Don’t Forget About Social Value in Contracts

Drawing up contracts is a vital part of many business activities – but as time goes by, it’s becoming more and more important to ensure your contracts also cover the social value of the agreement. With this thought in mind, today, we are looking at how social value in contracts could help support your business – and why this is important, anyway.

What is Social Value in Contracts?

What is social value in contracts? Social value is a measure of the benefits your business provides to a community – normally locally – through its work. Social value in contracts specifically relates to the terms of the contract and how these support the provision of social value through the contracted work – for example, how a building and development agency might deliver social value to your community while working on a construction project.

Social value typically covers three key aspects: social, environmental, and economic benefits. These three factors combined help to provide a quantifiable social value score. In turn, this allows businesses to quickly understand whether they are doing enough to deliver social value to their communities. This may also provide a direct and simple comparison between competitors.

As per the Social Value Act of 2012, it is a legal requirement for all businesses working on public projects to deliver social value.

Is Social Value Important in Contracts?

Social value is massively important in contracts – but many businesses and contractors alike overlook this. Nevertheless, by clearly defining social value in contracts, both parties can agree on a practicable and attainable social value aim.

For the Business

As a business, delivering social value is a vital part of gaining support for new projects from the local community. Whether it’s in the form of providing new working opportunities for community members or if it’s investing in new local opportunities, businesses can benefit significantly from defining their social value expectations from contractors in contracts.

For the Contractor

Social value in contracts is hugely important for contractors, too. This is especially true for contractors applying for governmental contracts, which now require a social value to be a significant part of the contractor’s bid. Moreover, defining social value in contracts allows the contractor to know what is expected of them by the business through their work.

How to Increase Social Value When Creating Contracts

When creating contracts, we strongly recommend including provisions that define the social value expectations of the work. Indeed, if a business signs a contract with a contractor and then asks them to deliver social value after the contract is signed, this may be outside the scope of the contractor’s work. Meanwhile, for the contractor, having signed contracts can help protect them from being constantly requested to provide new, ever-greater social value projects – which, though good for the community, could make a project unfeasible for the contractor.

Final Thoughts

Social value is something that we often overlook in the modern age – however, it’s massively important to consider how social value in contracts could apply to your business. Indeed, in many cases, drawing up a contract that doesn’t provide suitable social value could leave your project(s) struggling to garner support from the community.

Furthermore, while many contractors overlook the importance of social value in their work, this becomes an essential part of winning government or public contracts.

In short, the importance of social value in contracts is massive for businesses and contractors alike. Therefore, if you’d like to learn more about social value in contracts and the value this could bring, please don’t hesitate to reach out to our experts; we’re here to help, and we’ll do what we can to ensure you find the optimal solutions for your contracts overall.