PPN 002 (PA 2023)

PPN 002 Taking account of social value in the award of central government contracts

In: Define > Assess the market

Overview

This PPN applies to all central government departments, their executive agencies and non-departmental public bodies when conducting procurements under the Procurement Act 2023. Such bodies are referred to as 'in-scope organisations’. This PPN does not apply to private utilities contracts or to the Ministry of Defence in relation to defence and security contracts as defined by section 7 of the Procurement Act 2023. Other public sector contracting authorities may wish to apply the approach set out in this PPN.

This PPN updates the Social Value Model (the ‘model’) to deliver social value through government’s commercial activities, noting that in-scope organisations should evaluate social value in all in-scope contracts where the requirements are relevant to the subject-matter of the contract, proportionate and comply with the principles of equal treatment and non-discrimination. Where applicable, this aligns with their obligations under Section 1 of the Public Service (Social Value) Act 2012.

The social value model (the ‘model’) is a procurement tool that sets out how contracting authorities can contribute to the government’s missions by including social value requirements that can be delivered when a supplier delivers government contracts. Using the model, commercial teams should select outcomes that are relevant and proportionate to their procurement.

Application of the model will be mandatory for in-scope organisations but commercial teams retain flexibility in deciding which of the outcomes should be applied to their particular procurement to ensure relevance and proportionality and may refine the model question, award criteria and sub-criteria to ensure they are relevant to the subject-matter of the contract, proportionate and comply with the principles of equal treatment and non-discrimination.

Detailed guidance on how to use the model, including a menu of social value options, is available in PPN 002 and the accompanying Guide to Using the PPN 002 Social Value Model to which in-scope organisations should refer.

Note: This PPN replaces PPN 06/20 for procurements commencing on or after 24 February 2025.

Objective at this commercial stage

In-scope organisations should determine the market characteristics and the cost structure of what is proposed to be procured (e.g. is three a high proportion of labour or bought-in costs, which might lead officials to consider labour or supplier chain criteria in the model) and the maturity in terms of its capacity to deliver social value outcomes which are relevant to the procurement and proportionate to the contract.

Key considerations at this commercial stage

In-scope organisations should:

  • engage with the market to assess its capacity to deliver on potential social value requirements by reference to considerations such as market maturity, market make- up, supply chain structure and competition in the market
  • ensure that engagement with the market in relation to social value is conducted fairly and transparently

This content is under development.

Read the PPN

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