The Procurement Framework for Jobs and Skills

Summary - West Midland’s ‘A Guide to the Procurement Framework for Jobs and Skills’

The NIEP has adopted the West Midlands Economic Inclusion Panel’s A Guide to the Procurement Framework for Jobs and Skills which describes several approaches to securing greater access to jobs and training opportunities for local people, increasing engagement of SMEs and improving access for local businesses on public sector contracts.

The Guide offers flexibility through the use of four approaches; Charters, Voluntary Agreements, Specific use of Contract Clauses and Strategic Application of Contract Clauses.

This summary highlights:

1.       The Four Approaches

2.       Steps to incorporate ‘Jobs & Skills’ in public procurement

3.       Recommendations for improving SME engagement

EU Legislation

European case law has commented on the use of social and environmental clauses in public contracting and the following good practice can be drawn:

·         It is possible to include jobs and skills requirements in public procurement provided non-local bidders are not disadvantaged, for example by requiring them to have knowledge of the local labour market, or a local base, or use local material;

·         Social requirements that address an organisation’s policy objectives  are allowed: they do not need to provide a financial or service benefit to the organisation – they can for example benefit the wider community;

·         All requirements must be able to be measured and their delivery verified.

For more detailed information, model text and case study examples, the complete West Midlands guide is available on the NIEP website by following this link: http://www.niepbuiltenvironment.org.uk

1.   The Four Approaches

Approach 1: Charters

Whereby public sector organisations share their strategic priorities and goals (specifically around worklessness) with current and prospective suppliers; encourage the adoption of exemplar behaviours and practices and look to develop new customer-supplier relationships.

Approach 2: Voluntary Agreements

Whereby public sector organisations work with their existing contractors to secure commitments to specific jobs and skills outcomes over a specified time period, with support provided to contractors by a range of agencies.

Approach 3: The Specific Use of Contract Clauses

Whereby public sector organisations include jobs and skills clauses within specific procurement exercises leading to contractually agreed outputs and outcomes.

Approach 4: The Strategic Application of Contract Clauses

Whereby organisations adopt a ‘default’ position that jobs and skills  requirements will be routinely considered for their relevance to all stages of each and every commissioning and procurement exercise.  In addition, they commit to measure, on an ongoing basis, the percentage of contracts and the proportion of expenditure to which such clauses apply, and to track outputs and outcomes.   Approach 4 ensures that jobs and skills contract clauses are always considered.

2.   Steps to incorporate Jobs & Skills in Public Procurement

A public body wanting to use any of the four approaches contained in the Guide will need to be clear about the outcome it is seeking to achieve.

There needs to be clarity about the purpose of including ‘jobs and skills’ requirements in its contract and how this relates to the objectives of the procuring body.

Objectives of Procuring Body

Best Value and Continuous Improvement

Increasing the skills and productivity of the workforce - provide new entrant opportunities for apprentices and trainees, or individuals returning to the labour market after an absence.

Ensure that some or all of the supply-chain they utilise are providing training for their workforce and/or new entrant opportunities (which is especially important where most of the contract is sub-contracted).

Social Inclusion

Social inclusion benefits are achieved by providing employment and training opportunities for people from target communities.

Equal Opportunities

Actions to achieve this would not be focussed on the provision of ‘new’ job or training opportunities, but improved access to those that arise in the course of the delivery of a contract.

e.g. through the implementation of an Equalities Action Plan.

Promoting Local Business

Supporting the development and growth of locally-based businesses – especially SMEs – may be seen as a way of securing additional job and training opportunities for the community.

The Local Impact

Charters and compacts that include a commitment to promote the use of local supply chains, and the development of registers of local businesses that will help contractors to identify local suppliers will help support this policy objective. A charter that also includes a commitment from local firms to target their recruitment can also contribute to tackling social inclusion.

STEP 1 - Adopt Clear PoliciesTargeted Recruitment and Training (TR&T) needs to be included in the organisation’s Procurement, Corporate and Community strategy including reference to:

STEP 2 - Developing the Business Case

·         Creating a budget that could cover facilitation and advice, monitoring and progress-chasing, and contributions to training costs

·         Defining project requirements, ensuring there is a clear and agreed understanding of the business goals

·         Defining contractors’ requirements to meet those goals

·         Assessing the extent to which the procurement could contribute to community benefit objectives to the purchaser's policies and strategies

STEP 3 - The OJEU Notice

The use of social considerations in contract conditions must be mentioned in the OJEU Contract Notice for the contract. 

STEP 4 - The Prequalification Questionnaire (PQQ)

TR&T and social inclusion should be included in the sections that deal with technical capacity and ability.

STEP 5 - Preparing the  Specification / Invitation to tender (ITT)

Detailed requirements of the social/community benefits (ideally based on the business case) need to be included at this stage. Determine what training and employment (or wider community benefit) requirements are appropriate and deliverable i.e.:

·         A minimum number of person-weeks of employment provided for a new entrant trainee recruited from an agreed source 

·         Agreement to recruit people who are disadvantaged in the labour market

·         Unwaged work experience for students to obtain some work experience, for unpaid work-trials or short-term paid work experience

·         Workforce training to ensure opportunities for continued training for ‘new trainees’ and to help achieve a fully accredited workforce

·         Training plan for each new trainee

·         Skills forums to support the work of the relevant industry training forum in the locality of the contract

STEP 6 - Developing and Award Process

·        Bidders should be asked to submit a method statement with their tender, setting out how they will achieve the social requirements.

·        If these are seen as core, the method statement can be scored and used in the award;

·        the weighting given to that statement needs to be agreed early on in the process; and if these are seen as non-core, the method statement should not he scored.

STEP 7 - Implementing Contract Conditions & Monitoring Frameworks

Specific contract conditions can be developed on a project by project basis.  In procurement processes that allow scope for negotiations (for example based on a service delivery plan or method statement, specific clauses can be incorporated into contract documentation, to tie the contractor to specific targets and outcomes.

3.   Recommendations for improving Small, Medium Enterprise (SME) engagement

SMEs typically constitute a very large proportion of any market or sector. In 2008 sole traders made up nearly three quarters of all UK businesses, with enterprises with fewer than 10 employees making up a further 10%. More than half of all employees are employed by an SME.   These potential suppliers can offer the public sector innovative, value for money and responsive solutions to their commissioning and procurement needs.

‘The Glover Report: Accelerating the SME economic engine: through transparent, simple and strategic procurement’ [1]noted that small firms faced substantial hurdles to compete on an equal footing with larger enterprises in the public sector marketplace.  Consequently small firms often lose out and Government misses the opportunities for innovation and better value for money that small firms can provide. 

SMEs are generally understood to include: ·         micro-businesses: with 10 or fewer people, and/or an annual turnover of no more than £2m; ·         small businesses: with 50 or fewer people, and/or an annual turnover of no more than £10m; ·         Medium-sized businesses: with 250 or fewer people, and/or an annual turnover of no more than £50m.

The Guide has a series of recommendations  to improve SME participation including some of those stated in the Glover Report:

·         Equal opportunities by making subcontracting opportunities more visible - contract opportunities to be advertised electronically and accessed through a single, free, easy to use local online portal

·         Reducing the cost and/or burden of participating by ensuring, where possible, that the size of the contract is not an obstacle in itself to participation by SMEs, by giving sufficient time to prepare bids, by ensuring payment on time, by setting proportionate qualification and economic requirements

·         Simplifying and standardising tendering requirements where possible. Any qualification criteria that are not sector-specific should be standardised and incorporated into all PQQs

·         Frameworks include jobs and skills clauses linked to a contractually agreed set of outputs and outcomes

·         Commit to a programme of ‘Meet the Buyer’ events arranged by the procuring body

·         Where tendering opportunities are thought to be especially suitable for SMEs (or SME consortia), this should be flagged during the advertising process

·         Training provided for SMEs on collaborative working and tendering documentation requirements

·         Monitor the percentage of contracts, or overall contract values, secured by SME suppliers and report progress against ‘SME engagement’ Key Performance Indicator