Scottish Government procurement annual report: 2019

3. Key Priorities

Procurement is a key part of the Scottish Government’s approach to achieving its purpose of creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable and inclusive economic growth. This is underpinned by the National Performance Framework, by Scotland’s Economic Strategy and our annual Programme for Government which sets out our plan for policy delivery and legislation over the next year.

The sustainable procurement duty, outlined in the Procurement Reform (Scotland) Act 2014, aligns with this purpose and is underpinned by the National Performance Framework.

The National Outcomes and Indicators are embedded in the sustainable procurement tools which provide a structured approach to what we procure. They help identify opportunities to include economic, social and environmental considerations in contracts and show how our procurement activity contributes to the National Outcomes and, in turn, to Scotland’s Economic Strategy.

To support this for each procurement project valued at £50,000 or over, we develop sourcing strategies that are supported by the Sustainability Test and where appropriate the Sustainable Public Procurement Prioritisation Tool (SPPPT)

Compliance with the sustainable procurement duty is how we contribute to, and track our contribution to the Scottish Government’s purpose and priorities. Key priorities are defined in Scotland’s Economic Strategy as:

• promoting inclusive growth and creating opportunity through a fair and inclusive jobs market and regional cohesion;
• investment in our people and our infrastructure in a sustainable way;
• fostering a culture of innovation and research and development; and
• promoting Scotland on the international stage to boost our trade and investment, influence and networks.

3.1 Inclusive growth

We have defined inclusive growth as ‘growth that combines increased prosperity with tackling inequality; that creates opportunities for all and distributes the dividends of increased prosperity fairly’.

Procurement contributed to inclusive growth and local economic wellbeing by:

• providing community enhancements in addition to training and employment opportunities and local community benefit;
• driving Fair Work practices;
• using our market knowledge, systems and processes to improve access to our contract opportunities for SMEs, the third sector and supported businesses; and
• seeking low carbon solutions.

Examples of our contribution are included within the relevant sections of this report.

3.2 Investment

Infrastructure investment to create jobs, help businesses and support delivery of better and modern public services and growth in the Scottish economy remains a top priority for the Scottish Government. Our infrastructure investment project pipeline is available at – http://www.gov.scot/Topics/Government/Finance/18232/IIP/IIPProjectPipelineUpdate

Procurement underpins our investment in people, infrastructure and assets. We used well-designed procurement of goods, services and works as a driver of business growth and innovation with many of our procurement projects directly enabling the Scottish Government’s wider ambition in this regard.

Examples of our approach and commitment in this area include the following.

Scottish 4G Infill Programme

During the reporting period, the Scottish Government made a grant funded investment of up to £25 million in the Scottish 4G Mobile Infill (S4GI) programme which aims to push 4G coverage beyond commercial rollout. S4GI will deliver future-proofed, 4G mobile infrastructure and services to selected mobile ‘not-spots’ throughout Scotland. The programme is currently focusing on the deployment of 45 mast sites, over the course of four years. Deliverability of mobile services to these challenging locations will be dependent on a number of factors, primarily the supplier’s ability to secure the commitment from at least one mobile network operator to deliver 4G mobile services from each site. The contract also makes provision for a Community Benefit Fund to be used towards providing support for connectivity related projects run by local community groups. It is envisaged that the fund will be active from 2020.

Non-Domestic Energy Efficiency Framework

Our Non-Domestic Energy Efficiency framework delivers energy-efficiency retro-fit works into public sector buildings. During the reporting period, investment in these projects to improve public service infrastructure and assets amounted to almost £14 million across five separate providers and nine public bodies. It is anticipated that these projects will deliver annual savings to public bodies totalling almost £800,000.

Next Generation Access (NGA) Infrastructure

To help achieve the Scottish Government’s commitment to provide all homes and businesses across the country with access to superfast broadband, we undertook extensive dialogue during 2018/19 to inform the £600 million Reaching 100% (R100) procurement process. By promoting competition, this process should also enable better outcomes for the people of Scotland, with contracts due to be awarded later this year.

Construction Procurement

In December 2018, we published the “Construction Procurement Handbook”. This was the first of three handbooks, which together will comprise the updated “Construction Manual”, assisting contracting authorities to successfully develop and deliver their construction projects and to effectively manage risk and achieve value for money. We will also look to provide further guidance on additional aspects of the development and delivery of construction projects throughout their whole life cycle, through the publication of additional handbooks.

As committed in the Economic Action Plan, we established a new strategic Leadership Forum between the Scottish Government and Construction Scotland and we look forward to working collectively to form a refreshed and stronger relationship between the industry and government around a set of common goals to help the sector grow.

3.3 Innovation

The Procurement Reform (Scotland) Act 2014 places a duty on public bodies to consider how, through their procurement activities, they can promote and support innovation in the way in which public sector services are provided in Scotland.

The cross-sectoral procurement Innovation Leadership Group was established to improve the outcome of innovation related projects and the 2018/19 Programme for Government included a commitment to set up “Innovation Partnerships”.

Achieving Policy Goals

Our approach to using innovation as a means of achieving policy goals, delivering sustainable growth and enhancing value for money for money for public services was recognised in the European Commission’s Guidance Note on Innovation Procurement published in May 2018.

The Guidance Note recognised the success of our approach to delivering a wide range of training and guidance to the public sector in Scotland so that they would understand the policy priorities and flexibilities afforded by the Procurement Reform (Scotland) Act 2014 and in particular the introduction of the sustainable procurement duty designed to deliver added social and environmental benefits.

Innovation Partnerships

During the reporting period we have worked collaboratively with other public bodies in the Health and Local Authority sectors, to establish the Innovation Partnership procurement process which is designed to allow the co-development of new public services with the private sector.

During the reporting period we commissioned two projects. The first of these seeks to remove or reduce the bottleneck for gastrointestinal disease and bowel cancer risk assessment by negating the need for more invasive test procedures to be carried out in hospital. The second project is aimed at finding a solution to pre-emptively identify and mitigate the main typologies of illness resulting in loss of focus, fatigue consciousness or paralysis amongst tram drivers, which could create conditions for loss of capacity.

CivTech® Programme

Our CivTech® Programme continues to address public service challenges in an innovative way, rather than relying on established methods. The project involves public organisations setting civic challenges which smaller businesses are encouraged to tackle using innovative solutions. It enables the rapid development of creative, cost-effective solutions delivered by those businesses. CivTech® is providing pathways for tech SMEs and start-up businesses to secure public sector contracts. It offers real opportunities to deliver even better services for people and even better value for service providers.

The CivTech® approach is valued in procurement because of the innovative way it finds solutions to challenges and helps solve the problem of “how do we procure technology that we don’t know exists”?

Started in 2016 as a pilot, CivTech® was the first pan-public sector tech accelerator of its kind and has already demonstrated its ability to build businesses and create jobs, while driving improvement in the delivery of public services as well as enhancing our international reputation for innovation.

CivTech® 3.0, the third cycle of this initiative, launched in June 2018 with ten challenges ranging from tackling illicit trading; improving hospital waiting times; to driving up standards in social housing and protecting the digital footprint of young people. In addition, CivTech®, working with Scottish Government procurement has further innovated on its model and successfully demonstrated an approach to putting citizens at the heart of innovation procurements. The CivTech® Wildcard Challenge saw young people from Stirling lead a Challenge Sponsor Team which went on to win the Citizen Collaboration award at the Holyrood Connect Scottish Public Sector ICT awards in recognition of their groundbreaking work.

Dynamic Purchasing Systems (DPS)

During the reporting period, we continued to develop our innovative approach to the procurement of Digital Technology Services. We expanded our available Dynamic Purchasing Systems (DPS) to include arrangements for Telephony Services and Network Advice and have plans to extend further to include Internet of Things during 2019. Our DPS arrangements have so far provided over 400 suppliers (98% of which are committed to paying the Real Living Wage and 79% of which are SMEs) with direct access to Scottish public sector opportunities forecast at over £80 million.

3.4 Internationalisation

Our approach to improving public procurement is recognised internationally whether it be in developing suppliers, leading innovation, or through our international engagement in supporting the development and sharing of best practice.

Our involvement with suppliers and their supply chains is aimed at developing their potential to bid for public contracts, whether they are advertised in Scotland, the UK or further afield in Europe or the rest of the world.

Within the reporting period, we continued to progress the implementation of our Open Contracting Strategy by:

• including a new “Transparency Clause” in our standard terms and conditions of contract, which informs bidders of our intention to proactively publish contract documents; and
• further developing Public Contracts Scotland (PCS), to ensure that more of the procurement information published on the website is in line with the internationally recognised Open Contracting Data Standard (OCDS). This means that more data is now available in open, reusable formats that enable greater transparency.

We made a number of new commitments in Scotland’s Open Government Action Plan: 2018-2020 which will further increase procurement transparency and participation.

These include:

• consultation with civil society on how best to make published procurement information useful and accessible to a wide audience;
• publication of Scottish Government contract documentation, starting with large collaborative frameworks; and
• publication of Scottish Government procurement related spend.

We benchmarked and promoted several of our collaboratively developed national tools, leading global practice and promoting Scotland on a world stage. We demonstrated our Procurement Journey tool to representatives of other governments and shared the development and management processes used to create this with a number of government departments across the UK and the rest of the world.

• The refreshed Procurement and Commercial Development Framework (and supporting online App) was launched, designed to assess skills, identify training needs and support career planning within the procurement function.
• These and other Scottish Government tools and approaches have been cited as exemplars of best practice in European publications, and as a result we were invited to support the EU Commission in the development of a European Competency Framework for Public Buyers.

We were asked to participate in international programmes, conferences and events and also hosted visits from other governments. During the reporting period these included.

eCommerce Solutions

• Participation in the ‘European Commission’s Multi-Stakeholders Expert Group’ on eProcurement (EXEP) which assists and advises Member States and the Commission on the implementation of the electronic procurement provisions contained within the European Public Procurement Directives.
• Invitations to present and host workshops on our approach to eCommerce including at the World Bank’s Global Conference on eProcurement; European Commission’s UK eProcurement Workshop and in online webinars with Member States supported by the Connecting Europe Fund.

Procurement of Innovation

We are;

• a member of the Advisory Committee of the European Innovative Procurement for Health Innovation, an EU funded initiative to foster the introduction of innovation in healthcare through procurement: and
• a recognised Competence Centre for Procurement of Innovation (PoI) within Europe with active participation in the Urban Agenda Partnership for Innovative and Responsible Public Procurement.