Scottish Government procurement annual report: 2018

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

Our contracts deliver a wide range of economic, social and environmental benefits as well as significant financial savings for the public sector. Over the last ten years, our national and sectoral collaborative agreements delivered over £845 million in savings.

By March 2018 we had over 500 live contracts worth £4.7 billion with almost 350 suppliers, 60% of which are SMEs.

Details of our contract awards are available on the Public Contracts Scotland website. Our website also contains more information on our current collaborative agreements.

The savings we have generated from our collaborative and Scottish Government contracts are on track to exceed our £295 million three year savings target.

Fig 2 – Collaborative and Scottish Government savings against three-year target

4.1. Summary of Regulated Procurements Completed Between January 2017 – March 2018

During the reporting period we awarded almost 200 contracts regulated by the Procurement Reform (Scotland) Act 2014 (those which are individually worth at least £50,000 if for goods and services, or £2 million if for works) which in total were worth over £550 million.

Adding these to existing contracts brought total spending to over £1.2 billion by March 2018 with our contracts saving the public sector almost £160 million.

Fig 3 – Spend and savings delivered during reporting period

The spend shown in figure 3 on collaborative frameworks includes where these have been established by Scottish Ministers, but are being used by other Scottish public sector bodies.

In addition our Central Government Procurement Shared Services ( CGPSS) team awarded 36 contracts at an advertised value of £30 million on behalf of other central government bodies with savings of £4 million. These bodies are separate organisations to the Scottish Government and, if applicable, will report separately.

4.2. Review of whether our procurements kept to our Procurement Strategy published on 31 December 2016

Our first Procurement Strategy set out how we planned to carry out regulated procurement exercises. This first annual procurement report reflects on whether those procurements complied with that Strategy during the period January 2017 to March 2018.

During that period, all regulated contracts were awarded in a way which meets the policies and principles set out in the Strategy, and throughout this report we explain how this has been achieved.

We recognise the importance of having a licence to procure. Key to this is making sure that those involved in awarding and managing contracts have the professional skills, knowledge, qualifications or experience to do so and that we continue to invest in their skills and capability development through our People Capability Strategy.

We have a scheme of 'delegated purchasing authority', which means that no member of staff is authorised to enter into a contract without written delegated authority to do so from our Director of Procurement. That delegated authority is only given to those who can demonstrate the appropriate skills, knowledge of our procurement policies and of our legal obligations.

We initiated a programme of commercial capability training – with supporting project assurance, guidance, tools and advice – targeting all Scottish Government civil servants to ensure they understand and can contribute to our wider commercial and sustainability ambition.

4.3. Summary of regulated procurements in the next two financial years

We anticipate starting around 150 procurements worth almost £5 billion in the next two years. A full list of known regulated procurements is in Annex A.

Of these we expect that:

• Over 90 contracts will be awarded for the sole use of the Scottish Government, with an approximate value of £650 million.
• Fifteen contracts worth around £50 million will relate to the services required to support the additional powers devolved to the Scottish Government by the Scotland Act 2016.
• Around 50 collaborative contracts will be awarded on behalf of Scottish public bodies, with an approximate value of £4.2 billion.