Community benefit clauses in public procurement in Scotland

Community benefit clauses are mechanisms by which public sector procurers in Scotland can ask their suppliers to deliver additional, social benefits to communities and society.

By Sarah Stone, December 2017

More and more public sector buyers in Scotland are including community benefit clauses in their contracts. Which means that your community benefit method statement could make the difference between your bid winning or loosing. But it's not always obvious what 'benefit' the procuring organisation is looking for, who the community are that need benefiting, or what benefit your business could provide. Here we give you an overview of Community benefit clauses and answer some of the most commonly asked questions.

What are Community Benefit clauses?

Community Benefit Clauses are clauses that feature in public sector contracts in Scotland. They are a way for the public sector to ask the suppliers they buy from to give something back to the community the goods or services are being bought for.

Where did they come from?

Community benefit clauses are a relatively new addition to public sector procurement in Scotland. They were introduced as part of new legislation, the Procurement Reform Act (Scotland), which came into effect in April 2016. The new legislation puts a legal obligation on public sector procurers in Scotland to consider how everything they buy with public money can bring enhanced social, environment and innovation benefits.

Why aren't they better known about?

In short, because they haven't been round for long enough.

The life cycle of public sector contracts is fairly long and community benefit clauses have only been appearing in contracts that have been tendered since April 2016. Public sector procurers in Scotland are realising the opportunities community benefits offer for achieving added value. They will become increasingly common as contracts are renegotiated and suppliers should expect to see more of them.

Why should suppliers pay attention to them?

Because they could win you the contract.

Community benefit clauses represents a huge opportunity for suppliers to add value to their bids and gain an edge over the competition, without impacting on price. A good community benefit clause could win a contract so if you see community benefits in the tender, particularly if it's scored, don't ignore it.

They are a real opportunity to give your bid an edge.

What is a community benefit?

A 'Community Benefit' something which will improve the economic, social or environmental well-being of a specific area or community. As a supplier, if you see a community benefit clause in the tender document think of it as the client asking:

“As well as supplying the goods or services we are asking for, what else could your business do to help the people, or area, these items are being procured for?

What does a Community Benefit clause look like?

Procurers incorporate community benefits into their tender specifications in a variety of ways. Every procurer does it differently and they can appear in lots of different guises. It is still rare to find a specific community benefit 'ask' from the procurer at the tender stage. It’s much more likely that you will see a generic statement about community benefits that you will be asked to comply with. Something like:

“Under the terms of this contract the successful supplier(s) will be required to deliver Community Benefits in support of the authority’s economic and social objectives. Accordingly, contract performance conditions may relate in particular to social and environmental considerations.”

Alternatively it's also common to be offered a ‘menu’ of community benefit options where suppliers are asked to select a number of items which add up to a specific total number of points and they choose which ones they want to offer.

It's up to suppliers to ensure community benefits are delivered and reported on.

What’s key to note is that if you are awarded the contract, it will be your responsibility to fulfil your community benefit obligations and you will need to allocate resources within your business for that. If we continue with the example above you would need to not only create the job but also find suitable candidates.

You will also need to consider how you will monitor progress and report back to your client on community benefit clause outcomes.

Further information

This guide has been produced for procurers but it's got lots of useful information in it and is also helpful for suppliers to get into the mind of your client and really understand where they are coming from.

Information on Community Benefits provided by the Scottish Government

We specialise in identifying and designing benefits which will match your client's needs and provide maximum value to communities at a minimum cost to you. So everybody benefits.

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