Procurement: annual report 2022 to 2023

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 NDPBs (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. Details of the contracts that we have placed can be found on PCS.

Contracting for Scottish Government directorates is about delivering the services and goods required to enable delivery of government policy and support corporate functions, placing contracts that are key to delivery of the Programme for Government. Details of our contract awards are available in the Scottish Government contracts register: Contracts Search - Public Contracts Scotlandon the PCS website.

We are committed to spending wisely and delivering real value for money. To support this we:

• work closely with the people who use the goods, services and works we buy to help understand their requirements and the markets we work in;
• award 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
• make sure that our contracts are 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^[5] core regulated procurements April 2022 - March 2023

Key figures

• Through the reporting period, we managed 836 live regulated contracts worth over £4.5 billion throughout their lifetimes.
• We awarded 288 new contracts regulated by the Procurement Reform (Scotland) Act 2014 with a total value of over £871 million.
• Through our contracts and frameworks in reporting year 2022-23 (across all types of contracting activity), we saved the public sector just under £145 million.

4.3 Summary of Scottish Government procurement spend and savings in 2022-23

Key figures

• Spend by core Scottish Government and through collaborative frameworks combined was just over £2 billion, with savings of nearly £145 million (7%).
• Core Scottish Government spend through suppliers in reporting period 2022-23 was £637 million. The increase in procurement expenditure compared to the previous reporting year is largely due to the costs of resettling displaced Ukrainian people. Four call down contracts have been awarded relating to the Ukrainian Resettlement Fund, covering all aspects of the programme including accommodation, food, housekeeping and any other associated services e.g. security. These call downs have been awarded through a travel management provider which has its headquarters situated elsewhere in the UK, resulting in the increased spend figure having minimal impact on the statistics relating to Scottish/ Scottish SME spend and percentages, although all accommodation was Scottish and the services delivered direct to displaced people were of course delivered in Scotland.
• Total spend through our collaborative frameworks was over £1.3 billion, and savings achieved through these frameworks was just over £135 million (10%).

4.4 Summary of regulated procurements in the next two financial years

The 2014 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 128 procurements with a combined value of approximately £7.7 billion across our contracting scope.

We expect to award:

• Around 108 contracts for the sole use of the Scottish Government, with an approximate value of nearly £1.1 billion.
• 25 contracts worth around £64.5 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 36 national collaborative contracts/ frameworks will be awarded on behalf of Scottish public bodies, with a value of around £6.5 billion.

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