Source: https://www.gov.uk/government/publications/procurement-policy-note-1415-supporting-apprenticeships-and-skills-through-public-procurement
Action Note 14/15 27 August 2015
Issue
- Raising skills levels within the UK workforce is key to delivering sustainable
growth. The Government has committed to increasing the quantity and quality of
apprenticeships in England to three million starts over the next five years. - Public procurement of contracts with a full life value of £10 million and above and
duration of 12 months and above should be used to support skills development
and delivery of the apprenticeship commitment. - Whilst procurement decisions should always be made on a quality/cost/risk basis,
this can include taking into account broader qualitative long-term benefits on the
supply side (in this case, appropriate investment in skills outcomes, developed in
particular through formal apprenticeship schemes) as long as they are consistent
with the Government’s overarching priority of value for money. - This policy is aimed at supporting growth by building a more skilled and
productive workforce, reducing the risks of supply constraints and increased
labour cost inflation. - This Action note builds upon and replaces PPN 06/15 “Supporting Sustainable
Skills Development through Major Construction and Infrastructure Projects”.
Dissemination and Scope - The contents of this Action Note apply to all Central Government Departments
including their Executive Agencies and Non Departmental Public Bodies (InScope Organisations). Please circulate this document within your organisation,
drawing it to the attention of those with a purchasing role. All other Contracting
Authorities are strongly encouraged to adopt the Government’s new approach.
2 - This Action Note applies to new procurements with a full life value of £10 million
and above and with a contract duration of 12 months and above.
Timing - The provisions of this Action Note will take effect for procurements advertised on
or after 1 September 2015.
Action - The key actions are:
• In all new procurements covered by this Action Note, the In-Scope
Organisation must determine whether apprenticeships and skills development
are sufficiently linked to the subject matter of the contract to be included as
tendering and contractual requirements
• In-Scope Organisations should bear in mind that in principle,
apprenticeships/skills should be capable of being linked to the subject matter
of contracts covered by this Action Note in the majority of cases. Where InScope organisations consider that skills/apprenticeships are not sufficiently
relevant to be able to be linked, for example as a result of pre-procurement
dialogue with industry, they should keep a written record of this.
• In all new procurements where apprenticeships and skills development have
been determined to be sufficiently linked to the subject matter of the contract,
In-Scope Organisations should include in the relevant procurement
documentation, a requirement for the supplier to provide evidence of their
commitment to developing and investing in skills in performance of the
contract in question, and in particular their commitment to the creation of
apprenticeships, under the contract.
• This should be achieved through asking the supplier specific questions:
o at selection stage, seeking evidence of developing and maintaining
skills relevant to the contract in question
o at award stage, seeking the supplier’s proposals for skills development
and apprenticeships in performance of the contract.
• In-Scope Organisations should ensure that any apprenticeship and/or skills
commitments contained in the bid, for example, the number of new
apprenticeships the bidder commits to creating in performance of the contract,
are subsequently included in contracts.
• In-Scope Organisations should consider whether to build apprenticeship
and/or skills commitments into any related incentivisation mechanisms, and
monitor the outcomes as part of their normal contract management
procedures.
Link to contract and evaluation weightings - Consider the appropriateness of apprenticeship creation and skills outcomes to
the subject matter of the contract. For example, where the In-Scope Organisation
is buying an off the shelf product as one of many customers, apprenticeships and
skills development outcomes are likely to be less relevant.
11.Where an In-Scope Organisation considers apprenticeship creation and skills
development are sufficiently linked to the subject matter of the contract, it should
decide in each case the scoring and weighting to be allocated to apprenticeship
creation and skills development. In reaching a decision, the In-Scope
Organisation should consider relevance and proportionality in relation to the:
• Market from which the requirement is to be fulfilled. Consider the
ability of the market to provide quality apprenticeship and skills outcomes.
As an example of good practice, and depending on the size of the contract
and the market, we would expect contractors to aim for 3-5% of the
workforce to be apprentices, sponsored students and/or on graduate
programmes, with a focus on apprentices. 5% would represent a gold
standard (which is equivalent to the industry-led “5% Club”). Some
markets, such as construction, are more likely by virtue of workforce
numbers and type of work undertaken to offer greater opportunity for
apprenticeship creation than others.
• Subject matter of the contract. As explained at paragraph 9 above, consider
the impact of the contract’s subject matter, which may also have an effect on
the scoring and weighting to be applied where apprenticeship creation and
skills development are considered relevant.
Further Guidance
12.Material to support In-Scope Organisations in delivering these actions is provided
in Annex A as follows:
a. a guidance note to provide clarity on compliance and application of this policy
consistent with EU procurement law and value for money considerations; and
b. a checklist of example objectives and measures to apply –- Annex A Schedule1.
Background
On 24th March 2015 the previous Government announced that it would require InScope Organisations procuring major construction and infrastructure projects with
a capital value over £50m to use public procurement to drive increased
investment in training and apprenticeships. PPN 06/15 was issued in support of this.
Requiring skills and apprenticeships to be considered in contracts beyond the
scope of PPN 06/15 supports the government’s desire to encourage investment
in skills and apprenticeship development, building a more skilled and productive
workforce and reducing the risks of supply constraints and increasing labour cost
inflation. - Public procurement, utilising the greater flexibilities provided under The Public
Contracts Regulations 2015, provides a valuable lever to achieve this step
change.
Planning ahead and procuring for supply chain skills and capability investment
can:
• Improve value for money and risk management – ensuring across projects
and programmes that skills capacity and capability are matched to
programme or project needs, thus mitigating the impacts during peak
demand of wage inflation and skills gaps;
• Improve long-term productivity – by encouraging investment in new skills
and capability to support new innovative technologies;
• Encourage a more responsive supply chain – by giving the market
sufficient time to prepare to meet demand e.g. by ensuring the right skills
and resources are in place; and
The Construction Leadership Council is developing a clear definition of good
company skills performance. When available, this will help government procurers
define the types of behaviours they should look for or expect in the construction
sector. - The Government intends to monitor the impact of this policy and In-Scope
Organisations may therefore be asked to report back on progress.
Contact - Enquiries about this PPN should be addressed to the Service Desk 0345 410
2222 or info@ccs.gov.uk
Annex A: Further guidance and best practice
It is entirely acceptable within EU procurement and competition law for procurers to
make better use of public procurement in support of broader supply side benefits or
other ‘additionality’ as set out in the Green Book1
. This note provides guidance on
how skills outcomes can best be delivered, consistent with value for money
considerations. - EU Procurement and competition law
The public procurement rules were in February revised under the Public Contracts
Regulations (PCR) 2015, which have transposed early the provisions of the 2014 EU
Procurement Directive (Directive 2014/24/EU). The PCR 2015 reinforce the ability of
procurers to make use of public procurement in support of common societal goals,
provided that these are relevant and proportionate to the subject matter of the
contract. - Contracting authorities can therefore request certification/labels or other equivalent
evidence of ‘additionality’ benefits through the procurement process, provided
always that these are linked to the subject matter of the contract and that this is done
in a transparent, non-discriminatory and proportionate way.
Value for Money considerations - Whilst procurement decisions should always be made on a quality/cost/risk basis,
this can include taking into account incentivising investment in apprenticeships and
skills as part of broader qualitative long-term benefits on the supply side alongside
other ‘additionality’. - This is consistent with the principles of the Green Book. Value for Money in public
procurement should be considered as the optimum combination of whole-of-life costs
in terms of not only generating efficiency savings and good quality outcomes for the
organisation, but also benefits to society and the economy, whilst minimising
damage to the environment. - Further guidance on the appraisal and evaluation of broader benefit or ‘additionality’
and unvalued costs and benefits can be found in the Green Book:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/22054
1/green_book_complete.pdf. - The success of government intervention in terms of increasing output or employment in a given target area is usually assessed in terms of its ‘additionality’. This is its net, rather than its gross, impact after making allowances for what would have happened in the absence of the intervention. Additionality can also be referred to as a ‘supply side’ or ‘structural’ impact, which operates by altering the productive capacity of the economy.
Guidance on how to incorporate apprenticeship and skills requirements into
public procurement - The key requirement is to ask the supplier specific questions which can include the
examples at Schedule 1 to this Annex A:
• at selection stage, seeking evidence of developing and maintaining skills
relevant to the contract in question; and
• at award stage seeking the supplier’s proposals for apprenticeships and skills
development in performance of the contract.
The following is more general guidance on taking account of apprenticeship and
skills requirements
Do:
• Ensure you comply with the PCR 2015, in particular the need for all
requirements to be relevant and proportionate to the contract’s subject matter,
and for equal treatment, non-discrimination, transparency and proportionality,
when dealing with economic operators.
• Engage early and widely with suppliers to inform your decision whether
apprenticeships and skills development link to the subject matter of the
contract and give them an opportunity to shape the requirement.
• Through pre-procurement market engagement, build an understanding of the
likely apprenticeship and skills development requirements necessary to
successfully deliver over the whole life of the contract.
• Where apprenticeship and skills development are relevant, discuss
procurement pipelines with the market and the capabilities needed to deliver
them.
• Where appropriate (e.g. for larger procurements):
o engage with supply chain and local skills bodies to understand current
and predicted capability and capacity to identify potential gaps or pinch
points; and
o engage with the supply chain ahead of procurement, setting out
expected / desired skills outcomes from the project in the context of:
§ Apprenticeships
§ Employment and economic growth
§ Development of advanced and higher level skills
§ Skills and retraining of existing workforce
• Ensure all criteria used (including at selection and award stage) are
appropriate.
• Establish KPIs and benchmarks to measure delivery against apprenticeship
and skills outcomes throughout the delivery of the contract, linked to any
incentive-based payment mechanisms where appropriate and document
these in the contract.
• Request the supplier to suggest the most appropriate number of
apprenticeships to be created through performance of the contract.
Do Not:
• Apply apprenticeship or skills requirements that are not relevant or
proportionate to the specific contract being procured.
• Require as selection criteria that bidders must currently have a set number or
% of apprenticeships. This potentially discriminates, for example, against
SMEs who may be able to create apprenticeships in performance of the
contract.
• Use selection criteria requiring a bidder to have a general policy on
apprenticeships in order to participate in the competition. Selection criteria
addressing apprenticeship policy should instead invite bidders to demonstrate
how their current skills policy, including any policy on apprenticeships, would
support developing and maintaining skills required under the contract.
• Use criteria that potentially discriminates against a bidder in another member
state / non-member state.
• Apply unrealistic targets, either in terms of values or numbers of
apprenticeships to be created or geographic restrictions.
• Give any one potential supplier an unfair advantage in bidding over another –
for example through skills or training requirements that disproportionately
favour that supplier, or that set a higher or narrower standard to meet than
would be needed in order to carry out the contract effectively.
• Apply contract conditions relating to apprenticeships where apprenticeships
were insufficiently linked to the contract subject matter to be used as
selection/award criteria.
Establishing and contracting for appropriate outcome targets
Where suppliers have offered to commit to hard skills ‘targets’ other than number of
apprenticeships to be created, such as number of training days to be provided, these
commitments should be incorporated into any resulting contract.
Other potential outcome measures are set out in the following Schedule 1.
Annex A: Schedule 1 – Example selection and award stage
questions, criteria and measures
The schedule below sets out examples of potential questions that could be asked of potential
suppliers at the selection stage (e.g. in the PQQ) (Column 1), and those which might be included at
award stage as an evaluation criterion (column 2) with some notes (column 3).
Potential prequalification
Selection stage questions
Potential award stage
measures
Notes
Evidence of skills to support performance of the contract:
Provide evidence of developing and maintaining skills over the last three years relevant to delivering
the contract. This could include, for example, evidence of apprenticeships started and of apprenticeships completed or of other skills training or development. - Provide evidence of your proposed policy and process for workforce training and development
for direct and subcontracted staff relating to performance of this contract. - This question should be scored as part of the selection stage evaluation criteria Apprenticeships are a valuable, but not the only, means by which a contractor can provide evidence. For example the
recruitment of experienced staff that are offered on-going training could also be a means of maintaining skills levels. - Number and Quality of
Apprenticeships:
How many apprenticeships will be, started and, where the contract duration allows,
completed as a result of this contract?
Apprenticeships are full time paid jobs with training, which typically last a minimum of 12 months.
The supplier should propose what measures it will take and the number of
apprenticeships it will commit to create as a result of the contract. These measures should then be incorporated into the terms and conditions of the contract. - Commitment to skills and training:
Over the last 3 years:
What proportion of staff have achieved professional registration and/or are
engaged in accredited training?
How many accredited training opportunities of any level will be delivered as part of this contract?
Will these training opportunities be
recognised, valued, and transferable qualifications?
ACCREDITED training is any training towards a formal qualification, for example NVQs, Institute of Leadership and Management (ILM), Health and Safety (e.g. NEBOSH, IOSH) qualifications. - KPIs should measure compliance against the tender / contract measures.
What proportion of staff proposed to perform the contract are currently working towards
professional registration and when are these due to be achieved?
In-Scope Organisations should consider the feasibility of a bidder being able to identify the staff members proposed to perform the contract at the time of bidding. - Commitment to skills and training:
What are your plans for ensuring that the skills and training commitments
(made in your bid) flow down to your supply
chain?
KPIs should measure compliance against the tender / contract measures.
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