Scottish Government procurement annual report: 2020

3. Key priorities

The Scottish Government’s key priorities for procurement are enshrined in the sustainable procurement duty, outlined in the Procurement Reform (Scotland) Act 2014 and is underpinned by the National Performance Framework. The Key Priorities are centred on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable and inclusive economic growth. This is underpinned 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 is supported by tools which include the National Outcomes and Indicators and provide a structured approach to what we procure. They help public bodies 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.

We develop sourcing strategies for each procurement project worth £50,000 or more. This work is supported by the Sustainability Test and, where appropriate, the Sustainable Public Procurement Prioritisation Tool (SPPPT). We track our contribution to the Scottish Government’s purpose and priorities through our compliance with the sustainable procurement duty. 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

The Scottish Government defines 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 continued to contribute 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
• Taking actions to address the Climate Emergency.

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 here.

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.

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 an extensive competitive dialogue process to inform the £600 million reaching 100% (R100) procurement. This R100 programme, building on the previous successful Digital Scotland Superfast Broadband (DSSB) initiative, together with commercial and a national superfast voucher scheme, will provide everyone in Scotland with access to superfast broadband. Two of the three lots have been awarded during this reporting period and the third one is scheduled to be awarded in the next reporting period. The R100 contracts make provision for, and secured, a number of Community Benefits, such as targeted recruitment, apprenticeships and educational benefits to communities. These benefits will be realised in the next reporting periods as the contracts progress through the deployment phase.

Scottish 4G Infill programme 

During the reporting period, the Scottish Government made a grant-funded investment of £7.3 million in the Scottish 4G Mobile Infill (S4GI) programme (out of an overall programme value of up to £25 million). The programme aims to push 4G coverage beyond commercial rollout and is delivering future-proofed, 4G mobile infrastructure and services to selected mobile ‘not-spots’ throughout Scotland. The programme is expected to deploy up to 40 mast sites, over the course of its five years. The programme delivered the first live site at New Luce in Dumfries and Galloway in February 2020, and a pipeline of other activations are scheduled to take place by 2023. 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 launch in 2021.

Collaborative construction 

The Construction Portfolio is new to the Scottish Government’s procurement directorate, with the team being established on 1 October 2019. A review of construction spend from the Scottish Procurement Information Hub over the past five years has provided an indicative spend area of c£2.8 billion per annum and a list of commodities to be procured. During the reporting period, a Construction Portfolio Review - which includes a Procurement Strategy for a Civil Engineering Framework - has been signed off by the Scottish public sector procurement Centres of Expertise. We expect to award a civil engineering framework in summer 2021.

We will continue to work with the Centres of Expertise, SG Construction Policy and Industry to agree our programme of procurement activity. 

Our Construction Portfolio Review and Civil Engineering Procurement Strategy, contain many proposals to meet the Inclusive Growth agenda. We have split our Framework into geographic and value band lots, with the intention that this will address rural and local competition and maximise opportunities for SMEs. Our Framework evaluation criteria will examine delivery models for national suppliers to understand the extent of their supply chain, and our terms and conditions will place an emphasis on the need to advertise, in the Public Contracts Scotland portal, any work packages which are not already provided for within existing supply chains, along with the importance, particularly on islands, of using rural SMEs.  

Within our requirement, we will include the need to deliver Community Benefits and to encourage the use of Supported Businesses. As part of our procurement evaluation, we will evaluate bidders’ approach to Fair Work First practices, payment of the Real Living Wage, verify their position with regard to signing-up to the Business Pledge, and commitments will be monitored throughout our Framework duration.

In addition, we will include a need for compliance with the Modern Slavery Act 2015, with this requirement forming a key element of our specification. Again, this will be examined in our Evaluation Criteria Delivery Model, to assess supply chain risk.

During 2019/2020, we have completed publication of the ‘Client Guide to Construction Projects’ In total, three handbooks have been published since 2018:

• Handbook 1: project initiation and business case handbook 
• Handbook 2: construction procurement handbook
• Handbook 3: construction phase handbook

These handbooks form a suite of guidance which aims to assist contracting authorities in becoming more “intelligent clients”, allowing them to work more closely and co-operatively with contractors and consultants to deliver successful projects.

The guidance is primarily to help clients better manage their construction projects, but should also be of assistance to contractors and consultants alike in developing their understanding of how the public sector delivers construction projects. We will continue to update and add new chapters to the Client Guide as the need arises.

We have piloted the Construction Capability Assessment Tool, which allows contracting authorities to assess their ability to procure publicly-funded construction. Feedback from the pilot process has been analysed and utilised in the creation of a finalised version.

In response to a commitment arising from the Economic Action Plan, the new strategic Construction Leadership Forum, a collaborative initiative between Scottish Government and Construction Scotland, has been established and is now working collectively, forming a 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 in the Scottish public sector. It has commissioned work through the year, including national guidance on innovation; specification for improvements to procurement systems to enable improved management information on innovation projects; increased transparency for suppliers; and worked closely with cross-sector partners to establish and deliver the first Innovation Partnership contract, Scotcap.

Case study: Innovation Partnerships - Scotcap

Scotcap seeks to reduce the bottleneck affecting the diagnosis of gastrointestinal disease, including bowel cancer, by negating the need for more invasive test procedures which are carried out in hospital, and by creating diagnostic capacity. A new clinical pathway has been developed, using a ‘Pill Camera’, to carry out a diagnostic test for bowel disease within the community. The work was sponsored by the Health and Social Care Directorate, Modernising Patient Pathways Programme, and led by Professor Angus JM Watson, Consultant Colorectal Surgeon, NHS Highland. Instigated through the Scottish Government’s Procurement Innovation Leadership Group, the process involved the NHS, Scottish Government and a wide variety of other partners – both public and private sector – working together to solve a societal problem, by managing the innovation cycle, inclusive of research, development and commercialisation through one regulated procurement process.

Professor Watson notes; “The Scotcap Innovation Partnership has allowed iterative research and development to be conducted within a procurement process for the first time. This has led to an agreement by clinical leaders about the diagnostic pathway across Scotland, but also notably, has allowed the delivery of the service in all Scottish Health Boards. It has demonstrated the value of procurement working with clinicians and other partners to create new innovative patient centred services. I am delighted to be part of this ground breaking work and team.” 

The Director of Modern Patient Pathways commented “This new collaborative way of working through a structured approach has enabled joint working amongst many partners to create a common “once for Scotland” approach”. 

CivTech® Programme 

CivTech® continues to address public service challenges in an innovative way. The programme, supported by Scottish Procurement and Property directorate, involves collaborative solving of problems faced by public sector organisations, creating better products and services and, by doing so, helping create high-growth potential businesses. It enables the rapid development of creative, cost-effective solutions delivered by those businesses. 

Achieving policy goals

We have undertaken a range of work to drive understanding of how public procurement can contribute to inclusive, sustainable growth and wellbeing. For example, we have set up the cross-sector Climate and Procurement Forum to mobilise public procurement’s contribution to addressing the Climate Emergency. We are working with colleagues across Scottish Government and the wider public sector, primarily through City and Region Deals, to ensure the impetus provided by the Procurement Reform (Scotland) Act 2014 to use public procurement activity to contribute to national and local priorities, in-line with the National Performance Framework, takes effect. 

We have also published Scottish Procurement Policy Notes (SPPN) on using PCS to advertise sub-contracting opportunities, making them more accessible to Scottish suppliers (SPPN 5/2019) and clarifying measures to guard against Human Trafficking & Exploitation (SPPN 3/2020). We have undertaken research on the value and impact of the sustainable procurement duty since its introduction. We expect this to be published towards the end of 2020 and to inform future work. 

Dynamic Purchasing Systems

We have continued to develop and implement our innovative and flexible approach to the procurement of Digital Services. Within our collaborative ICT team we have now established four Dynamic Purchasing Systems (DPS) covering Digital Technology Services, Telephony Services, Network Advice and Internet of Things and, with each iteration, we are learning and improving on the process. Our DPS arrangements have so far provided over 400 suppliers (over 98% of which are committed to paying the Real Living Wage and over 77% of which are SMEs) with direct access to Scottish public sector opportunities, forecast at over £75 million over the duration of the DPS’. 

Our More Powers Implementation Team has established their first DPS to enable the Social Security Directorate and Social Security Scotland to award future contracts for ongoing Social Programme Management development and support. The DPS includes three suppliers, one of which is an SME.

3.4 Internationalisation

Our work continues to be recognised internationally. Our Scottish National Procurement Competency Framework, which is already seen globally as an exemplar of its type, has helped shape the European Competency Framework (ProcurCompEU) launched in 2020 by the European Commission. Our approach to talent management and development in the procurement profession was the focus of an international case study by the Procurement Leaders network and shared with its global membership. In particular, they highlighted our innovative Procurement People of Tomorrow programme and our commitment to Continuous Professional Development.

In the reporting period, the Scottish Government has been supporting the Organisation for Economic Co-operation and Development (OECD) and the World Bank in their work to further improve procurement globally in countries such as New Zealand and Romania. Additionally Scotland has also participated and contributed to work with other European Countries through the Urban Agenda, a multi-level method to promote cooperation between countries and cities and other stakeholders to promote growth, viability and innovation to identify and successfully address social challenges. The Urban Agenda focuses specifically on three pillars of policy making and implementation through better regulation, funding, and knowledge sharing.

In addition, the Scottish Government is represented on the Chartered Institute of Procurement and Supply’s Global Foundation Steering Group, leading the development and implementation of their international philanthropic strategy. The Foundation’s mission is to improve people’s lives through better supply chains, with aims aligned with UN Sustainable Development Goals. This has included very active engagement and support of partnerships with Action Aid in Africa and Bangladesh.  

In June 2020, the Scottish Government developed and delivered a presentation on the Power of Procurement to the Agrifood Knowledge Transfer Network (KTN) across Africa. As well as sharing the work of the CIPS Foundation and its Agrifood projects, we promoted Scottish Government resources and toolkits to underpin better procurement and supply chain management in the Agrifood industry. The presentation was recorded and shared widely across the global procurement and supply network, and the KTN have requested to use it with PhD student placements and for highlighting more broadly to early career researchers.