Procurement strategy update

1. Introduction

This document updates the Scottish Government’s 2017-19 procurement strategy which was published in December 2016. We need to review our strategy each year and make changes to it where appropriate and this update is the outcome of that first review. It sets out how we plan to carry out our procurements for this financial year,
1 April 2018 to 31 March 2019 and beyond, providing some more focus on some of those policies that we aim to support through procurement. The broad principles and policies described in this update are expected to remain relevant until at least 31 March 2020 and so we are also extending the period covered by the strategy until then. We will however continue to review our strategy at least once a year and make changes to it if these are needed. 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;
• consulting and engaging with those affected by our procurements;
• the payment of 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; and
• paying our invoices (or similar claim) to contractors and subcontractors in 30 days or less.

These statements are in Part 2 of this procurement strategy 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 Commercial Directorate ( SPCD). There has been a substantial programme of activity across the public sector in Scotland to help improve public 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 engage with our stakeholders and clients early in projects to improve commercial outcomes. Our role within this landscape is changing from:

• leading process and procedure to one where we strive for even greater impact and influence;
• having a focus on contracting and compliance to also being a critical friend and trusted adviser;
• approving and endorsing to stimulating and challenging approaches; and
• central resourcing to flexible models made up of cross-functional teams.

Public procurement in Scotland has five main objectives: improving supplier access to public contracts; embedding sustainability; maximising efficiency and collaboration; developing people and capability and also delivering savings and wider benefits. This work is collaborative and is overseen by:

• The Public Procurement Group ( PPG) which makes sure that public procurement in Scotland stays on course to deliver benefits and that obstacles to this are removed or reduced.
• The Procurement Supply Group ( PSG) which provides an ongoing framework for discussion about, and influence on, public procurement practices as these affect suppliers, in particular, small and medium sized enterprises ( SMEs) ^[1] , the third sector ^[2] and supported businesses ^[3] and the trade unions. The PSG is consulted on key policy developments, live issues and priorities.
• The five Strategic Forums which are concerned with Best Practice; Collaboration; e-Commerce and Management Information; Policy; and Professional Practice and Development. These groups are responsible for delivering projects and activities that are aligned to public procurement in Scotland and they inform and influence the PPG.

More information about these groups and SPCD’s vision, mission and aims is available on our website.

SPCD also provides a range of commercial, property, programme management and project management services for the Scottish Government and the wider Scottish public sector.

eCommerce and best practice

We provide an eCommerce 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 systems 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 best practice tools to improve and enhance procurement capability. Our eCommerce solutions and 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 and the use of it by Scottish public bodies to advertise their regulated contract opportunities is now 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 online Procurement Journey provides a single source of procurement guidance and documentation for the Scottish public sector. The purpose of the Procurement Journey is to grow and improve procurement capability across the Scottish public sector by facilitating best practice, standardisation and compliance at all levels from simple purchases to complex procurement exercises. It also makes it easier for potential suppliers of all sizes to bid for public contracts. The Procurement Journey is kept up to date and reflects changes in legislation and policy.
• The Supplier Journey provides online guidance to suppliers interested in bidding for public goods and services. We are currently reviewing this guidance and the Supplier Journey will be re-launched in 2018 with updated format and content.
• The Procurement and Commercial Improvement Programme ( PCIP) can also be found within the Procurement Journey. The 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 learning and 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 has moved into phase two and we are now working to expand the scope of the programme to support continuous improvement.
• The Scottish Procurement Information Hub is a sophisticated spend analysis tool that 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. It reflects spend from key public bodies.
• Professional Electronic Commerce Online System ( PECOS) automates the purchase-to-pay ( P2P) 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 to procurement and finance guidelines.
• eInvoicing is delivered through PECOS and enables the receipt of electronic invoices from suppliers. These are then automatically passed to public bodies for matching and payment in finance systems.
• Catalogue Content Management ( CCM) is the national hub that manages catalogues that are made available as a result of national, sector or local contracts. CCM 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 European Single Procurement Document ( ESPD) (Scotland) replaced the standard Pre-Qualification Questionnaire in April 2016 and the use of it is now mandatory in Scotland. The introduction of the ESPD is intended by the European Commission to reduce the administrative burden on bidders and to remove some of the barriers to participation in public procurement 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.

We work continuously to develop the capability and skills of buyers and others involved in procurement and commercial activity. We do this through:

• The Procurement People of Today and Leaders of Tomorrow programme – which is underpinned by our national procurement competency framework, setting out procurement and commercial standards and facilitating continuous professional development and career paths.
• The Procurement People of Tomorrow programme – which focuses on encouraging, enabling and developing new entrants in our profession across Scotland.
• The Scottish Government Delegated Purchasing Officer Scheme – which ensures that those accountable for procurement within the Scottish Government have the necessary qualifications, training or experience for their level of delegated accountability.
• The emerging Commercial Capability Programme – which seeks to improve commercial outcomes through targeted training and earlier engagement of procurement with clients and commissioners.