Scottish procurement policy handbook

7. Competition and document retention

Competition and advertising

Contracts must be awarded through genuine and effective competition unless there are exceptional and justifiable reasons not to do so. Individuals with the appropriate level of DPA are responsible for identifying the most appropriate procurement process that is likely to offer the best VfM.

As part of developing a commodity/service strategy, consideration should be given to any existing contracts and framework agreements which may be appropriate for the procurement.

Caution must be exercised regarding the use of speculative frameworks. Some factors to be considered in this area can be found in SPPN 3/2017.

A Procurement Officer can use the Quick Quote function (an online competition process within PCS) to undertake a competitive quotations process for a low value and low risk procurement, however a decision may be made to conduct an open competition for such a procurement if more suitable. The Quick Quote function can also be used to run a mini competition (further competition) to call off from a framework as the functionality allows the Procurement Officer to restrict the suppliers being invited to tender to the appropriate framework suppliers only.

All advertising notices for competitive tendering procedures for Regulated Procurements must be advertised on Public Contracts Scotland (PCS).

The award of a contract or the conclusion of a framework agreement must also be published on PCS. Exemptions to some or all of these publication requirements apply in certain circumstances. For more information see regulation 51(6) of the 2015 Regulations and regulation 7(8) of the 2016 Regulations.

For Research & Development/innovation services more information can be found on the Procurement Journey.

PCS has more information on how to complete notices which can be found in the Buyers’ Area of PCS. Please also see threshold and contract value estimation FAQs.

PCS can also be used to advertise sub-contracting opportunities to promote a diverse and resilient supply chain, opening up opportunities for SMEs, the third sector and supported businesses as appropriate. For more information please see SPPN 5/2019.

In addition to forms contained within systems, such as PCS and PCS-Tender, a number of templates and other relevant documents can be found in the Procurement Journey Document Library which can be useful to consult when planning procurements.

Direct Award (award of contract without competition)

For a direct award there should be a process for considering requests to:

• dispense with competition and award a new contract directly to a specified supplier
• modify an existing contract where there is no clear, unequivocal clause to do so within the existing contract.

Buying goods, services or works without competition should require prior approval by someone who will not otherwise be involved in the award of the contract before any purchase is made. Approval should be granted in exceptional circumstances only and obligations under procurement legislation must be considered.

Regulation 72 of the 2015 Regulations includes specific provisions on the circumstances in which changes or variations may be made to a current contract without requiring a new procurement procedure. Depending on contract value, either regulation 33 of the 2015 Regulations or regulation 6 of the 2016 Regulations set out circumstances in which a contract can be awarded without competition. When considering any of these, the overarching principle is that they should only be used in limited circumstances, in accordance with internal manuals/instructions and, where required, legal advice.

Whilst a decision on whether there are grounds to justify the direct award of a public contract should consider all relevant legal obligations and any decision should be taken on the merits of the individual case, some examples of where grounds may exist include, but are not limited to:

• extreme urgency due to unforeseen circumstances, covering the immediate need
• where there is only one possible supplier
• modifying an existing contract where the modification is not substantial.

Factors which may not constitute sufficient grounds include but are not limited to:

• lack of planning on the public body’s behalf (e.g. of scope, timelines or risk)
• lack of internal resources.

Please note the process involved in awarding a contract where there has not been any prior competition (i.e. a direct award) is very similar to the process of awarding a contract after a competitive tendering process. There is still a requirement for a Procurement Officer to undertake many of the steps that would form part of a competitive tendering exercise, such as ensuring a specification sets out key deliverables with timelines, the contract will deliver VfM and due diligence is undertaken in advance of entering into any contract.

In all cases, the guiding principles are that direct award approval is by someone authorised to take such a decision and that person should have no other role in the award of the contract to ensure adequate separation of duties. For audit purposes, the direct award justification and approval must be formally recorded along with robust supporting evidence.

Retention of documents

Public bodies should ensure that they keep sufficient documentation on their official records management system to justify the decisions they take at all stages of the procurement process. These documents include:

• communications with bidders and internal deliberations
• preparation of the procurement documents
• dialogue or negotiation (if any)
• selection and award of the contract.

The documentation referred to above must be kept for a period in line with the relevant public body’s governance arrangements. For contracts awarded under the 2015 Regulations, regulation 82 requires public bodies to keep copies of all contracts “at least for the duration of the contract” where the contract value is equal to or greater than £884,720 in the case of public supply contracts or public service contracts, and £8,847,200 in the case of public works contracts.

Good records management can help with preparing reports and responding to possible challenges or Freedom of Information requests. It is the responsibility of the Procurement Officer to ensure that key documents for each contract are filed promptly.