The Scottish Government has been blazing a trail of reforms designed to put procurement at the heart of Scotland’s future economic growth. It is currently consulting on proposals to implement the three new EU public procurement Directives and the Procurement Reform (Scotland) Act 2014. The consultation runs until 30 April 2015.
Here we provide a summary of the key proposals. If all are adopted these reforms will significantly change the face of public procurement in Scotland, potentially leading to a single set of rules for above and below threshold procurement enforced and monitored by the Scottish Government, with a specialist tribunal for hearing procurement challenges.
- Taking social, environmental and employment issues into account – public bodies in Scotland will be required to take account of new legislation and statutory guidance on: (a) preparing annual procurement strategies; (b) complying with the new ‘sustainable procurement duty’ in the 2014 Act; (c) requiring Community Benefits obligations in contracts; (d) requiring contractors to comply with environmental, employment and social laws as a condition of contract; (e) reserving contracts to supported businesses in Scotland whose aim is to socially and professionally integrate disabled or disadvantaged people; (f) reserving certain services contracts to social enterprises (though the Scottish Government is less keen on the UK Government’s support for ‘mutuals’); (g) requirements for the use of eco-labels and technical specifications including how goods or services are manufactured; and (h) perhaps most significantly, requiring that all procurement be based on a balance MEAT assessment and not on price or cost alone (this latter requirement would be applied equally to utilities).
- Making contracts more accessible for smaller businesses – this includes requiring public bodies in Scotland to justify not splitting larger contracts into Lots (in order to be more attractive to SMEs). This would not apply to utilities.
- Selection criteria and grounds for exclusion – public bodies in Scotland will not be able to set minimum turnover levels more than two times the value of the contract. This will apply also to utilities procurement and to below threshold public procurement under the 2014 Act. Mandatory exclusion grounds and discretionary exclusion grounds (including tax evasion and insolvency) will apply equally to below threshold public procurement (and to public sector utilities). Their application will be subject to presumptions to be set out in statutory guidance and to new rules on self-cleaning. Convictions will be considered spent after a maximum of five years and three years in most other cases.
- Contracts for care, support and other specific services – implementing the new ‘light touch regime’ for specified types of care and support services, requiring advertising for contracts with a value in excess of €750k (around £590k), with statutory guidance to be published on the carrying out of procurement for health and social care contracts. Public bodies will be required to conduct all procurement of these services on the basis of a MEAT assessment, and not on price or cost alone.
- Procedural rules – all public bodies in Scotland except central government and the NHS will be able to use Prior Information Notices (PINs) to advertise contract opportunities (both for above threshold and below threshold contracts). The grounds for single tender actions will be similar for above and below threshold contracts; time-limits for tender returns are reduced and are more flexible; and when using the open procedure public bodies may wait and apply the qualification criteria only to the highest scoring bid. The rules on modifying contracts (and when a fresh EU tender process must be conducted) will not be applied to below threshold contracts.
- Rules about communication – consideration is being given by the Scottish Government as to whether to require use of Building Information electronic Modelling (BIM) or other electronic tools for public works contracts and design contests. Mandatory electronic communications for all public procurement will be delayed for the maximum period possible, until 18 October 2018. Contract award notices for all call-off contracts worth at least £50k for goods or services and at least £2 million for works awarded under framework agreements should be published on Public Contracts Scotland (and this should be applied equally to all utilities). The rules on dynamic purchasing systems should be applied equally to below threshold procurement.
- Central purchasing bodies – whilst the new Public Sector and Utilities Directives include new provisions on the use of central purchasing bodies the Scottish Government does not propose limiting the use of them.
- Enforcement and monitoring – the Scottish Government proposes to set up a formal monitoring and enforcement body for Scotland, acting through the existing Single Point of Enquiry (SPoE). More radically, and not a requirement of the new Directives, the Scottish Government is consulting on establishing an independent administrative body with statutory powers to hear cases. It is however favouring the creation of a specialist tribunal within the Scottish tribunals system. Its decisions would be binding and potentially quicker and less expensive than the court process. Proposals in relation to applications to the court and the review body are also covered by the consultation.
- Open contracting – Finally, the consultation seeks views generally on the principles of open contracting.
Responses to the consultation are required by 30 April 2015. Responses to the consultation received will be considered in the drafting of the new Scottish procurement regulations. The Scottish Government plans to implement the new procurement regulations by the end of 2015 (before the date on which the new Directives require to be implemented on 18 April 2016).