Scottish procurement: policy manual

Procurement roles, responsibilities and compliance

Delegated Purchasing Authority (DPA)

All procurement contracts must be awarded by an individual with the appropriate level of DPA.

DPA is an internal control whereby authority is granted to core Scottish Government staff to enter into a contract on behalf of Scottish Ministers. Procurement Officers and Delegated Purchasing Officers (DPOs) are responsible for conducting the process leading up to, and including, the award of a contract. SPPD is responsible for the scheme of DPA across the core Scottish Government directorates.

SPPD DPA can only be granted to individuals permanently employed by the Scottish Government and is authorised in writing by the Director of SPPD (or their nominated representative). However, where procurement is conducted on behalf of another public body on a Shared Service basis, DPA may be granted by that body itself, rather than SPPD. The decision to grant DPA is based on business need and the training / experience of the member of staff concerned. The DPA granted will specify the upper limit of contract value and type which the individual is authorised to award. DPA is personal to an individual only whilst they occupy their current position unless they are seconded to another post within the core Scottish Government to carry out their procurement role in that post. DPA does not automatically transfer to their successor should they leave their current post. If DPA is to be withdrawn by the Director of SPPD, this will be confirmed in writing. DPA should not be confused with financial / budgetary authority which is detailed in the Scottish Government Scheme of Delegation.

DPA is required for the following activities:

• conducting competitions where an existing contract / framework agreement does not already exist
• conducting mini-competitions or awarding a contract under a framework agreement (so long as the framework outlines that the relevant contracting authority can call off from it)
• determining the appropriate approach (in line with the framework’s buyer’s guide) to use when calling off from a framework agreement (e.g. mini competition, ranked)
• using Dynamic Purchasing Systems (DPS)
• modifying an existing contract, providing that the contract allows for modifications or that approval to modify a contract has been authorised by the relevant official
• acquiring goods, services or works via the creation of a new contract

DPA is not:

• required to order or to receive goods, services or works which the Scottish Government has already made a contractual commitment to buy
• required for purchases under £5,000 where the ePC is used

When undertaking direct purchases from single supplier frameworks, for anything other than routine and / or low value purchases, business areas must engage a DPO in the first instance, or Procurement Officer. If there is any doubt about this, discussions must be held with a DPO.

Purchases made using the electronic Purchasing Card (ePC) must comply with the ePC procedures.

Commitment of a contract

A contract is a legally binding agreement between at least two parties creating obligations enforceable by law. A procurement contract sets out the details of what is being procured, from whom, and the rights and obligations of the parties involved.

Legally binding contracts can be created by word of mouth, correspondence, or implied by the action of parties. Therefore, in discussions and correspondence with suppliers it is essential that staff take care to ensure that a commitment or contract is not unintentionally created.

All Scottish Government procurement contracts awarded should normally be subject to Scots Law. For goods and services contracts, this is reflected in the Scottish Government Terms and Conditions (both SGTCs and model terms). For contracts where other terms and conditions are used (e.g. works), these should also be subject to Scots Law where possible. Any proposed change, amendment or alternative form of conditions by any party to the contract, should in the first instance, be referred for approval to the point of contact within SPPD who has been engaged with for the contract. In the case of high risk or high value contracts, Scottish Government Legal Directorate (SGLD) advice should be sought before agreeing to non-standard contract conditions.

The Single Procurement Document

The SPD is a standard form that includes exclusion and selection questions. It is mandated for use in all Regulated Procurements above GPA threshold, and is recommended for use in all other Regulated Procurements. The aim of the SPD is to simplify the procurement process, especially for SMEs, by enabling bidders to self-declare that they have not breached any of the grounds for exclusion, and that they meet the relevant selection criteria. SPD Modules are available in Public Contracts Scotland (PCS) and PCS Tender (PCS-T). Guidance and documentation on the SPD can be found in the Procurement Journey.

When carrying out Regulated Procurements, you must take account of the mandatory and discretionary exclusion grounds which apply. These can be found in Annex B , selection of tenderers and award of contracts, of the statutory guidance and further guidance can be found in the Procurement Journey. In all cases a bidder will have an opportunity to provide evidence that it has taken remedial action to demonstrate its reliability (“self-cleansing”).

Notification of acceptance and rejection of bids

Acceptance or rejection of bids to suppliers must always be in writing. For procurements above GPA threshold where a Standstill Notice must be issued, the notice must be sent to all bidders as soon as possible once the preferred bidder has been identified, which commences a standstill period.

Should you wish, or be requested, to conduct a debrief meeting following issuing written notification of an unsuccessful bid then these must be carefully planned, reflect any information previously provided in any Standstill Notice or notification of unsuccessful bid, and only be conducted by experienced Procurement Officers. A record of the debriefing meeting must be securely stored.

For more information, please see the Procurement Journey contract award station.

Separation of duties

It is Scottish Government policy that there are at least two defined roles in a procurement process:

• the individual with the appropriate level of DPA who is responsible for ensuring that the procurement process fully complies with procurement policy and legislation
• the budget holder / customer who identifies the need and writes the business case to obtain any necessary approval to spend, confirming that funds are available to make the purchase

Anyone holding DPA must not:

• be responsible for any financial approvals connected with contracts that they have authority to approve
• act as Budget Centre Liaison Officer (BCLO) / Business Manager
• be a financial approver on the Scottish Government’s purchasing system

Proper separation of duties is essential in order to protect staff from accusations of impropriety and to reduce any risk of fraud.

Procurement Journey and the Client Guide to Construction Projects

The Procurement Journey provides step-by-step guidance and templates for the procurement of goods and services and should be referred to throughout the procurement process. It has three routes according to the estimated value of the contract:

• under £50,000 is known as unregulated or Route 1 procurement
• between £50,000 and up to the GPA threshold is a Regulated Procurement and sometimes referred to as Route 2 procurement
• equal to or above the GPA threshold is a Regulated Procurement and sometimes referred to as Route 3 procurement

The Client Guide provides specific guidance for construction projects including their procurement, and should be referred to throughout the procurement process for construction related contracts.

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 the commodity and service strategy, consideration should be given to any existing contracts and framework agreements which are appropriate for the procurement. The linked list is not exhaustive, and other frameworks may be available.

Caution must be exercised regarding the use of speculative frameworks. Some factors to be considered in this area can be found in SPPN 03/2017.

For purchases with a value under £1,000 (ex VAT) an ePC may be used. It is good practice for the cardholder to obtain a quote for purchases to ascertain value for money and to inform decisions. This quote can be made by telephone or in writing from the relevant supplier.

For all purchases with an anticipated value of between £1,000 and £5,000 (both figures excl. VAT), where there is no existing contract, an ePC may be used. For purchases valued within this range, it is recommended that buyers obtain a minimum of three written quotes from different suppliers. These quotes must be obtained before making a decision on the basis of VfM.

A Procurement Officer or DPO will usually use Quick Quote (an online competition process within PCS) for procurements with an anticipated value of between £5,001 and £49,999 (both figures ex VAT). However, a decision may be made to conduct an open competition for a procurement with an estimated value within this range. Quick Quote must only be used where an individual with the appropriate level of DPA:

• ensures that there is no existing contract / framework agreement awarded by or approved by SPPD which could be accessed
• satisfies themselves that using Quick Quote is a relevant and appropriate route to market
• ensures that the procurement / mini-competition is for low value and / or low risk purchases

All Regulated Procurements must be advertised on PCS, however, for transparency, it is best practice to publish a contract notice for all contracts regardless of value. The award of a contract or the conclusion of a framework agreement must also be published on PCS. Exemptions to these publication requirements apply in certain circumstances. For more information see regulation 33 and 51(6) of The Public Contracts (Scotland) Regulations 2015 and regulation 7(8) of The Procurement (Scotland) Regulations 2016.  For Research & Development services (e.g. procurements for innovative services) Pre-Commercial Procurement notices and Award notices should be published.

When determining advertising obligations, the calculation of the estimated value of the contract or framework (including potential options and/or possible extensions) should be conducted in accordance with the guidance outlined in Section 3 above. PCS has more information in the Buyers’ Area on how contracting authorities can meet their publication obligation. Please also see threshold and contract value estimation FAQs.

PCS can also be used to advertise subcontracting opportunities to promote a diverse and resilient supply chain, opening up opportunities for SME, Third Sector and Supported Businesses as appropriate. For more information please see SPPN 5/2019.

During Scottish election periods, procurement announcements or decisions might be affected by the restrictions that will be in place. Procurement Officers and DPOs should exercise caution when handling announcements and / or significant decisions during these times. Guidance will be published on Saltire outlining any restrictions during election periods, and Procurement Officers and DPOs must familiarise themselves with these. In cases of uncertainty or doubt, advice should be sought from your Line Manager or SPPD.

Non Competitive Action (NCA)

It is Scottish Government policy that goods, services, and works must be bought by genuine and effective competition unless there are exceptional reasons to the contrary.

Buying goods, services or works without competition needs prior approval before any purchase is made. Approval is granted in exceptional circumstances only, where it is appropriate to depart from Scottish Government policy, and where obligations under procurement legislation have been considered.

Non Competitive Action (NCA) is the Scottish Government’s internal 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

The decision on whether to authorise a NCA request is made on a case-by-case basis and is strictly limited to those situations where it is appropriate. It is worth noting that lack of planning, resources or effective project management (e.g. of scope, timelines, or risk) would be very unlikely to constitute sufficient grounds for approving a NCA request.

Situations where approval may be given include, but are not limited to:

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

A Procurement Officer or DPO must be consulted about any proposal to award a contract without competition or to modify a contract before using the application for NCA form.

• for new requirements with a value of under £10,000 (excluding VAT), NCA approval must be obtained in advance by Deputy Director level or above and forwarded to SPPD
• all requests to proceed with NCAs for new requirements of £10,000 and above must be approved in advance by SPPD
• NCAs to modify existing contracts, regardless of the value, where there is no clear unequivocal clause to do so within the existing contract, must be approved in advance by SPPD

Approval of a NCA request does not guarantee this will be free of challenge by another supplier (for higher value contracts this could include a challenge before the courts). For this reason, it is important robust, objective supporting evidence is provided as part of the request for NCA.

Please note the process involved in awarding a contract whether that be through a competitive procedure or as a result of a direct award (NCA) is very similar and so where a NCA has been approved, there is still a requirement to undertake many of the steps that would be otherwise required. These steps include carrying out the routine due diligence that should be undertaken in advance of entering into any contract on behalf of Scottish Ministers.

In all cases, the guiding principles are that NCA 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 NCA justification and approval must be formally recorded on eRDM along with robust supporting evidence.

Contract documentation

Documentation covering the key stages of all procurements must be retained on eRDM, regardless of value. The Procurement Officer or DPO is responsible for ensuring that there is a file on eRDM for each contract and for ensuring that key documents are filed promptly.

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.

Contracts register, transparency and data protection

The Procurement Reform (Scotland) Act 2014 requires all contracting authorities to keep and maintain a contract register, and to provide an internet-based, publicly viewable version of it. As a minimum, this is required to include all Regulated Procurements. PCS provides functionality to produce a contracts register that meets the requirements of the Act.

Procurement Officers and DPOs must ensure their contracts and procurement processes are compliant with the Data Protection Act 2018. This can be achieved through the use of the Scottish Government Terms and Conditions (SGTCs), and the privacy notice for inclusion with ITT documents. More information on this can be found in SPPN 2/2018.

Care should also be taken by Procurement Officers and DPOs with regards to Cyber Security. For further information, please see SPPN 2/2020.