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Procurement Reform (Scotland) Act 2014

Type Act of the Scottish Parliament

Publication 2014-06-17

State In force

Jurisdiction Scotland

Department Statute Law Database

Source legislation.gov.uk

Reform history JSON API

Part 1 — Key concepts and application

Contracting authorities

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(1) For the purposes of this Act, a “contracting authority” is—

(a) a body, office-holder or other person listed in schedule 1, or

(b) any other person who is a contracting authority for the purposes of the Public Contracts Regulations and whose functions—

(i) are exercisable in or as regards Scotland, and

(ii) do not relate to reserved matters within the meaning of the Scotland Act 1998 (c.46).

(2) The Scottish Ministers may by order modify the meaning of “contracting authority” for the purposes of this Act.

(3) An order under subsection (2) may amend subsection (1) and schedule 1.

Regulated procurements

2

For the purposes of this Act, a “regulated procurement” is—

(a) any procedure carried out by a contracting authority in relation to the award of a proposed regulated contract including, in particular—

(i) the seeking of offers in relation to the contract, and

(ii) the selection of economic operators,

(b) the award of a regulated contract by a contracting authority.

Regulated contracts

3

(1) A contract is regulated if—

(a) it is a public contract,

(b) the estimated value of the contract (see section 5) is equal to or greater than the contract threshold, and

(2) For the purposes of this Act, the contract threshold is as follows—

Type of contract	Threshold
Public contract (other than a public works contract)	£50,000
Public works contract	£2,000,000

(3) The Scottish Ministers may by order amend the table in subsection (2) so as to substitute for the figures specified there for the time being such other figures as they consider appropriate.

Excluded contracts

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(1) A contract is an excluded contract for the purposes of section 3 if—

(a) it is a contract of a kind to which Public Contracts Regulations do not apply by virtue of regulation 4 or 7 to 18 of those regulations,

(b) the following conditions apply—

(i) it is for the purpose of acquiring goods, works or services in order to sell, hire or provide them to other persons,

(ii) the contracting authority will not have an exclusive right to sell, hire or provide the goods, works or services, and

(iii) the conditions on which the contracting authority intends to sell, hire or provide them are the same as or similar to the conditions on which another person could sell, hire or provide the same or similar goods, works or services, or

(c) the principal purpose of the contract is to acquire goods, works or services in connection with research or development undertaken by the contracting authority.

(2) The Scottish Ministers may by regulations amend subsection (1) so as to modify the kinds of contracts which are or are not excluded contracts.

Estimated value of contract

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(1) For the purposes of this Act, the estimated value of a contract is the value of the total consideration (not including value added tax) which the contracting authority expects to be payable under or by virtue of the contract.

(2) The Scottish Ministers may by regulations make further provision about how the estimated value of a contract is to be determined.

Framework agreements and dynamic purchasing systems

Framework agreements and call-off contracts

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(1) For the purposes of this Act—

(a) a framework agreement is an agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing public contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged,

(b) a call-off contract is a contract awarded under a framework agreement.

(2) This Act applies to framework agreements and call-off contracts as follows—

(a) a framework agreement is treated as a public contract for the purposes of section 3 (and references to “contract” elsewhere in this Act are to be construed accordingly),

(b) the following provisions do not apply to a regulated procurement in so far as it relates to a call-off contract—

(i) section 8(2),

(ii) section 11,

(iii) section 23(1),

(iv) section 27.

Dynamic purchasing systems

7

(1) The Scottish Ministers may by regulations make provision about dynamic purchasing systems including, in particular, provision—

(a) applying this Act to the establishment and operation of a dynamic purchasing system as it applies to the carrying out of a regulated procurement with such modifications as the regulations may specify,

(b) modifying the application of this Act to a contract awarded under a dynamic purchasing system.

(2) For the purposes of subsection (1), a dynamic purchasing system is an electronic system—

(a) established by a contracting authority to purchase goods, services or works which are—

(i) commonly used by the authority, and

(ii) readily available on the market, and

(b) which is open to any economic operator who satisfies selection criteria specified by the contracting authority.

Part 2 — General duties and procurement strategies

General duties

8

(1) A contracting authority must, in carrying out a regulated procurement—

(a) treat relevant economic operators equally and without discrimination,

(b) act in a transparent and proportionate manner.

(2) A contracting authority must also comply with the sustainable procurement duty.

(3) However, a contracting authority must not do anything in pursuance of subsection (2) that would conflict with its duty under subsection (1).

(4) A relevant economic operator is an economic operator who is a national of, or is established in, the United Kingdom or Gibraltar.

(5) Subsection (1) does not apply in relation to a higher value regulated procurement.

Sustainable procurement duty

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(1) For the purposes of this Act, the sustainable procurement duty is the duty of a contracting authority—

(a) before carrying out a regulated procurement, to consider how in conducting the procurement process it can—

(i) improve the economic, social, and environmental wellbeing of the authority's area,

(ii) facilitate the involvement of small and medium enterprises, third sector bodies and supported businesses in the process, and

(iii) promote innovation, and

(b) in carrying out the procurement, to act with a view to securing such improvements identified as a result of paragraph (a)(i).

(2) The contracting authority must consider under subsection (1) only matters that are relevant to what is proposed to be procured and, in doing so, consider the extent to which it is proportionate in all the circumstances to take those matters into account.

(3) In this section—

“small and medium enterprises” means businesses with not more than 250 employees,

“third sector bodies” means organisations (other than bodies established under an enactment) that exist wholly or mainly to provide benefits for society or the environment.

(4) In this section, references to the wellbeing of the authority's area include, in particular, reducing inequality in the area.

Guidance on sustainable procurement duty

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(1) The Scottish Ministers may publish guidance on the sustainable procurement duty.

(2) Contracting authorities must have regard to any guidance published under this section.

(3) The Scottish Ministers must lay a copy of any guidance published under this section before the Scottish Parliament.

Supported businesses

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(1) Despite section 8, a contracting authority may restrict participation in a regulated procurement (other than a higher value regulated procurement) to supported businesses only.

(2) Where a contracting authority restricts participation under subsection (1), it must state that fact in the contract notice.

(3) For the purposes of this Act, a “supported business” is an economic operator who operates a supported business, or supported employment programme within the meaning of regulation 21 of the Public Contracts Regulations.

Contracts for health or social care services

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(1) Despite section 8, a contracting authority may award a contract for a health or social care service without seeking offers in relation to the proposed contract.

(2) In relation to a regulated procurement where, by virtue of subsection (1), a contracting authority does not seek offers, section 23(1) does not apply.

(3) The Scottish Ministers may by regulations make provision specifying what is a health or social care service for the purposes of subsection (1) and section 13(1).

Guidance on procurements for health or social care services

13

(1) The Scottish Ministers must publish guidance on the carrying out of regulated procurements relating to contracts for health or social care services.

(2) Contracting authorities must have regard to any guidance published under this section.

(3) The Scottish Ministers must lay a copy of any guidance published under this section before the Scottish Parliament.

Other circumstances in which contract can be awarded without competition

14

(1) The Scottish Ministers may by regulations specify circumstances in which a contracting authority may, despite section 8, award a regulated contract without seeking offers in relation to the proposed contract.

(2) In relation to a regulated procurement where, by virtue of regulations made under subsection (1), a contracting authority does not seek offers, section 23(1) does not apply.

Procurement strategy and annual report

Procurement strategy

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(1) A contracting authority which expects to have significant procurement expenditure in the next financial year must, before the start of that year—

(a) prepare a procurement strategy setting out how the authority intends to carry out regulated procurements, or

(b) review its procurement strategy for the current financial year and make such revisions to it as the authority considers appropriate.

(2) Subsection (3) applies where a contracting authority—

(a) has not, in relation to a financial year, prepared or reviewed a strategy under subsection (1), and

(b) becomes aware of the likelihood of having significant procurement expenditure during that year.

(3) The contracting authority must, as soon as practicable after it becomes aware of the likelihood of having significant procurement expenditure—

(a) prepare a procurement strategy setting out how the authority intends to carry out regulated procurements, or

(b) review its most recent procurement strategy and make such revisions to it as the authority considers appropriate.

(4) An authority has significant procurement expenditure in a year if the sum of the estimated values of the contracts to which its regulated procurements in that year relate is equal to or greater than £5,000,000.

(5) The procurement strategy must, in particular—

(a) set out how the authority intends to ensure that its regulated procurements will—

(i) contribute to the carrying out of its functions and the achievement of its purposes,

(ii) deliver value for money, and

(iii) be carried out in compliance with its duties under section 8,

(b) include a statement of the authority's general policy on—

(i) the use of community benefit requirements,

(ii) consulting and engaging with those affected by its procurements,

(iii) the payment of a living wage to persons involved in producing, providing or constructing the subject matter of regulated procurements,

(iv) promoting compliance by contractors and sub-contractors with the Health and Safety at Work etc. Act 1974 (c.37) and any provision made under that Act, and

(v) the procurement of fairly and ethically traded goods and services,

(c) include a statement of the authority's general policy on how it intends its approach to regulated procurements involving the provision of food to—

(i) improve the health, wellbeing and education of communities in the authority's area, and

(ii) promote the highest standards of animal welfare,

(d) set out how the authority intends to ensure that, so far as reasonably practicable, the following payments are made no later than 30 days after the invoice (or similar claim) relating to the payment is presented—

(i) payments due by the authority to a contractor,

(ii) payments due by a contractor to a sub-contractor,

(iii) payments due by a sub-contractor to a sub-contractor,

(e) address such other matters as the Scottish Ministers may by order specify.

(6) The Scottish Ministers may by order modify subsection (4) so as to substitute for the figure specified there for the time being such other figure as they consider appropriate.

(7) In subsection (5)(b)(iii), a “living wage” means remuneration which is sufficient to ensure an acceptable standard of living.

Joint strategies

16

A group of two or more contracting authorities may have a joint procurement strategy for both or, as the case may be, all of the authorities in the group.

Compliance with strategy

17

A contracting authority which is required to prepare or review a procurement strategy in relation to a financial year must ensure that its regulated procurements in that year are, so far as reasonably practicable, carried out in accordance with its strategy.

Annual procurement reports

18

(1) A contracting authority which is required to prepare or revise a procurement strategy in relation to a financial year must prepare an annual procurement report on its regulated procurement activities as soon as reasonably practicable after the end of that financial year.

(2) The report must include—

(a) a summary of the regulated procurements that have been completed during the year covered by the report,

(b) a review of whether those procurements complied with the authority's procurement strategy,

(c) to the extent that any regulated procurements did not comply, a statement of how the authority intends to ensure that future regulated procurements do comply,

(d) a summary of any community benefit requirements imposed as part of a regulated procurement that were fulfilled during the year covered by the report,

(e) a summary of any steps taken to facilitate the involvement of supported businesses in regulated procurements during the year covered by the report,

(f) a summary of the regulated procurements the authority expects to commence in the next two financial years,

(g) such other information as the Scottish Ministers may by order specify.

(3) For the purposes of subsection (2)(a), a regulated procurement is completed when the award notice is published or when it otherwise comes to an end.

Publication etc.

19

(1) A contracting authority must publish—

(a) the procurement strategy prepared under section 15,

(b) any revised strategy prepared under that section,

(2) Publication is to be in such manner as the authority considers appropriate but must include publication on the internet.

(3) On publishing a document under subsection (1), the authority must notify the Scottish Ministers.

Guidance

20

(1) The Scottish Ministers must publish guidance on the preparation and publication of procurement strategies and annual procurement reports.

(2) The guidance may, in particular, cover—

(a) consultation to be undertaken in relation to the preparation of a strategy,

(b) the form and content of strategies and reports,

(3) The guidance may include a model procurement strategy and model annual report.

(4) Contracting authorities must have regard to any guidance published under this section.

(5) The Scottish Ministers must lay a copy of any guidance published under this section before the Scottish Parliament.

Annual report on procurement activity in Scotland

21

(1) As soon as reasonably practicable after the end of each financial year, the Scottish Ministers must prepare a report, based on information contained in annual procurement reports published under section 19(1) during that year, on procurement activity in Scotland.

(2) The report must include information about—

(a) regulated procurements that have been completed,

(b) community benefit requirements that contracting authorities consider were fulfilled,

(3) The report may also contain such other information as the Scottish Ministers consider appropriate.

(4) The Scottish Ministers must—

(a) publish the report in such manner as they consider appropriate,

(b) lay a copy of the report before the Scottish Parliament.

Part 3 — Specific duties

Publication of notices on Public Contracts website

Public Contracts website

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Reading this document does not replace reading the official text published on legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. We assume no responsibility for any inaccuracies arising from the conversion of the original CLML XML to this format.