On the 4th October 2013 the Scottish Government published its Procurement Reform (Scotland) Bill. The Government’s objectives for the Bill are well known; it is seeking to increase transparency around the procurement procedure and the award of public contracts, and to encourage greater involvement and improved access to these contracts for SMEs.
This article will examine the impact that the Bill will have on the private sector. A separate article on what the Bill means for the public sector can be found here.
Increased opportunities for the private sector?
Whilst the Bill is directed at, and places obligations on, public sector authorities; inevitably it will have a huge impact on private firms seeking involvement in these contracts. In general, the Bill will apply to Contracts with a lower threshold than the Public Contracts (Scotland) Regulations 2012 (the “2012 Regulations”); these thresholds are set at £50,000 for a Public Contract and £2,000,000 for Public Works Contracts. This means that there will be more publicly tendered contracts than previously, at a lower level. If you are an SME, this may open up the market for you providing access to opportunities that may not previously have been publicly tendered. There is also a specific provision in the Bill requiring authorities to seek to facilitate the involvement of SMEs, third sector bodies and supported businesses in the process.
The PQQ process
One of the main criticisms levelled at the public procurement process in recent years is the expense involved for firms taking part in the bidding process in order to put together a tender – money which is often viewed as wasted if that bid is not successful. With the PQQ process which precedes the bidding process in many tender procedures, time and expense is invested before even reaching a shortlist. In an attempt to combat this, the Bill has included provisions to prevent authorities from levying charges for participation in the process. However, with competition for these contracts increasingly fierce, arguably this will do little to reduce the amount the private sector invests in bids voluntarily. A more beneficial and realistic approach may have been to consider simplifying the process, or reducing the number of shortlisted firms, something the anticipated new EU Procurement Directive will potentially tackle.
Greater access to information
A key objective of the Bill is to strengthen the rights of firms to access information relating to the award of public contracts, reflecting the wider aim of procurement reform to increase transparency around the award of public contracts, and ensure that decisions are open to review. You will be able to access the Procurement Strategy and Annual Procurement Reports for contracting authorities with a procurement spend of greater than £5 Million in a given financial year and this will enable the private sector to gauge the market and focus its resources on the most appropriate projects.
In terms of the processes themselves the Bill also includes provision of mandatory debrief information; which, where you are not successful, will provide you with the information you need to learn from the process and develop bids for the future.
Public Contracts Scotland
The Bill also clearly endorses Public Contracts Scotland. Whilst the website has been in existence for some time, the new legislation will make it compulsory for all contract notices and awards to be published there, effectively creating a ‘one-stop shop’ where you can find all advertised contracts. With all information readily available to all potential participants on one platform this may also assist in ensuring a fair and open procedure.
Whilst the Procurement Reform Bill does introduce some changes into the area of public procurement; the new Bill must be read in conjunction with the Public Contracts (Scotland) Regulations 2012 to give the full picture of procurement rules in Scotland. Whilst the Bill has been said to occupy the space that the EU regime does not, new EU legislation is expected in the near future, and has the potential to introduce further changes. This is an area of law set to develop and progress, and both the public and private sector need to be alive to the obligations and opportunities presented to them.