Scottish Government procurement: annual report 2021 to 2022

4. Contracting activity and how our procurement activity contributes to value for money

4.1 Introduction

Our contracts deliver a wide range of economic, social and environmental benefits as well as significant financial savings for the public sector.

Our contracting activity covers Scottish Government core use only; Central Government Agencies and Non-departmental public bodies (NDPB) (non-collaborative, for individual public bodies); Sectoral collaborative frameworks (for central government organisations including agencies and NDPBs); and National collaborative frameworks and contracts. We provide framework agreements and contracts for commonly purchased goods and services which are used across the public sector.

Contracting for Scottish Government directorates is about delivering the services and goods required to enable government policy and support corporate functions, placing contracts that are key to delivery of the Programme for Government. As an organisation, year on year we mainly buy research to help us understand the needs of the people of Scotland, although there are some exceptions to this. Details of our contract awards are available on the Public Contracts Scotland website.

As with the previous reporting year, 2021 to 2022 was a further period of uncertainty and budget constraints, with the EU exit legacy, the pandemic, and more recent impacts of the crisis in Ukraine and energy costs. It was therefore more important than ever that buying organisations understood and mitigated risks and continued to think commercially, spend wisely and deliver real value for money. To support this we:

• worked closely with the people who use the goods, services and works we buy to help understand their requirements and the markets we work in;
• awarded contracts on the basis of fair, open and transparent competition which is in proportion to the contract in question and which keeps to our legal obligations; and
• made sure that our contracts were effective and managed efficiently.

Our Collaborative procurement achieves value for money for the Scottish public sector through partnership working with buying organisations, the Procurement Centres of Expertise and suppliers.

Our established collaborative procurement portfolio teams cover Utilities, Information and Communication Technology, and Corporate and Professional Services. They award framework agreements for the whole of the Scottish public sector and for the central government sector.

We have a collaborative team developing a portfolio strategy for construction and our More Powers Procurement Implementation Team delivers contracts and provides commercial support to fulfil obligations under the Scotland Act 2016 which transferred a wide range of powers to Scottish Ministers, most significantly the powers over social security and employment support.

The national contracts and frameworks awarded by our buying teams can be used by public organisations across Scotland and cover a range of goods and services. Our website contains more information on our current collaborative agreements.

4.2 Summary of Scottish Government^[12] core Regulated Procurements April 2021 – March 2022

Key Figures

• Through the reporting period, we managed 452 live regulated contracts worth nearly £5.3 billion throughout their lifetimes.
• Compared to reporting year 2020 to 2021, we managed 196 fewer contracts, but with an increased value of over £573 million.
• We awarded 319 new contracts regulated by the Procurement Reform (Scotland) Act 2014 with a total value of over £877 million.
• Our contracts and frameworks in reporting year 2020/21 (across all types of contracting activity) saved the public sector over £161 million.

Case study: Covid-19 Public Engagement

Covid public health campaigns during 2021 to 2022 have typically reached 99% of the adult population in Scotland, encouraging action among two thirds or more of those who have seen the campaigns. Collaboration with contractors through the Scottish Government Marketing Services and Media Planning and Buying Frameworks was key in the delivery of this work.

4.3 Summary of SG procurement spend and savings in 2021-2022

Key Figures

• Combined core Scottish Government spend and collaborative frameworks spend was £1.52 billion, with savings of £161 million (11%).
• Core Scottish Government spend through regulated procurement in reporting period 2021 to 2022 was £420 million, an increase of £92 million on the previous year.
• Total spend through our collaborative frameworks was over £1.1 billion, and savings achieved through these frameworks was just over £139 million (13%). All of our national collaborative frameworks were available for use by third sector organisations.

The table below shows spend through collaborative frameworks (established by Scottish Ministers, but available to all Scottish public sector bodies) and contracts for the use of the Scottish Government.

4.4 Summary of regulated procurements in the next two financial years

The Procurement Reform (Scotland) Act requires public bodies to provide a summary, in their annual procurement reports, of the regulated procurements expected to commence over the next two financial years. This brings added transparency to the procurement process and enables suppliers to gain an early indication of upcoming tendering opportunities and to plan accordingly for these.

In the next two years we anticipate starting around 230 procurements with a combined value of approximately £3.8 billion across our contracting scope.

We expect to award:

• Over 130 contracts for the sole use of the Scottish Government, with an approximate value of £969 million.
• 63 contracts worth around £207 million will be awarded in relation to the specific services required to support the additional powers devolved to the Scottish Government by the Scotland Act 2016.
• It is expected that 31 national collaborative contracts/frameworks will be awarded on behalf of Scottish public bodies, with a value of nearly £7 billion.

A full list of known regulated procurements due to commence within the next 2 years of the reporting period is in Annex A.