Understanding the numbers gives you massive competitive advantage
I’ve looked at how Social Value (SV) scoring works and found two surprising things. One helps you win more bids. The other raises questions about value for taxpayers.
A Simple Example
Here’s a scenario to show what happens. Two bidders submit identical solutions. They both score the same on quality. But they price differently:
- Bidder A prices at £10 million
- Bidder B prices at £11 million
You’d expect Bidder A to win, right? They’re cheaper and the solution is identical.
But Bidder B is smarter about Social Value. They score full marks (10 points). Bidder A only scores 5 points. Here’s how the scoring works out:
The Scoring Breakdown
The tender uses this scoring: Quality 60 points, Price 30 points, Social Value 10 points.
| Criterion | Bidder A | Bidder B | Winner |
|---|---|---|---|
| Quality (60 pts) | 60.00 | 60.00 | Tied |
| Price (30 pts) | 30.00 | 27.27 | Bidder A |
| Social Value (10 pts) | 5.00 | 10.00 | Bidder B |
| TOTAL | 95.00 | 97.27 | BIDDER B |
Bidder B wins even though they’re £1 million more expensive and the solutions are identical.
We have to ask: is the extra Social Value worth £1 million? I think the answer is no. Let’s say Bidder B spent £100k more than Bidder A to get those extra Social Value points.
What This Means
For Bidders: Huge Returns on Investment
Smart bidders can make serious money by investing in Social Value. Look at the numbers:
- Investment: £100k to develop better Social Value
- Extra revenue: £1 million (the buyer accepts the higher price)
- Net gain: £900k extra profit
These numbers are examples, but they show the point: spending on Social Value gives you massive returns. Companies that get good at Social Value win more work and charge higher prices.
For Taxpayers: Are We Really Getting Value?
As taxpayers, we should ask if this makes sense:
- The government pays £1 million extra
- The extra Social Value probably cost £100k to provide
- That’s £900k extra we’re paying for the same solution
Can the Social Value really justify paying £1 million more? Could we get better value spending that money differently? Do we want our public sector contracts to be won on the basis of getting things not actually addressing the needs the government organisation is trying to fix? Basically, should Social Value, however worthy in principle, override the core purpose of the procurement?
Ignoring the Morality of Social Value – What To Do About It
If You’re Bidding
- Make Social Value a priority – it wins contracts
- Build real partnerships with community groups
- Track what you deliver so you can prove it
- Put resources into it – the returns are worth it
If You’re Buying
- Check your scoring makes sense
- Ask for proof of Social Value delivery
- After the contract, check if you got what you paid for
- Think about whether you’re getting true value for money
The Bottom Line
Social Value is important. It helps contracts deliver wider benefits to society. But the way we score it can lead to strange results.
For bidders, this is good news. Get Social Value right and you’ll win more work at better margins.
For buyers and taxpayers, we need to be careful. Are we paying too much for Social Value? Could we get better results spending our money differently?
I haven’t seen much debate about this. I hope this article starts some discussion among buyers and bidders.
