Addressing fair work practices, including the real living wage, in procurement: best practice

Contract Award and Contract And Supplier Management

Introduction

A public body should consider how to appropriately debrief bidders, including on how they have responded to a Fair Work criterion.

It is also important that contract terms and conditions, and an agreed approach to contract and supplier management ensures that any Fair Work commitments offered by the winning bidder(s) are adopted and complied with for the duration of the contract.

This section of the Guidance along with the Practical Tools and Examples which are available in the Toolkit, will help a public body to provide feedback to bidders and adopt an appropriate approach to contract and supplier management.

16. Standstill / Debriefing Tenderers

16.1. Providing further information to successful and unsuccessful tenderers about their bid is an opportunity to explain why, along with other criteria, Fair Work practices, including the payment of the real Living Wage, are important and can contribute to the quality of the contract. It is helpful if this information can draw out the positive aspects of the tenderer’s response and suggest areas for improvement.

16.2. In EU-regulated procurement exercises, a public body must send a standstill notice to all tenderers and candidates concerned, unless the circumstances described in regulation 85(4) of the PC(S)R 2015 apply. This notice must set out:

a) The criteria for the award of the contract;

b) Where practicable, the score of the bidder concerned;

c) The name and, where practicable, the score of the winning bidder;

d) In the case of an unsuccessful tenderer, a summary of the reasons why it was unsuccessful and the characteristics and relative advantages of the winning bidder;

e) In the case of an unsuccessful candidate, a summary of the reasons why it was unsuccessful; and,

f) A precise statement on the effect of the standstill period.

16.3. In response to a written request from an unsuccessful bidder, a public body must inform the bidder of the reasons why it was unsuccessful. If the request comes from a successful bidder, a public body must describe any improvements that could have been made to the bid.

16.4. For regulated procurements below the OJEU threshold, public bodies must notify all unsuccessful bidders of the name of the winning bidder, the criteria used to award the contract, and the scores of both that unsuccessful bidder and the winning bidder. In response to a written request from an unsuccessful bidder, a public body must give the bidder a summary of the reasons why it was unsuccessful and the characteristics and relative advantages of the winning bid. If the request comes from a successful bidder, a public body must describe any improvements that could have been made to the bid.

16.5. A public body should take care to ensure that the feedback does not suggest that any one element of a package of Fair Work practices is regarded as a requirement of tendering. It is helpful to identify how some elements of their package were stronger than others, for example, while the real Living Wage cannot be a requirement of tendering, it is a clear indication of a positive approach to Fair Work.

17. Contract Terms And Conditions

17.1. It is expected that those performing public contracts comply with all relevant law and international obligations, including employment law.

17.2. Regulation 19(4) of the PC(S)R 2015, places a legal obligation on a public body to include in each public contract or framework agreement, conditions relating to the performance of the contract or framework as are considered reasonably necessary to ensure that the supplier complies with environmental, social and employment law. Scottish Procurement Policy Note 09/2016 has been issued to public bodies, which includes guidance and contract conditions a public body can adapt for use in its contracts.

17.3. The commitments offered by the winning bidder(s) will form the basis on which the contract will be performed. It is therefore important to ensure that the Fair Work practices to be adopted are reflected in the contract documentation and the contract terms and conditions. For example, this could be done by including the commitments as an added value annex to the Schedule of Requirements and the Price Schedule.

17.4. It is also important, in the case of a framework agreement to ensure that the Fair Work practices to be adopted are outlined in the buyer’s guide to ensure these are known to contract users and applied in the terms of any call-off contracts.

18. Approaches To Contract Monitoring

18.1. Fair Work practices must be considered as an integral element of the contract and supplier management process and should be included as a standard agenda item at supplier review meetings to be considered alongside all other contract management matters. It is important to ensure monitoring includes the use of any agency or sub-contractor workers throughout the duration of the contract, including any new members joining the workforce engaged on the delivery of the contract.

18.2. Fair Work practices could be embedded with a balanced scorecard approach as part of the performance monitoring and continuous improvement, enabling the delivery of the contractor’s commitments to Fair Work practices to be measured. Further guidance is available on the Procurement Journey Contract and Supplier Management – Managing & Improving Performance, including balanced scorecard suggestions.

18.3. Evidence should be sought from contractors to demonstrate compliance with agreed contract conditions, for example, reviewing information on pay policy and terms and conditions of workers involved in the delivery of the contract, including what the main contractor is doing to ensure commitments are being maintained for agency workers and down the sub-contractor supply chain. This can, for example, take the form of a statement from a Director that workers pay has been adjusted annually
to maintain parity with any national increase in the real Living Wage.

18.4. In certain circumstances a public body could consider how workers can support the monitoring process by reporting any non-compliance with agreed terms and conditions, for example through a trade union representative or adopting a basic dispute resolution process, agreed by trade unions and communicated to all workers.

18.5. Where there are material concerns regarding a contractor’s compliance with any Fair Work commitments or the contractual obligations it has made, a public body could consider whether to undertake an audit of the contractor’s Fair Work practices. This could be undertaken as part of a more general sustainability audit of the contract.

18.6. A public body can also promote the benefits of adopting wider Fair Work practices to its contractors as part of contract management and monitoring arrangements. This could include signposting a range of useful sources of information such as:

• The Information Sheets available in the Toolkit
• The Close the Gap – Think Business, Think Equality Tool
• A public body can also encourage them to consider accreditations, for example, Scottish Living Wage Accreditation, Investors in People, Investors in Young People, Healthy Working Lives and to sign up to the Scottish Business Pledge, or equivalent in their own country.