stage. All participants must have access to equalinformation.

4.4 Technical Considerations

4.4.1 Target-setting

Aids the adoption and delivery of community benefit requirements if these can be specified in a clear and measurable way. In addition, EU law requires that community benefit requirements must be verifiable. 19 Numerical targets are the easiest to monitor.

Therefore, a primary consideration in formulating an appropriate targeted recruitment and training ( TR&T) requirement is the setting of targets which will facilitate the monitoring of the contractor's performance. 20

The case studies demonstrate a range of ways of setting targets:

  • setting a % of the total labour time required to deliver the contract;
  • setting a specified number of beneficiaries ( e.g. employees, trainees, work placements);
  • setting a specified number of weeks of engagement for beneficiaries in the contract;
  • all opportunities to be made available, at a minimum through named sources;
  • number of beneficiary-weeks per £… in contract value (used in the Dundee social care training requirement).

The selection of the measures used depends on the context. For example, in the Raploch pilot the Stirling Western Access Road was a contract of limited duration (26 weeks) and value (about £1.3m). The contracting authority wanted work placements for recruits that would go through a bespoke pre-site training programme. It calculated the capacity of the site, negotiating this with the procurement team, and specified that 4 beneficiaries should receive a total of 52 weeks site work experience. In contrast, GHA was tendering for framework contracts where the actual volume of work to be delivered by each contractor was not known. In this context the targets had to be set in relation to a variable that would become known. The trainee target (the primary requirement) was set at 10% of the time required to deliver all of the works, plus 100% of vacancies to be notified to named agencies.

In construction contracts there is a particular problem in defining 'a job' since many people working on the site will be there for a short period and will not be a 'new employee' since their employment requires them to move between different sites on which they are contracted to work. In this context it needs to be left to the main contractors to devise a working method that will achieve the required Community Benefits.

Using 'the % of person-weeks used on the site' is a good measure in these circumstances, with the following formula being a way of setting the person-week targets for, (in this case), 10% trainees, 20% targeted recruitment and 3% work experience beneficiaries in a construction works contract. Here, labour content constitutes 40% of the works value.

Calculation of targets (construction):

A. Estimated site works value = £……………. (enterfigure)

B. Labour content: site works value x 40% = £…… (enterfigure)

C. Average gross weekly earnings in construction as published by the Office of National Statistics ( www.statistics.gov.uk) for the last Qtr + employer's on-costs = £ ….. (enter figure)

D. Total labour requirement: divide B by C = … (enterfigure) person-weeks

E. New entrant trainee target: D x 10% = …. (enter figure) person weeks

F. Targeted recruitment target: D x 20% = …. (enter figure) person weeks 21

G. Unwaged work experience placement opportunities: D x 3% = …. (enter figure) person-weeks.

If the value of the contract was uncertain the application ofthe above formula with an estimated site value of £1m would produce person-week targets per £1m in contract value. For example:

£1m would have a labour requirement of 40% (£400,000)

Total labour requirement (D) = £400,000

in person weeks _________________________

(average gross weekly earnings in construction + employee on-costs)

D would then be multiplied by the targets for new entrant trainees (E), the targeted recruitment target (F) and the unwaged work experience placements target (G).

It is important to state again that targets must be set in accordance with the capacity for targeted recruitment and training ( TR&T) in the construction part of the contract.

4.4.2 Targets - Beneficiaries

Targeted recruitment and training ( TR&T) requirements need to be few in number and well focused. There are three questions to ask:

  • what are the needs of the people/organisations that we are trying to help by including the targeted recruitment and training ( TR&T) requirements - the beneficiaries?
  • which of these needs can be met through this particular contract?
  • is there a balance to be struck between the needs of the beneficiaries ( e.g. for training and support) and the number of trainees that can be employed on the contract?

In Raploch it was recognised that the significant characteristic was the need to acquire skills and site experience. This is essentially a training need. GHA have made new entrants a key target. A new entrant is a person that is leaving an educational establishment or a training provider, or a person that is non-employed and is seeking employment, this may include on-site training and assessment, or offsite training, or a mix of these. A new entrant may not be in receipt of any training. For non-trainees, jobs have to be notified to named agencies that can provide job-matching for unemployed people with appropriate skills, but there is no 'measured target' for the recruitment of non-trainees.

4.4.3 Targets - Contractual

Members of the procurement team should be involved in setting targets. This will help them assess the risk to other key requirements of the contract, for example quality, timely completion, and cost.

Targeted recruitment and training ( TR&T) targets should be based on knowledge of costing and the labour resources, in terms of numbers, skills and training, that the contractor will need in order to deliver the contract.

The target also needs to take account of:

  • How the labour resources relate to the numbers in the relevant cohort of 'target beneficiaries'.
  • The availability of supply-side resources to enable contractors to deliver the desired volume and type ofoutput.

Some empirical information on this topic has been compiled by Sunderland Council and the topic of matching the supply of trainees and recruits with demand is being developed by the Working Ventures UK using the "Construction Skills Integrator". 22

It is important to challenge simple assumptions about the capability of the beneficiaries. They potentially include people with a wide range of capabilities. Targeting people with a low initial capability (and then supplementing this with training and support) is only one variable in setting the targets.

When setting targets, the contracting authority must take into account that these targets must be monitored and achieved and include this in the requirements specification.

4.4.4 Cost Implications

The cost of incorporating targeted recruitment and training ( TR&T) requirements will vary depending on the requirements. Key variables are:

  • whether the beneficiaries have to be employed or just accommodated for work experience or a work trial;
  • whether employed beneficiaries can be recruited from a scheme that includes a funding package, vocational training provisions, training management and trainee support;
  • the degree of pre-site training that has been completed: some GHA contractors are working with SEG 23 on 20-week bespoke training courses that mean the new entrant trainees have useful skills and are well-motivated when they are employed on site;
  • access to industry training resources for apprentices and workforce training;
  • the provision of good contacts or good quality information about the external resources that are available to help the contractor deliver the requirements;
  • funding: are the bidders given the opportunity to price for the targeted recruitment and training ( TR&T) elements in their bid and if so is this the net cost after deducting grants etc? In the alternative, are they told that they must find any additional resources?

Where the contracting authority has some input into training, care must be taken to limit responsibility for trainee capability.

4.5 The Award Process

The inclusion of targeted recruitment and training ( TR&T) or other community benefit requirements in the award process introduces the need for a new skill: evaluating bidders' tenders in response to these requirements. This has been done effectively at GHA where a scoring framework was developed by the Regeneration Team. This required them to:

  • decide what weighting should be given to each of the targeted recruitment and training ( TR&T) requirements;
  • identify what a 'good' response would be to each of the questions that were asked in the Recruitment and Training Method Statement.

The GHA approach was then shared with Raploch URC, which tailored the information, working out the weighting to be applied and what should be expected from a 'good' response.

At GHA this process was done by three members of the Regeneration Team. They developed and pilot-tested the scoring framework, and then all three team members scored each Method Statement. The final score was the average of the three assessors' scores. At Raploch (for the development partner contract) a larger group, including community representatives, was established to work up the scoring framework and then assess each Method Statement.

The scores for the targeted recruitment and training ( TR&T) elements were then combined with other quality scores to produce a total quality score for each tenderer. The weighting given to the TR&T elements varied with the number of quality matters that had to be considered.

The above approach required the regeneration or community benefit teams to apply their specialist knowledge in a new context. This resulted in a proper consideration of the work that bidders had put into the Method Statements and confidence amongst the rest of the procurement team that the scoring of the Community Benefits elements would be robust if challenged.

This degree of attention to the evaluation of the targeted recruitment and training ( TR&T) requirements at GHA and Raploch may have been due to the size of the contracts. Elsewhere evaluation does not seem to have been carried out as effectively, including where the tender evaluations were undertaken by external consultants who were not given assistance in evaluating the training requirements.

So a key lesson may be to ensure that the whole procurement team is well briefed on how to evaluate targeted recruitment and training ( TR&T) requirements in the tender.

4.6 Award criteria and negotiation

Tenders should only be assessed on clearly stated evaluation criteria. Except for wholly voluntary agreements, Community Benefits should not be negotiated after contract award.

This is important to maintain the principles of transparency and equal treatment in the procurement process.


Contact

Email: ceu@gov.scot