Scottish Government procurement annual report: 2019

5. Sustainable procurement and our approach to engaging SMEs, the third sector and supported businesses

We use the power of procurement to deliver outcomes that are good for businesses and employees; good for place and communities and good for society. This includes improving access to public contracts for SMEs, the third sector and supported businesses which is a key part of our approach to meeting the sustainable procurement duty. We also implement low carbon solutions and waste reduction strategies where appropriate.

SMEs

We continue to develop our procurement strategies to make our contracts more accessible and provide opportunities for SMEs to tender, win and deliver public sector contracts. As a result, in our collaborative procurements we consider splitting up larger value contracts and frameworks into specialist or geographical requirements. We also consider placing multi-supplier frameworks in order to create other supply chain opportunities wherever possible. And, we actively seek out opportunities for SMEs, third sector and supported businesses to compete within our supply chains. Our approach enhances the opportunities for smaller firms that otherwise might not be able to bid.

For example, as a result of the competitive tender exercise for a collaborative Print Services framework, Scottish Procurement awarded a total of 16 contracts to 14 suppliers across three separate Lots. All 14 suppliers appointed to the framework agreement were SMEs, 11 of which were Scottish based.

As a direct result of Scottish Government procurement activity:

• almost 60% of the 270 suppliers delivering our regulated contracts during the reporting period were SMEs;
• the Scottish Government’s direct spend with SMEs increased by 15% to £103 million with over 1,000 SMEs benefitting directly from Scottish Government business
  (Annex B); and
• three quarters of our 800 SME sub-contractors are based in Scotland and won work in our supply chain worth £44 million.

To help SME and third sector organisations who wish to tender for public sector contracts, we invest in the Supplier Development Programme which assists businesses to become tender ready for public procurement and improve their prospects of success when competing for public sector contracts.

The Third Sector

We deliver support to individual third sector organisations tendering for contracts. This includes training in how to get ready to tender, and tender writing through the recently re-let Business Support for Third Sector contract, delivered once again by Just Enterprise. It is a comprehensive programme of tailored business support, from start up, sustainability to scaling up and winning contracts.

We continue to fund the Partnership for Procurement, a programme that provides a range of support specifically to third sector organisations wishing to form consortia to bid for public sector contracts. The Partnership for Procurement website hosts the Ready for Business Register of social enterprises, which offers buyers the ability to search for organisations that identify as supported businesses by geographical location.

The Supplier Development Programme continues to be funded to extend its offer of training and support to the third sector as well as SMEs.

We awarded contracts to six third sector organisations worth around £3.65 million in total. In addition to awarding contracts to third sector organisations, all national collaborative framework agreements placed by the Scottish Government including those for Electricity, Natural Gas and ICT Client Devices are open for use by third sector organisations. Around 70 charities and housing associations are directly benefitting from these arrangements.

Supported Businesses

Our Procurement Strategy highlighted the importance we place on providing opportunities for supported businesses to participate in public procurement. Procurement legislation defines supported businesses as businesses for which the core purpose is the social and professional integration of disabled or disadvantaged persons and where at least 30% of the employees of those businesses are disabled or disadvantaged persons.

In addition to our other collaborative framework contracts, we appointed six suppliers to a new Supported Business framework in December 2018 with an advertised value totalling £12 million. This provides an easier route for public bodies to contract with supported businesses utilising frameworks for the following goods and services.

• Textiles and Personal Protective Equipment (PPE)
• Furniture and associated products
• Signage
• Document management

Spend with supported businesses during the reporting period totalled £6.38 million which includes £5.91 million under our Fair Start Scotland and Work First Scotland contracts.

Low Carbon Solutions

Examples of where we considered and applied low carbon solutions include the following.

ICT Hardware Frameworks

For the second year running Scottish Procurement was announced among the winners at the 2019 Green Electronics Council , EPEAT (Electronic Product Environmental Assessment Tool) Purchaser Awards. Awardees included businesses, institutions and government organisations from around the world.

The award recognises excellence and leadership in the procurement of sustainable IT products which reduce environmental impact across their lifecycle and are manufactured to conserve energy, minimise the use of environmentally sensitive materials, and increase recyclability.

All devices supplied under Scottish Procurement’s collaborative IT Hardware frameworks (Client Devices and Multi-Function Devices) are required to meet or exceed minimum energy efficiency levels based on the latest Energy Star and Green Electronics Council EPEAT compliance standards. This ensures that only the most energy efficient devices are available via our collaborative frameworks.

Over their lifetime, compared to products that do not meet EPEAT eco-label standards, IT Hardware purchased during the reporting period via Scottish Procurement frameworks will result in a number of environmental benefits. The Green Electronics Council estimates these include savings of 53,290 MWh of electricity – enough to power 4,387 households for a year, and a reduction of greenhouse gas emissions of 32,070 metric tons of CO₂ equivalents – equal to taking 6,867 cars off the road for a year.

Electricity Supply Contract

The new national electricity contract awarded to EDF Energy Customers Ltd is expected to save the public purse around £45 million during its lifetime. The contract is designed to support investment in renewables through Power Purchase Agreements, small-scale generation on the public estate, and by giving public bodies the ability to buy renewable energy. EDF has invested in large-scale renewable power projects in Scotland with further projects planned. They employ 1,300 staff in Scotland and support over 1,500 jobs in their Scottish supply chain.

Warner Homes Scotland

During the reporting period 3,800 Scottish households benefited from an installation under the Warmer Homes Scotland contract. This delivered average CO₂ reductions of 1.6 tonnes per household which equates to total CO₂ savings of 6,050 tonnes.

Additionally, we are engaged in providing support to wider (non-procurement) policy areas including:

• energy policy design by gathering and sharing data on energy consumption across the Scottish public estate to support statistical modelling;
• the Low Carbon Infrastructure Transition Programme fund by advising on how to increase the success of Heat Network projects under the fund.