Contracts advertised through Public Contracts Scotland: FOI response

FOI reference: FOI/17/01401
Date received: 18 June 2017
Date responded: 10 July 2017

Information requested

In the publication "How Scotland will achieve efficiencies from improved procurement in 2011-12 and beyond", (http://www.gov.scot/Publications/2010/11/17094015/0) it is stated that:

• 30 day payment terms to sub-contractors are already a part of the Scottish Government's standard terms and conditions.

• 74 per cent of the contracts advertised through Public Contracts Scotland in October 2010 – from across the entire public sector – were awarded to SME.

• Public Contracts Scotland was launched in October 2008. More than 48,000 suppliers (84 per cent of which are SMEs) are registered, and approximately 14,000 opportunities have been advertised by over 250 public bodies in Scotland.

• Work to develop a standard PQQ for the entire public sector in Scotland is at an advanced stage, and this will be released early in 2011. It will ensure that information requested is relevant, and will link to the Public Contracts Scotland database, meaning that information need only be entered once.

This is a request for the following information:

1. Is there an update to this information and if so can you direct me to it.

2. For that update, (or, if there is no update, for the data given above), of the contracts advertised through Public Contracts Scotland, what percentage is awarded to SMEs based in Scotland?(For information, another part of the Scottish Government website gives that "As at March 2016, there were 348,045 Small and Medium-sized Enterprises (SMEs) operating in Scotland, providing an estimated 1.2 million jobs. SMEs accounted for 99.3% of all private sector enterprises and accounted for 54.6% of private sector employment and 40.5% of private sector turnover.") So the question is what percentage of this group has been awarded contracts advertised through Public Contracts Scotland.

3. Of the value of contracts advertised through Public Contracts Scotland, what percentage of that value goes to SMEs based in Scotland, as defined by the Scottish Government.

4. Are contracts going out through the Hubs advertised through Public Contracts Scotland? And if so, what percentage of contracts being let by the Hubs are advertised in this way? Is there any written agreement requiring the Hubs to use Public Contracts Scotland? Are they expected to use Public Contracts Scotland?

Response

Questions 1 and 2

Regarding 30 day payment terms, it remains a standard condition of our contracts that we will pay valid invoices within 30 days (and in 2016/17, we paid 98.6% of valid invoices within ten days). It is also a standard condition that any sub-contract must contain a clause which requires payment of invoices to the sub-contractor within 30 days; this clause should be replicated down through the supply chain. The condition must also make clear that if a sub-contractor believes that invoices are not being paid within the 30 day period it may raise the issue directly with the Scottish Government and is not required to first raise the issue up through the various tiers of the supply chain.

The Scottish Government has, by way of Scottish Procurement Policy Note 8/2009, asked other public bodies to adopt a similar clause. This is available online at: (http:// www.gov.scot/Topics/Government/Procurement/policy/SPPNSSPANS/policy-notes/sppn0809)

Additionally, the Procurement Reform (Scotland) Act 2014 requires contracting authorities which expect to have significant procurement expenditure within a given financial year to prepare, or review, a procurement strategy in relation to that year. Within this, they must set out how they intend to ensure the following payments are made, no later than 30 days after the invoice (or similar claim), relating to the payment is presented:

(i) Payments due by the authority to a contractor (ii) Payments due by a contractor to a sub-contractor (iii) Payments due by a sub-contractor to a sub-contractor

Contracting authorities will also be required by that Act to prepare an annual procurement report on their regulated procurement activities, which must include a review of whether those procurements complied with the authority's procurement strategy. If any regulated procurements did not comply, the authority must produce a statement of how it will ensure that future regulated procurements will comply.

Information concerning the number of contracts advertised on Public Contracts Scotland (PCS), and the percentage of SMEs and Scottish suppliers winning those contracts is already publicly available. It is contained within the PCS Progress Reports on the PCS website at: (www.publiccontractsscotland.gov.uk/info/InfoCentre.aspx?ID=1361&Type=1403&Path=1403)

Under section 25(1) of FOISA, we do not have to give you information which is already reasonably accessible to you. If, however, you do not have internet access to obtain this information from the website, then please contact me again and I will send you a paper copy.

A standard pre-qualification questionnaire was developed for use by Scottish contracting authorities. This was superseded, however, when the Public Contracts (Scotland) Regulations 2015 came into effect in April 2016, giving force to the 2014 Public Procurement Directive, and introducing the European Single Procurement Document.

Question 3

It is not possible to answer directly this question and use the information on PCS to calculate the value of contracts awarded to SMEs or Scottish-based suppliers. There are a number of reasons for this, including that some contract notices cover the award of contracts to multiple suppliers, that contract values can be given as a range, and that the contract values can be withheld by the authority in some limited circumstances.

This is therefore a formal notice under section 17(1) of FOISA that the Scottish Government does not have the information you have requested.

The Scottish Government has established a separate database, however (The Scottish Procurement Information Hub), which takes information from 102 Scottish public bodies' finance systems and analyses it to identify procurement spend each year. Figures from this database show that of the circa £11.3bn public sector procurement spend in Scotland in 2015/16:

• 49% was directly with SMEs (where company size is known)

• 55% was directly with suppliers with a postcode in Scotland (where postcode is known)

• 50% was directly with suppliers with a postcode in Scotland (where both company size and postcode is known), and of this amount, 59% was directly with SMEs

Please note that for these purposes, company size is based on the number of employees only, and that these figures are based on spend with core trade suppliers (these are suppliers with which over £1,000 has been spent in a 12 month period, and which have also been classed as a trading organisation or as a non-trade social care provider).

Question 4

HubCos are neither required nor expected to advertise their contracts on PCS, because they are not public bodies to which the public procurement regulations apply, but institutionalised private-public partnerships awarded after European-wide competition.

Details of contracts advertised through Public Contracts Scotland are readily available online at: (http://www.publiccontractsscotland.gov.uk/search/search_mainpage.aspx)

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