Guidance

Social value in MoD Procurement

Published 30 September 2025

1. Summary

This document provides a comprehensive overview of the integration of social value within Ministry of Defence (MoD) procurement processes. It outlines key terminology, policy changes under the Procurement Act 2023, and the MoD’s priorities for social value. The content is derived from a presentation by specialists in procurement and social value, and is structured to support suppliers in understanding and responding to social value requirements in MoD tenders. The document includes practical guidance, common pitfalls, and actionable steps to enhance social value contributions in defence contracts.

2. Terminology

• Social Input - The income and in-kind support into an organisation that is used to deliver the outputs

• Social Outputs - The activities that organisations deliver (number and frequency)

• Social Outcomes - The change that the activities have on stakeholders

• Social Impact - The difference that the organisation makes that benefits society

• Social Value - The financial and non-financial value to society that the impact makes

• Local Value - The value created within a Community/Local Authority/IMD postcode area

• Social Worth - The legacy to stakeholders

• Value Capital - The legacy for society

3. Where is the value?

3.1 Direct Value

• Financial Benefit = Economical Value (Savings) ​

• Time and Capacity = Resource Value (Savings) ​

• Local Investment and Development = Sustainable Value​

• Individual Emotional, Psychological and Physical Change = People Value​

• Community and Social Change = Societal Value (Positive Change)​

• Knowledge and Skills = Learning Value

3.2 Indirect Value

• Trust and Transparency = Shared Value ​

• Partnership = Relationship Value​

• Leadership = Ethical Value​

• Environmental = Planet Value​

• Culture = Legacy Value​

• Equality, Diversity and Inclusion = Equal Value​

• Innovation = Development Value​

• Organisation = Brand Value

3.3 Challenges

• Limited Understanding​

• Inconsistent Understanding and Implementation​

• No longer General/Boiler Plate​

• Whose value is it anyway?​

• Contract Specific​

• Positioning

3.4 Weighting

• Minimum weighting of Government Tenders (MOD): 10% +

• The weighting applied by Local Authorities and Government Agencies: 20% +

• Maximum weighting of Government Tenders (IT Framework): 60%

3.5 The Difference

Framework

• Organisational position, compliance, and commitments linked to securing new business are required.

Direct Award

• Focused on developing and delivering contract-specific value during the contract period. Commitment focused.

Supply Chain

• Linked to partner requirements and contracting authority. Commitment focused.

Central Government

• Focused on qualitative value and policy outcomes, Commitment focused.

Focus on:

• ‘80/20 Rule’

• ‘Only value created through the contract counts’

3.6 How can you compete?

• Small Change, Big Impact

• Agile and Fast-moving

• Local and Connected

• Relevant and Proportionate

• Focused on Future

• Slow Start, Big Finish

3.7 Procurement Act 2023

• Purpose: Modernise and streamline procurement processes, emphasising public benefit and social value.

• Public Benefit as a Priority: The Procurement Act shifts the focus from the Most Economically Advantageous Tender (MEAT) to the Most Advantageous Tender (MAT).

• Transparency and Accountability: It will ensure that social value commitments are monitored and reported throughout the contract lifecycle, with the public having access to these details. Suppliers will be held accountable for delivering on their social value promises, and non-compliance may result in public exposure of failed outcomes​.

• Emphasis on Sustainability and Social Impact: Alignment with the Social Value Model.

• Flexibility for Social Enterprises and SMEs: The new regulations aim to reduce barriers for smaller businesses and social enterprises by simplifying the procurement process.

• Reserved contracts for public procurement, specifically for social enterprises, cooperatives, and SME suppliers.

• Flexible thresholds, enabling contracting authorities to make decisions that favour local businesses or social enterprises.

• Public sector bodies are encouraged to engage early with smaller suppliers.

• Required to provide more targeted guidance and support to smaller suppliers, helping them to demonstrate their social value and sustainability credentials.

• Encourage contracting authorities to engage with local supply chains, prioritising suppliers that have strong ties to the local economy.

3.8 MOD Priorities

• Tackling Economic Inequality: Creating opportunities for SMEs and disadvantaged groups.

• Fighting Climate Change: Reducing carbon footprints and advancing green technologies.

• Equal Opportunity: Supporting diversity, equality, and fair treatment in supply chains.

• Well-being: Enhancing mental and physical health for communities impacted by defence activities.

• Community Cohesion: Building stronger relationships between military and civilian populations.

3.9 Theme: Tackling Economic Inequality

• Create opportunities for entrepreneurship and help new organisations to grow, supporting economic growth and business creation.

• Create employment and training opportunities, particularly for those who face barriers to employment and/or who are located in deprived areas and for people in industries with known skills shortages or in high-growth sectors.

• Support educational attainment relevant to the contract, including training schemes that address skills gaps and result in recognised qualifications.

• Create a diverse supply chain to deliver the contract including new businesses and entrepreneurs, start-ups, SMEs, VCSEs.

• Support innovation and disruptive technologies throughout the supply chain to deliver lower cost and/or higher quality goods and services.

• Support the development of scalable and future-proofed new methods to modernise delivery and increase productivity.

• Demonstrate collaboration throughout the supply chain and a fair and responsible approach to working with supply chain partners in the delivery of the contract.

• Demonstrate action to identify and manage cyber security risks in the delivery of the contract including your supply chain.

3.10 Method Statement

• ‘Method Statement’, stating how you will achieve this and how your commitment meets the Award Criteria?

• How will you manage your performance, including underperformance and partners?

• A timed project plan and process, including how you will implement your commitment and by when?

• How you will monitor, measure and report on your commitments/the impact of your proposals?

• timed action plan

• use of metrics

• tools/processes used to gather data

• reporting

• feedback and improvement

• transparency

3.11 Common Mistakes

Common mistakes to avoid:

• business as usual

• They will not check

• Historical delivery

• Focus on donations/volunteering

• No geographical focus

• No strategic alignment

• Local needs analysis

• No ownership or responsibility

• Social Value in isolation

3.12 What does good look like?

• 80/20 rule

• Contract-specific requirements

• Roles and responsibilities

• SMART targets

• Align to strategic objectives

• Performance management

• Balance quantity and quality

• Transparency and validation

3.13 Quick Wins

• Executive Sponsor and Social Value Lead​

• Cross Department Development Group​

• Social Value Identify and Legacy​

• Social Value Theme owners​

• Establish UK-specific Key Value Indicators​

• Partnerships ​

• Expenditure profiling and auditing​

• Staff profiling​

• Standards/Initiatives

   - Fair Payment Code​

   - Mental Health at Work​

   - Disability First​

   - Race at Work​

   - Gender Pay gap reporting​

   - Buy Social​

• Social Value Standard

3.14 Action Plan

• Create a social value definition and legacy statement

• Strategic sponsorship, not donations

• Commit to Carbon Net Zero 2038/Monitoring

• Recycle electrical equipment/energy efficient

• Be ‘code efficient’ and engage environmentally friendly data centres

• Manage travel – Go Virtual

• Commit to ‘skilled’ mentoring and ‘skills exchange in commitments

• Commit to unconscious bias, mental health at work training

• Commit to research/maintain sector average for protected characteristics

• Create a modern slavery policy and publish

• Commit to ‘buy local and social’

• Map your supply chain: where are they, what type, and how much?

• Create Procurement assessment criteria

• Supply research – Environmental, social, and ethical credentials

• Sign up for Fair payment code

• Confirm/commit to living/real living wage

• Commit to equal pay for gender/ethical

• Define/commit to mandatory and non-mandatory training

• Know the value of actions

• Align to:

• Fair Payment Code

• Mental Health at Work

• Disability First

• Race at Work