Changes to the Public Procurement Rules in Scotland Consultation - Analysis of the Responses

Executive summary

Background overview

The consultation 'Changes to the Public Procurement rules in Scotland' ran from February 9^th until April 30^th 2015. One hundred and forty responses were received: seven from individuals and 133 from organisations.

Summary of findings

On the whole, the response to the consultation was very positive, with the majority of respondents agreeing with the proposals put forward in the consultation.

The main themes to emerge, across respondent groups and at the majority of the question areas, were the need for consistency, proportionality and transparency.

While most respondents supported allowing public bodies some flexibility or discretion, they also stressed that this would need to be accompanied by clear guidance so that this discretion is applied consistently and fairly.

Respondents also stressed the need for clear guidance to ensure that public bodies do not become liable to legal challenges because of decisions made under the new rules.

There were some differences in focus across the different respondent groups. For example:

• Local authorities were keen to ensure no additional bureaucracy or costs would be incurred from any proposals and also wanted the option of local arrangements to allow them to meet the needs of their own areas.
• NHS bodies, in particular, were keen to see procedural guidance put in place, particularly to ensure consistency across areas and bodies.
• Many third sector and union respondents commented on the need for public procurement to drive payment of the Living Wage with several also voicing their opposition to zero hours contracts and the need for public procurement to be used to ensure the fair treatment of workers. These groups also focussed on the need to use public procurement to tackle tax evasion or avoidance and other breaches. The need for uncomplicated rules and contracts was also important to respondents in the third sector / equality group as was ensuring that service users are consulted and their needs considered.
• Private companies, as well as others, wanted to ensure fairness and equity of treatment. This group felt that private companies should not be subject to any requirements unless these are also placed on public bodies. The need to ensure that no additional burdens are placed on bidders (short timescales, costs or additional bureaucracy, for example) also featured in responses from this group.

There were very few areas where large numbers disagreed with the proposal or position put forward by the Scottish Government.

The following paragraphs present the answers given by respondents to the questions posed in the consultation document.

Taking social, environmental and employment issues into account

There were strong consistent themes regarding what should be included in Statutory Guidance. Many respondents suggested templates, standard clauses or standard wording should be provided in the guidance. There were also consistent references to the need for flexibility, consistency and proportionality throughout.

Most respondents agreed with a statutory obligation on public bodies to include relevant clauses in their contracts to ensure that contractors comply with all relevant laws and collective agreements. Most also agreed with continuing to reserve contracts for supported businesses in Scotland.

The definition of a "disadvantaged person" prompted mixed reactions (although more agreed than disagreed with the definition proposed) and was widely considered to be very broad. Its broadness was felt to have both benefits and drawbacks. While all union and representative body for private sector respondents who addressed this question agreed with the definition proposed, other groups showed mixed opinions. More local authority and executive agency / NDPB respondents disagreed than agreed with the proposed definition.

There were mixed views on applying a provision for reserved contracts for health, social and cultural services for mutual and other non-public sector bodies in Scotland. No clear trends were evident and a range of advantages and disadvantages was mentioned.

Most respondents agreed with applying rules about labels which apply to contracts that are EU regulated procurements to lower value regulated procurement contracts covered by the Act. Most felt rules should be aligned on technical specifications for all regulated procurement, including those lower value procurements regulated by the Act.

While most respondents said that contracts should not be awarded on the basis of price or cost alone, a sizeable minority disagreed.

Making contracts more accessible for smaller businesses

The majority of respondents agreed with the proposals and position of the Scottish Government in respect of making contracts more accessible for smaller businesses.

Selection criteria and grounds for exclusion

While the majority of respondents agreed with the proposals put forward for selection criteria and grounds for exclusion, several of the issues discussed in this section attracted opposition from a sizeable minority. These included:

• That the same criteria should apply to lower value regulated contracts as applies to higher value EU regulated public contracts.
• That public bodies should retain the discretion to decide whether or not to exclude a business from bidding for a contract where the body can demonstrate by appropriate means, short of a court, tribunal or administrative decision, that the business has breached its obligations to do with paying tax or social security contributions.
• That public bodies should be given the discretion not to exclude a business which has breached its obligations to do with paying tax or social security contributions, and where this has been established by a court, tribunal or administrative decision, if it would be disproportionate to do so.
• That public bodies should retain the discretion to decide whether or not to exclude a business which is bankrupt, or is in insolvency proceedings from bidding.
• That public bodies should not be required to check that sub-contractors do not fail any of the exclusion criteria.

Views were mixed as to whether a public body should be allowed not to exclude a business with disqualifying criminal convictions, or which has breached its obligations to pay tax or social security, in exceptional circumstances. Slightly more respondents felt this should be the case than did not and commented on the need for flexibility and proportionality. More NHS respondents, representative bodies for third sector / equality and for private sector organisations and unions than other groups opposed the proposal; respondents said that they could not envisage any circumstances that would make this option necessary.

Across all of the proposals in this section, most respondents said the same rules should apply to EU regulated contracts and to lower value regulated contracts.

When asked what should be contained in the Statutory Guidance, most respondents mentioned the need for clear, unambiguous guidance and for clarification including: detail on implementation; how to test proportionality; the need for non-subjective wording; and the need for case studies or examples.

Contracts for care, support and other specific services

A large majority of respondents supported the Scottish Government's position on contracts for care, support and other specific services and made a wide range of suggestions for points that could be included in Statutory Guidance.

Procedural rules

All respondents who answered this question said public bodies should be allowed to ask for supplementary or missing information and to ask a company to provide clarification of their bid. There was no disagreement.

Views were mixed as to whether the rules in the Directives about modifying contracts should not apply to contracts under the Act; slightly more respondents felt this should be the case, than did not. Those who felt the rules should not apply, included many executive agencies / NDPBs and statutory organisations, with comments that applying the rules to lower value contracts would increase the burden on organisations. More local authorities said that they should apply; one main reason was the need for consistency.

Rules about communication

Once again, there was broad support for all of the proposals put forward by the Scottish Government in the section relating to rules about communication. Just two of the proposals saw any notable opposition and these related to:

• Deferring the requirement to provide the European Single Procurement Document in electronic form only until 18 April 2018.
• Deferring until October 2018 the provision that says businesses should not have to submit supporting documents where the public body awarding the contract holds them.

Central purchasing bodies

A large majority of respondents agreed with the Scottish Government's position in respect of central purchasing bodies.

Enforcement and monitoring

In the section on enforcement and monitoring, although a majority did support the Scottish Government's proposals and positions, a sizeable minority did not. Issues where there was some opposition included:

• Whether a monitoring and enforcement body for Scotland should be the Scottish Ministers, acting through the existing Single Point of Enquiry (SPoE).
• That the Scottish Government should simply copy the provisions on applications to the court from the existing 2012 Regulations.
• Whether there is a need for a review body that sits beneath the national courts.

Views were relatively evenly split as to whether the review body should be established as a tribunal within the Scottish tribunals system and most of those who replied were opposed to this taking some other form, for example, a Scottish Procurement Ombudsman. Many of those who did support a Scottish Procurement Ombudsman were from the private sector.

Open contracting

There was broad support for the principles of openness and transparency and for the Scottish Government commitment to open contracting and working with civil society and wider stakeholder groups to improve transparency in procurement practices.

Conclusions

Responses to the Scottish Government consultation 'Changes to the Public Procurement rules in Scotland' were very positive with the majority of respondents, across respondent groups, supportive of the proposals put forward in the consultation document.

Findings from the analysis of responses will help inform the Scottish Government's plans to change the public procurement rules in Scotland.