Procurement Reform (Scotland) Act 2014: statutory guidance

1. Introduction

The previous version of this publication has been archived at: Procurement Reform (Scotland) Act 2014: statutory guidance

1.1. Introduction

This suite of statutory guidance was originally published on 17 March 2016. It has been updated to reflect changes that have occurred as a result of the UK's exit from the European Union and the end of the Transition Period at 11pm on 31 December 2020. This version includes a chapter on Fair Work First and procurement. The guidance is published by the Scottish Ministers under the Procurement Reform (Scotland) Act 2014 (the Act). Specifically, the Act allows Ministers to publish statutory guidance on the following:

• procurement strategies and annual procurement reports (section 20 of the Act)
• sustainable procurement duty (section 10 of the Act)
• community benefit requirements in procurement (section 26 of the Act)
• selection of tenderers and award of contracts (section 29 of the Act)
• procurement for health or social care services (section 13 of the Act)

This statutory guidance does not constitute legal advice. A contracting authority should seek its own legal advice when it is uncertain about the legal rules and their application. This guidance applies to regulated procurements which commence on or after 18 April 2016 and reflects changes taking effect from 11pm on 31 December 2020.

The suite of statutory guidance has been informed by public consultation^[1] 1 and feedback received from key stakeholders both during the original publication and in the review process.

This suite of statutory guidance provides advice on what a contracting authority should do to comply with the Act, the Public Contracts (Scotland) Regulations 2015 and the Procurement (Scotland) Regulations 2016 which were made under the Act). A contracting authority must have regard to this guidance and should read it together with the relevant sections of the Act and the Regulations. A contracting authority should also take into account any other relevant guidance or good practice where appropriate.

1.2. Policy Context

Scotland's purpose is to focus Government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increased wellbeing, and sustainable and inclusive economic growth.

Good procurement is vitally important to public services, businesses and communities alike. If we are to deliver sustainable economic growth, it is essential that we continue to use the power of public spending to deliver greater public value, drive efficiencies and help public bodies achieve their overarching purpose and strategic objectives.

Smart use of procurement can play a key role in building a more prosperous and fairer Scotland by: promoting jobs and growth; encouraging innovation; boosting training, apprenticeship and employment opportunities; and helping businesses, particularly small and medium sized enterprises (SMEs), third sector bodies, and supported businesses to compete effectively for contracts.

Much has already been done over recent years to improve the way that procurement processes and systems operate in Scotland. This has been achieved as a result of the whole of the public sector in Scotland working together to ensure public procurement continues to improve and to deliver greater public value.

Only with Government working in partnership with the wider public sector in Scotland, the third sector, trade unions, businesses and communities, will we be able to create a society where the benefits of economic growth are shared more equally and where future economic growth is stronger and more sustainable as a result.

The overarching aim of public sector procurement activity in Scotland continues to be the achievement of value for money for the taxpayer. The Scottish Model of Procurement defines value for money as the best balance of cost, quality and sustainability and this should be reflected throughout strategy development, reporting and procurement processes for contracting authorities and economic operators alike.

1.3. Legal Context

The UK's exit from the European Union has resulted in technical changes to Scotland's public procurement legislation. The Public Procurement etc. (EU Exit) (Scotland) (Amendment) Regulations 2020 fixes deficiencies that would have otherwise arisen while maintaining the same fundamental processes and procedures.

This includes the following legislation which derived from European Union Directives and was transposed into Scots law:

• the Public Contracts (Scotland) Regulations 2015
• the Utilities Contracts (Scotland) Regulations 2016
• the Concessions Contracts (Scotland) Regulations 2016

The regulations ensure that public purchases are made in a transparent and fair manner. This is to achieve efficiency in public spending while facilitating the participation of SMEs, third sector bodies and supported businesses. In doing so, a contracting authority can make better use of public procurement in support of common societal goals.

The Procurement Reform (Scotland) Act 2014 works alongside the regulations to provide a national legislative framework for sustainable public procurement that supports Scotland's economic growth through improved procurement practice. The Act focuses on a small number of general duties on contracting authorities regarding their procurement activities and some specific measures aimed at promoting good, transparent and consistent practice in procurement processes. Further provisions under the 2014 Act are made through the Procurement (Scotland) Regulations 2016.

Following consultation, the Act applies consistent rules to public contracts and gives the Scottish Government the discretion to make changes. This means that even further consistency can be applied to the majority of public procurement contracts in Scotland, therefore simplifying and streamlining the procurement process for contracting authorities and economic operators alike.

The table below shows sections of the Act and their application to public contract threshold values.

1.3.1. Table showing sections of the Act and their application

Notes

(1) The threshold for regulated procurements under the Act can be found in section 3 of the Act.

(2) The thresholds can be found in regulation 5 of the Public Contracts (Scotland) Regulations 2015 and as amended by regulation 4 of the Public Procurement etc. (EU Exit) (Scotland) (Amendment) Regulations 2020.

(3) Section 12 of the Act provides for a contracting authority to award health or social care contracts, or framework agreements, without seeking offers in relation to the proposed contract when below the threshold specified in the Public Contracts (Scotland) Regulations 2015 and as amended by the Public Procurement etc. (EU Exit) (Scotland) (Amendment) Regulations 2020.There are, however, some provisions that will still apply when an authority chooses to award without advertising. Many health or social care services require special consideration by a contracting authority and it is important to refer to the relevant statutory guidance.

(4) A 'light-touch' regime exists for certain services. That regime applies to public contracts equal to or greater than the threshold specified in the Public Contracts (Scotland) Regulations 2015 and as amended by the Public Procurement etc. (EU Exit) (Scotland) (Amendment) Regulations 2020.

(5) Section 15 of the Act applies to a contracting authority which has a significant procurement expenditure in a financial year (this is where the total value of contracts to which its regulated procurements relate is at least £5 million).

(6) Section 18 of the Act applies to a contracting authority that is required by section 15 to prepare and publish a (or review an existing) procurement strategy.

(7) The Public Contracts (Scotland) Regulations 2015 do not contain reference to Public Contracts Scotland (PCS), but do contain reference to publication in the Find a Tender Service (FTS).

(8) Section 25 of the Act applies only to public contracts with an estimated value equal to or greater than £4 million.