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

Procedural rules

Using a prior information notice as a call for competition

A Prior Information Notice (PIN) is used to tell people what a public body is planning to buy over the next year. The Directives say that a PIN could be used in the place of an advert, or contract notice, to invite bids and the Scottish Government plans to allow this.

Q36 Should provision be made for the use of a Prior Information Notice by non-central authorities (where they choose) as the call for competition in restricted procedures and competitive procedure with negotiation? Please explain your answer.

Seventy respondents agreed, eight disagreed and two made other comments.

Sixty respondents who agreed with this provision commented further; six of these simply made general supportive comments.

The main reason given for supporting the provision was that this will speed up the procurement process or reduce tendering timescales. Other reasons included:

• That this will simplify or streamline the process, make the process more business friendly, reduce bureaucracy and / or bring greater efficiency.
• That this will add more flexibility to the process.
• That this will help the supply chain to plan ahead or help businesses plan for the future.

There were some notes of caution, however, with respondents stressing the need to ensure that it is made clear in the Prior Information Notice (PIN) that there will be no advert. Some respondents were concerned that suppliers, who are used to the current process, might miss out on an opportunity by waiting for a contract notice. There were also queries as to how much of the detail presented in current notices would be included in a PIN.

Several respondents queried why central government and NHS bodies are to be excluded.

A small number commented that Public Contracts Scotland would need to be altered to accommodate closing dates for PINs and expressions of interest for PINs.

A small number commented that PINs may not be suitable for all contracts but that public bodies may choose to use a PIN as it is easier than the current process.

A representative body for the private sector said that construction will need separate guidance as it is more complex than other goods and services.

Eight of those who disagreed with the use of PINs also commented; several of these respondents felt that using PINs would cause confusion amongst buyers or may lead to a lack of consistency across public bodies. There was also concern that the maximum period may be too long, perhaps leading to some suppliers forgetting to bid.

A representative body for professionals commented that PINs do not bind the public body to anything and so are not useful.

Other comments included: that PINs should be published directly to suppliers; and that further discussion and clarification is required before a decision is made.

The consultation then asked about the use of Prior Information Notices in relation to lower value regulated contracts.

Q37 Do you agree or disagree that this provision should also apply to lower value regulated contracts, that is, those that are below European regulated thresholds and are regulated by the Act? Please explain your answer.

Sixty-three respondents agreed, 15, including several local authorities and executive agencies / NDPBs, disagreed and a statutory organisation made another comment.

Forty-nine of those who agreed commented on their answer; the main theme to emerge, in around half of these responses, was that applying this provision to lower value regulated contracts was supported for reasons of consistency and / or simplification.

Once again, respondents commented that this provision will reduce procurement timescales and allow greater flexibility.

A small number called for discretion for public bodies. A small number asked for more clarity around the content of the PIN.

Fifteen respondents who disagreed also commented with several feeling that this would add complexity or bureaucracy and cause confusion. A small number commented that a year was too long a time. A small number felt that this process is not needed or would not be suitable for lower value contracts.

One statutory organisation did not agree nor disagree; they commented that guidance for advertising should not be overly complex.

Negotiated procedure without prior publication

The Directives allow for public bodies to negotiate the award of a contract without any advertisement, or call for competition, in specific circumstances. The Scottish Government plans to continue to allow public bodies to do so.

Q38 Do you agree or disagree that public bodies should be permitted to award a contract without competition in the circumstances permitted by the Directives? Please explain why.

Eighty-two respondents agreed, one local authority disagreed and four respondents made other comments.

Seventy-three commented, with many of these respondents saying they agreed for the reasons outlined in the consultation document, particularly that there may be cases where there is an emergency situation, where only one source of supply is available or where procurement may be hindered if the normal process was followed. Some stressed that guidance would be needed in order to ensure consistency and proportionality and there were calls for a definition of 'reasons of extreme urgency'.

Respondents also stressed that this situation should only be used in exceptional circumstances and there were calls for the process to be tightly managed, the use justified and the circumstances and evidence documented to ensure transparency.

A small number commented that, in these cases, a Contract Award Notice should still be published. There were also some comments that public bodies should be obliged to check each time a contract is awarded to make sure that circumstances have not changed, for example that there is still only one possible supplier.

One local authority disagreed, saying they felt this would only be appropriate in cases where there has only been one bidder.

Four respondents made other comments including:

• Concern that the arrangements may favour arms-length external organisations.
• The need for clarification on how the proposal relates to Section 12 of the Act.
• That care must be taken to avoid a decline in measurable standards and of comparable results in equality outcomes (across similar areas, tendered differently)" (third / equality).
• The need for clarification over 'previous competition', specifically the length of time that would be classed as 'previous'.

Respondents were then asked about awarding contracts without competition in relation to lower value regulated contracts.

Q39 Do you agree or disagree that public bodies should also be permitted to award lower value regulated contracts in similar situations? Please explain why.

Seventy-nine respondents agreed, two disagreed and one organisation made another comment.

Sixty-nine of those who agreed provided reasons for their answer; these were general support for the reasons outlined in the consultation document and specifically for reasons of consistency.

Once again, a small number added provisos: that there would need to be a sound rationale with evidence of justification; or that clear guidance is required.

A small number of respondents commented that it may be useful to expand the availability of this approach.

As with the previous question a very small number voiced concerns and these included: that the arrangement may favour arms-length external organisations; or the need for clarification over the terms 'previous competition' and 'suitable' bid.

Reduced timescales in a restricted procedure

The Utilities Directive and Public Procurement Directive allows a body and all the businesses invited to submit a bid to agree a deadline for submitting bids if they wish to do so. The consultation explains that the Scottish Government is in favour of this process.

Q40 Do you agree or disagree that all non-central authorities using the restricted procedure should be able to set the time limit for the receipt of tenders by agreement with candidates? Please explain why.

Seventy-five respondents agreed, five disagreed and a private sector respondent made another comment.

Sixty-five respondents who agreed that all non-central authorities using the restricted procedure should be able to set the time limit for the receipt of tenders by agreement with candidates commented further. Many simply said this would allow more flexibility or that this would speed up the process for less complex contracts.

Several respondents stressed that this should only take place with the agreement of all bidders; a small number felt this may prove problematic.

A small number again queried why central authorities and NHS bodies were excluded (and some requested a definition of 'central authorities').

A small number of respondents, particularly from the private sector, commented that too short a time may put pressure on suppliers and that it may not be possible to collect all the data within the timescale.

There were also calls for clear guidance as to the circumstances in which a shorter period would be acceptable.

A small number said that care would be needed to ensure adequate time for the complexity of the contracts; particularly to ensure SMEs have enough time to respond to complex tenders.

The five respondents who disagreed were concerned: that there may be inconsistency across public bodies; that 10 days is too short; that timescales may be set too short; or that public bodies extending an agreed timescale may be open to legal challenge.

A private sector company gave a detailed response in relation to EU regulation timescales and potential problems with reduced timescales in relation to the clothing tenders where materials need to be sourced and a sample run produced and tested.

Examining tenders before verifying qualification criteria

At present public bodies may decide to evaluate all bids before checking if there are any grounds for exclusion and confirming the companies meet the selection criteria. The Directives allow public bodies, in some cases, to only check the qualification criteria for the business which submitted the highest scoring bid. The Scottish Government intends to leave the choice with public bodies.

Q41 When using the open procedure, should public bodies retain the flexibility to determine whether to evaluate bids before evaluating qualification and exclusion criteria? Please explain your answer.

Seventy-one respondents said 'yes' and nine said 'no'.

Sixty-three of those who said 'yes' gave their reasons; these were mainly support for retaining flexibility, making the process simpler, quicker, more efficient or convenient and reducing time and cost associated with processing multiple tenders.

There were some additional comments and these included:

• The need for guidance to ensure public bodies use and apply this procedure in a fair, transparent and consistent manner.
• Queries over how feedback would be provided to unsuccessful bidders if bids are not fully evaluated.

Eight of those who said 'no' commented further and the reasons given included:

• Concern over the risk of discrimination or perception of discrimination or bias.
• That bids will have to be reassessed or the result altered if the highest scoring bid fails to qualify.
• That all information should be examined.

Incomplete or wrong information

The Directives allow public bodies to ask businesses to add to or clarify their tenders, for example if they have submitted incorrect information or have omitted to provide some information. The Scottish Government feels that public bodies should have the flexibility to ask businesses to clarify or add to their tender, so long as they do so in a way which does not discriminate, which is transparent, and which treats everybody equally.

Q42 Should public bodies be allowed to ask for supplementary or missing information and to ask a company to provide clarification of their bid?

Eighty-seven respondents said 'yes', no respondents said 'no'.

Respondents welcomed retaining this flexibility for public bodies which was seen as fair to suppliers and likely to produce better outcomes. Many pointed out that small errors can creep into bids for a variety of reasons including time pressures, misunderstandings and human error. However, a number of respondents stressed that this must be restricted only to missing information or clarification.

There were calls for guidance to ensure all are aware of the circumstances in which this would be allowed and that it is done in an appropriate and transparent matter. Several respondents commented that there would need to be documentation including evidence of the justification for asking for information.

Modifying contracts

The Public Procurement Directive describes when a public body can change or modify a contract without having to start a new procurement process. This can be applied to lower value contracts. However, the Scottish Government feels that as the new rules are quite restrictive and could create unnecessary risk and burdens when applied to lower value contracts, that it would not be appropriate to do so.

Q43 Do you agree or disagree that the rules in the Directives about modifying contracts should not apply to contracts under the Act? Please explain why.

As can be seen in the following table, 47 respondents agreed, while 34 disagreed and two representative bodies felt more information was required on this issue. More local authorities disagreed than agreed.

Question 43: Do you agree or disagree that the rules in the Directives about modifying contracts should not apply to contracts under the Act?

	Agree	Disagree	Other	No reply
Local authority (27)	11	14	-	2
Executive Agencies and NDPBs (13)	6	1	-	6
NHS (6)	4	2	-	-
Other statutory organisation (11)	7	1	-	3
Third sector / equality organisation (20)	2	1	-	17
Private sector organisation (18)	7	5	-	6
Representative body for third sector / equality organisations (12)	3	3	-	6
Representative body for private sector organisations (9)	-	3	1	5
Representative body for professionals (6)	2	2	1	1
Union (5)	-	-	-	5
Housing / Care (4)	3	1	-	-
Other (2)	1	-	-	1
Individuals (7)	1	1	-	5
TOTAL (140)	47	34	2	57

Thirty-nine of those who agreed commented further. The main theme to emerge from these responses was that applying the rule to lower value contracts would increase the burden on organisations. One executive agency / NDPB respondent commented: "The reform act has already put in place large number of obligations on to public bodies and where further regulation is not required, then this should be avoided. There is a real danger of making all of the rules fit all of the circumstances and this may not be desirable or necessary. This runs the risk of making all procurements more complicated and difficult than they need to be".

There were also comments on the need to allow public bodies flexibility; applying the rules to lower value contracts was seen as disproportionate and restrictive. A small number asked for guidance on 'modifying contracts', on the extent of flexibility that public bodies can apply or on what would happen if a modification brought the contract above the EU threshold value.

Two representative bodies for the third / equality sector commented on the importance of public bodies being able to modify contracts if this will better meet the needs of service users.

Thirty-three of those who disagreed commented further and the main theme from these responses was the need for consistency. One local authority respondent said: "This would introduce inconsistency of standards, would be confusing and contradictory, and give no certainty in regulated contracts". A small number commented that the rules did not seem overly restrictive and could, therefore, be applied to lower value contracts.

Summary : Procedural rules

Most respondents:

• Agreed that provision should be made for the use of a Prior Information Notice by non-central authorities (where they choose) as the call for competition in restricted procedures and competitive procedure with negotiation.
• Agreed that this provision should also apply to lower value regulated contracts, that is, those that are below European regulated thresholds and are regulated by the Act.
• Agreed that public bodies should be permitted to award a contract without competition in the circumstances permitted by the Directives.
• Agreed that public bodies should also be permitted to award lower value regulated contracts in similar situations.
• Agreed that all non-central authorities using the restricted procedure should be able to set the time limit for the receipt of tenders by agreement with candidates.
• Said that when using the open procedure, public bodies should retain the flexibility to determine whether to evaluate bids before evaluating qualification and exclusion criteria.
• Said public bodies should be allowed to ask for supplementary or missing information and to ask a company to provide clarification of their bid.
• Agreed that the rules in the Directives about modifying contracts should not apply to contracts under the Act. However, a fairly large number disagreed.