Procurement strategy: April 2021 to March 2023

1. Introduction

This document sets out the Scottish Government's updated procurement strategy for 2021-23. It describes how we plan to carry out our procurements for the period
1 April 2021 to 31 March 2023.

In this strategy we reflect on the commitments described in the Economic Recovery Implementation Plan that was published in August 2020 and the Government's Programme for Scotland published in September 2020. This includes using the £12.6 billion annual Scottish public procurement spend to boost inclusive economic recovery, support longer term economic wellbeing and to support our climate emergency response. In doing so, we will work collaboratively across the public sector. Also, our tools and guidance are intended to influence and empower buyer, supplier and key stakeholder communities to use public procurement to support an inclusive and green economic recovery.

Overall, this strategy outlines how we will use the power of procurement to deliver and influence outcomes that are good for businesses and their employees, good for places and communities, good for society, and that are open and connected with the communities we serve.

The broad principles and policies described in this renewed strategy are expected to remain relevant until at least 31 March 2023. We will, however, continue to review our strategy at least once a year and make changes to it if these are needed to ensure that it remains current. We will publish any new versions on our website.

Scottish public procurement rules and scope of this procurement strategy

Legislation governs how Scottish public bodies buy their goods, services or works. One of the things that it requires us to do is to publish a procurement strategy, or to review an existing one, to set out how we plan to carry out our regulated procurements for a set period. Regulated procurements are contracts of values of £50,000 and above for goods and services and of £2 million and above for works. Our procurement strategy must include statements about how our procurements contribute to the following themes:

• the carrying out of our organisational functions and purpose;
• the delivery of value for money; and
• how our procurements will be carried out in accordance with our general duties which include the sustainable procurement duty (see section 4 for a description of the sustainable procurement duty).

These statements are in Part 1 of this procurement strategy.

Our procurement strategy must also include statements about our general policy on:

• community benefit requirements in our contracts;
• consulting and involving people affected by our procurements;
• Fair Work practices including paying the 'real' Living Wage to people involved in the delivery of our contracts;
• how we will promote compliance by contractors and subcontractors with the Health and Safety at Work etc. Act 1974;
• the procurement of fairly and ethically traded goods and services;
• how our procurements, involving the provision of food, will improve the health, wellbeing and education of communities and promote the highest standards of animal welfare;
• paying our invoices (or a similar claim) to contractors and subcontractors in 30 days or less; and
• how we will prioritise and take account of climate and circular economy in our procurement activity and as described in our Scottish Procurement Policy Note SPPN 1/2021: Taking account of climate and circular economy considerations in public procurement.

These statements are in Part 2 of the document and are the principal areas that we will monitor in our annual procurement report of our performance against this strategy.

Public Procurement in Scotland

The Scottish Government is responsible for developing public procurement policy and legislation in Scotland and, like all public bodies, its own procurement activity. These functions are managed through our Scottish Procurement and Property Directorate (SPPD). There has been a substantial programme of activity across the public sector in Scotland to help improve procurement since 2006. We have moved from a centrally led programme to a more collaborative landscape with a shared common vision, underpinned by the Procurement Reform (Scotland) Act 2014 ('the 2014 Act'). The 2014 Act provides clear direction to public bodies and sets out clear procurement responsibilities and accountabilities, promoting local decision making.

We remain committed to doing more to continually improve procurement approaches and outcomes, assessing the effectiveness of steps already taken. For example, we recently published external research on the impact and value of the sustainable procurement duty and have undertaken a survey of suppliers. The outcomes from these, and other forms of engagement and assessment, will help us to identify where there are opportunities for further improvement and which we will take forward.

We promote early engagement with our stakeholders and clients to improve

commercial outcomes. Our role within this landscape has expanded:

• from leading processes and procedures to one where we strive for even greater impact and influence;
• from having a focus on contracting and compliance to being a critical friend and trusted adviser;
• from approving and endorsing to stimulating and challenging approaches; and
• from central resourcing to flexible resourcing models.

The following groups help to drive activity that supports our ambition to maximize the impact of procurement:

• The Public Procurement Group (PPG) is the leadership group for public procurement across Scotland. It is made up of the heads of Procurement Centres of Expertise and senior Scottish Government procurement officials, who work together to set the strategic direction for public procurement in Scotland.
• The Procurement Supply Group (PSG) includes representation from the Scottish Government and representative bodies for business and the third sector. It meets regularly to discuss and influence public procurement policy and practices as these affect suppliers, in particular, small and medium sized enterprises (SMEs)^[1], the third sector^[2] and supported businesses^[3]. The PSG is consulted on key policy developments, live issues and priorities and helps to inform improvement opportunities.
• The Collaborative Leads Group, the Policy Forum, The Climate and Procurement Forum, the Construction Leadership Forum and the Professional Practice and Development Forum provide other means of collaborative, cross-sector engagement on policy, practice and information sharing.

More information about some of these groups and SPPD's vision, mission and aims is available on our website.

SPPD also provides a range of commercial, property, and capability development services for the Scottish Government and
the wider Scottish public sector.

eCommerce and Procurement Best Practice

We provide an eCommerce and Procurement Best Practice Shared Service that allows public bodies to carry out procurements and business transactions electronically. eCommerce brings efficiencies and savings to public organisations by reducing the time it takes to get the goods, services and works needed to deliver public services. It brings benefits to suppliers such as providing access to contract opportunities and more efficient ordering and payment processes. These solutions are regularly upgraded and developed to ensure that they continue to meet user requirements and deliver additional efficiencies and benefits. We also provide a number of procurement best practice tools to improve and enhance procurement capability across Scotland. Our eCommerce solutions and procurement best practice tools are described below:

• Public Contracts Scotland (PCS) is a one stop shop for suppliers looking for Scottish public sector contract opportunities. PCS has enabled stronger communication links between buyers and suppliers. The use of it by Scottish public bodies to advertise their regulated contract opportunities is mandatory.
• PCS – Tender is the national e-tendering service that allows suppliers to submit tenders for a public contract in electronic format. It also enables public bodies to manage their contracts and suppliers electronically.
• The Procurement Journey provides an online single source of procurement guidance and documentation for the Scottish public sector. After significant stakeholder engagement it was upgraded and relaunched in March 2020 with improvements to both its functionality and content. Its purpose is to communicate and drive best practice and compliance throughout the Scottish public sector from simple purchases to complex procurement exercises. The Procurement Journey is kept up to date to reflect current legislation and policy.
• The Supplier Journey provides online guidance to suppliers to make it easier for them to bid for public goods and services. It was updated in March 2020 with improved functionality to support businesses when bidding for public contracts.
• The Sustainable Procurement Tools provide a range of online assessments. These include the Flexible Framework which allows public bodies to assess their progress, with respect to the sustainable procurement duty, and which will generate an action plan to enable further progress; the prioritisation methodology, a tool that can be used at an organisational, and at a category, level to identify risks and opportunities associated with planned procurement activity and to help plan resource allocation to address these; the sustainability test and Life Cycle Impact Map, that identify risks and options at an individual procurement level; and an extensive suite of guidance to help public bodies to achieve positive economic, social and environmental outcomes.
• The Procurement and Commercial Improvement Programme (PCIP) can also be found within the Procurement Journey. This continuous improvement programme focuses on the culture, scope and approach of the organisation which manages, supports and enables procurement activity from the identification of a need through to contract delivery. It is based around set questions and other evaluation methods with a detailed examination of activities such as contract management, ensuring that procurements are conducted sustainably, and some other indirect areas such as continuous professional development. Organisations can then, based on the outcome of the assessment, develop an action plan to achieve maximum value for money and improve their ability when buying goods, services and works. The PCIP assessment tool and process is regularly reviewed to ensure it continues to reflect current legislation and best practice.
• The Scottish Procurement Information Hub is a sophisticated spend analysis tool that provides reporting capability on procurement spend by key public bodies. It enables public bodies to see their spend, identify who their key suppliers are, highlight spend with SMEs and local suppliers and identify potential collaborative opportunities.
• PECOS (Professional Electronic Commerce Online System) automates the purchase to pay process from creating shopping baskets, raising orders and presenting valid invoices for payment. It also embeds standard and consistent business workflows and audited approval processes to ensure compliance with procurement and finance guidelines.
• eInvoicing is delivered through PECOS and enables the receipt of electronic invoices from suppliers. These are then automatically passed quickly to public bodies for matching and payment in their finance systems.
• Catalogue Management is also delivered through PECOS. It manages catalogues that are made available as a result of national, sectoral or local contracts. It allows catalogues to be published in a number of ways that can easily be accessed by purchase to pay systems (including PECOS) that are in use across the Scottish public sector.
• The Single Procurement Document (SPD) (Scotland) must be used in Scotland for procurements regulated under the Public Contracts (Scotland) Regulations 2015 and is recommended for all other procurements. The SPD helps reduce the administrative burden on bidders and removes some of the barriers to participation in public procurements especially for SMEs. It allows buyers to identify suitably qualified and experienced bidders and replaces the requirement for suppliers to provide up-front evidence or certificates by allowing them to self-declare that they meet the relevant criteria. Bidders are also able to store and reuse their information for future use. We continue to update the SPD in response to feedback from suppliers.

We invest in the capability and skills of our procurement and property teams and others involved in procurement and commercial activity. Our professionalisation strategy includes local and national talent creation, development and retention programmes to help us achieve professional excellence against national policy and standards.
This includes:

• The Procurement People of Tomorrow programme, which focuses on encouraging, enabling and developing new entrants in our profession across Scotland and embedding diversity within our teams.
• Setting professional standards for procurement and commercial practice across Scotland, underpinned by our National Procurement Development Framework, facilitating effective recruitment, continuous professional development and career paths.
• Our People Capability Strategy, which embeds a supportive and learning culture, assessing and addressing evolving learning priorities.
• The Scottish Government Delegated Purchasing Officer Scheme, ensuring that those authorised to award contracts within the Scottish Government have the necessary qualifications, training or experience for their level of delegated responsibility.
• The Scottish Government Contract and Supplier Management programme, which ensures that those accountable for managing contracts within the Scottish Government have the necessary training and tools to drive the delivery of those contracts.
• The Commercial Capability programme, which seeks to improve commercial outcomes through targeted training and earlier engagement with clients and commissioners. This is underpinned by our National Procurement Development Framework, which sets out procurement and commercial standards and facilitates continuous professional development and career paths.

EU-Exit and COVID-19

We continue to monitor the level of
any impact associated with EU-Exit and COVID-19. Engagement with key suppliers focuses on preparedness and contingencies to minimise disruption and/or adverse commercial outcomes. We are working collaboratively with sectoral procurement Centres of Expertise and UK Government commercial colleagues to share knowledge
to ensure an aligned approach.

Last year we updated Scottish procurement legislation as the UK's Transition Period on exiting the EU ended. The changes to legislation are technical and do not fundamentally change the procedures and processes of advertising and awarding public contracts. Our systems and guidance were also updated to support this change.

We are continuing to support our suppliers through the pandemic, with supplier relief initiatives. We are taking the opportunity of this update to our corporate procurement strategy to reinforce our commitment to inclusive economic recovery. In doing so, we outline some high priority policies that we aim to support through procurement, like building resilient and responsive supply chains and our climate emergency response. We will also continue to promote and deliver market-friendly approaches to procurement in support of sectors restarting post COVID-19.