The Procurement Act 2023 is just a few months away from being enacted and those who work in the public sector are getting ready for the changes it will bring. One change that is getting rather a lot of attention is the increased emphasis on social and environmental criteria in contracts. The new approach to…
The Procurement Act 2023 is just a few months away from being enacted and those who work in the public sector are getting ready for the changes it will bring.
One change that is getting rather a lot of attention is the increased emphasis on social and environmental criteria in contracts.
The new approach to corporate responsibility and greater weighting of sustainability strategies shifts the tender assessment method from the Most Economically Advantageous Tender (MEAT) to the Most Advantageous Tender (MAT).
We’re going to explore how the focus on corporate responsibility affects suppliers and other parties in public-sector procurement in the UK.
There is a key difference between MEAT and MAT, but before we get there, let’s take a deeper look at each assessment method and what they mean to public procurement.
The idea of the Most Economically Advantageous Tender comes to us courtesy of the European Parliament, where it was intended to make public procurement processes fairer and more transparent, allowing more suppliers to enter the market.
At that stage, the UK government was still an EU member, so it adopted the MEAT method, adapting it to fit the UK public sector in the Public Contracts Regulations 2015. The Regulations established assessment criteria to help suppliers develop bids that more accurately incorporate the contracting authorities’ needs in their tender proposals.
Contracts are awarded on a cost-effective basis, with buyers devoting their primary focus to value for money rather than the value of social and environmental responsibility.
It’s also mandatory for contracting authorities to clearly state the criteria and sub-criteria in the contract, as well as the weightings and sub-waitings attached to each requirement.
After Brexit, the UK government wanted to distinguish its procurement procedures from the EU, while also simplifying the process to encourage more suppliers, especially SMEs, to enter the public sector procurement market.
This brings us to the Procurement Act of 2023, which is largely based on the World Trade Organisation’s Government Procurement Agreement (WTO GPA), which is how we get to …
The Most Advantageous Tender is in line with the WTO GPA and was first introduced to the UK public sector in the Green Paper Transforming Public Procurement (December 2020). The intention was to give buyers more leeway when awarding contracts while saving costs along the procurement cycle and working towards sustainable development in corporate governance.
According to the Green Paper, MAT enables buyers to include criteria that go beyond the crux of the contract. Among other things, this encourages suppliers to conduct their business operations in an ethical manner that contributes to the country’s economic, social, and environmental outcomes.
Such initiatives go under the social value umbrella and are measured by the positive impact suppliers and buyers have on their local communities. Value (positive impact) is divided into social, economic, and environmental categories:
According to some experts, the difference between MEAT and MAT isn’t that significant. They’ve even referred to the difference as a matter of semantics or degree of emphasis. MAT simply emphasises environmental, social, and economic responsibility more than MEAT.
The MEAT approach does make provision for alternative evaluation criteria and their weighting. But, the assessment falls within the price/quality ratio and isn’t evaluated as a completely separate factor. Other than pricing and ethical responsibility, there is very little emphasis on each of the remaining criteria in the contract.
On the other hand, some experts argue that the difference is significant because it adds a new dimension to tender evaluation. MAT means that, when appropriate, pricing needn’t be a determining factor in awarding contracts.
Instead, economic, ethical, and social responsibility can be the basis for a decision.
The great thing about this for buyers is that the necessity to outdo the competition drives suppliers to be ever more innovative, creative, and invested in local charities, for example, donating money, and more importantly, time and effort to worthy causes. Buyers get a lot more out of their contracts without necessarily paying higher prices.
Industries also benefit from rapid service and product development, and more sophisticated software and technology, driving even further innovation in their fields.
Suppliers benefit because the better and more innovative their services and products the greater their competitive advantage and the more attractive they are to a growing number of contracting authorities.
One of the MEAT drawbacks is its perceived barriers that prevent SMEs (small individual companies) from participating in the market.
MAT is designed to remove the barriers, level the playing field, and encourage small businesses and startups to enter the public procurement market.
Their unique skills fill critical gaps in procurement, especially when it comes to social value and sustainable development. This is because local suppliers know what challenges plague their communities and can provide solutions that are entirely pertinent to their needs.
This is Advantageous to suppliers.
Another benefit for suppliers is access to low-value contracts that match their budgets and capabilities. SME suppliers needn’t worry about competition with big enterprises for the simple reason that big businesses don’t find low-value tenders worth their time and energy.
However, if big organisations do bid on low-value contracts, SMEs still have an advantage because they tend to be more flexible and adaptable than their larger counterparts.
These are two important factors in public procurement that contracting authorities use in their MAT assessment.
The benefits keep coming.
Low-value contracts are also perfect for suppliers to rehearse their tender submission process. They enable suppliers to fine-tune their procurement management, laying a strong foundation to launch SMEs into the space where they can bid on larger, more lucrative tenders.
Well, to borrow a term from above, it’s got a lot to do with emphasis.
Instead of focusing primarily on economic benefits, like the cost-effectiveness of solutions, attention can shift to other factors.
For instance, the contract could be for hospital stationery, which your company can provide. However, you have also developed a revolutionary new manufacturing process for pencils that uses alternative energy sources only and results in operational cost savings of 50%.
Punting this type of innovation and industry leadership in marketing campaigns will generate more positive attention than simply providing the stationery, even at a discounted rate.
In fact, a second supplier might offer a discount that is lower than your bid, even with operational cost-savings thrown in. However, buyers like innovation because it makes them feel dynamic, fresh, bright, and new. This means that you still stand a good chance of being chosen above all others.
How great is that for your company’s brand image?
Marketers also have another avenue to promote, and that is corporate social responsibility or social value.
You can provide all the stationery required, but you also have a positive impact on the community by donating stationery to underprivileged schools and sponsoring community vegetable gardens.
Your commitment to worthy causes gives you a better chance of winning a contract than the supplier with an amazing discount.
Because you tick the social value boxes, twice! Your CSR initiatives help government bodies meet social, economic, and environmental sustainability objectives set by Parliament.
It’s especially beneficial if your social value or CSR strategy boosts local government bodies’ commitment to reduce greenhouse gas emissions and achieve a net-zero carbon footprint.
Adapting to the Procurement Act’s new holistic approach to contract evaluation is something that your internal procurement team can manage on its own – provided there isn’t anything else, like marketing, to distract them.
Outsourcing your B2G marketing requirements to industry specialists, like Cadence Marketing, is the best way to forge ahead, knowing your marketing strategy is safe in capable hands.
Contact Cadence Marketing and book a free consultation with one of our marketing experts. Find out why you can confidently trust our record for B2G marketing success.
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