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Changes to Scotland’s Public Procurement Legislation - frequently asked questions (FAQS)

Please see below the frequently asked questions, which have emerged from the seminars which were provided for public sector purchasers. These FAQs are not exhaustive, it is a reflection of the most common questions raised during the seminars.

The scope of the answers given is in the context of the following legislation:

This should not be construed as legal advice or a substitute for such advice, which you should obtain from your own legal advisers.

Question Topics
Community Benefits
1.  Are public bodies required to meet the community benefit requirements in call-off contracts from framework agreements if the framework agreement does not include community benefits?

The new community benefit requirement introduced by the Act, applies to contracts, including framework agreements and call-off contracts, which commence on or after 1 June 2016, which are estimated to be valued at £4 million or over.

Scottish public bodies continue to be able to use framework agreements which were commenced prior to 1 June, including for example UK Government frameworks.  Where the estimated value of the call-off contract is valued at £4 million or over, including where the framework agreement does not include community benefit requirement, a public body must comply with their obligation in the Act and the supporting statutory guidance, i.e., to consider whether to impose community benefit requirements.  A public body must consider how to best meet this obligation and also ensure compliance with the terms of the framework when considering whether to impose community benefit requirements.

Whilst there is no obligation under the Act for public bodies to consider applying Community Benefit requirements in contracts where the value is less than £4 million, in line with policy and best practice, public bodies are urged to consider the application of community benefit clauses in all contracts irrespective of value.

Lotting of Contracts
2. Public Contracts Scotland (PCS) does not currently allow for separate ‘lots’ to be tracked through the system (beyond contract notice), is this being addressed?

PCS will continue to allow contracts to be split into ‘lots’ including the ability to show the separate award of these contracts in the contract award notice.

3. Where should a public body set out their reasons for not splitting a contract into ‘lots’?

Public bodies must indicate the main reasons for their decision not to ‘lot’ a contract in the procurement documents (see Q6 & Q7 Procurement documentation below) or in the written report, which is required for each contract or framework agreement, see regulation 47(2) for more details.

As a matter of best practice the main reasons for not lotting a contract should be set out in the contract notice, this can be included in Section II: Object, where details are provided on the ‘Description of the procurement’ (II.2.4).

Procurement Procedures
4. Innovation Partnership: In the case of a supplier developing software, how should we handle Intellectual Property Rights (IPR) issues?

Innovation Partnerships should only be used where a solution is not readily available on the market. IPR is especially important when software has been developed or amended to specifically meet individual requirements. Ownership of the IPR should be clearly identified during the procurement process and it is important to obtain legal advice relevant to IPR at the pre-procurement stage, as maintaining appropriate rights will be a key concern within an Innovation Partnership. 

5. Can we negotiate on price in the Competitive Procedure with Negotiation?

The procurement documents must, as well as setting out the subject matter of the contract, define the minimum requirements to be met by all tenders and the award criteria, these minimum requirements and the award criteria must not be subject to negotiation (regulation 30)(15).

Negotiations in a Competitive Procedure with Negotiation may concern all characteristics of the purchased works, supplies and services including, for instance, quality, quantities, commercial clauses as well as social, environmental and innovative aspects, in so far as they do not constitute minimum requirements. This list (which is provided in the recitals to the 2014 Public Contract Directive) does not specifically include price but equally it does not rule it out and it may be considered to form part of the commercial clauses. 

If a public body wished to negotiate on price (or any other relevant aspect of the requirement), the negotiations must: ensure the equal treatment of all tenderers; ensure information is not provided in a discriminatory manner which may give some tenderers an advantage; keep all tenderers informed of any changes and where changes are made, provide sufficient time for all tenderers to make modification and resubmit tenders as appropriate.

Procurement Documentation
6. What is meant by ‘procurement documentation’, and if all documentation has to be ready ‘upfront’ what goes into the Invitation to Tender (ITT)?

In respect of all procurement process, the 2015 Regs require public bodies to offer on the internet unrestricted and full direct access free of charge to the “procurement documents” from the commencement of a procurement. The procurement documents should allow all interested suppliers to decide whether or not they should participate in the procurement procedure, and if they decide to do this, the documentation should contain all of the information that is required for them to participate in the procurement procedure.

It is important to understand the intention of the Regulations and what procurement documentation must be made available on the internet and when.

By way of example, in the case of the competitive dialogue, this procedure requires an invitation to submit a final tender (ISFT).  That is determined by the solution identified in the course of the dialogue. The ISFT is a procurement document but not one that could ever be made available electronically at the time the contract notice is first published as it could not exist then.

The intention of the 2015 Regulations, more logically appears to be that procurement documents must be made available on the internet from the time at which they are sent to participants in the process. This also makes sense when read alongside the procedures themselves having regard to time periods. 

In restricted procedures, for example, the minimum time limit for the receipt of tenders is 30 days from the date on which the invitation to tender is sent.  If the ITT had already been published in electronic form at the same time as publishing the contract notice why would it be necessary for it to be sent at all or would the invitation take a different form from current practice?

This would therefore suggest that the intention is more likely that starting from the date of publication of the contract notice, the procurement documents are made available in electronic form / on the internet at the same time as they are otherwise made ready to issue to participants.

An ITT will be necessary in restricted procedures, competitive dialogue procedures, innovation partnerships and competitive procedures with negotiation.  So only where public bodies are using the open procedure would they be required to publish their ITT at the point that a procurement is commenced.

7. What is the use of a Prior Information Notice (PIN) if all documentation effectively needs to be made available electronically at the outset?

The new Regulations provide for a PIN to have two uses.  A PIN can be used by sub-central public bodies as a call for competition in restricted procedures or the competitive procedure with negotiation.

A PIN can also still be useful for all types of contracting authority which engage in early market engagement and, for example to notify the market of a future contract or to reduce the minimum timescales in certain procurement procedures.

A contracting authority or utility which wishes to award a concession contract for a social or other specific service listed in Schedule 3 to the Concession Contracts (Scotland) Regulations 2016 must publish a PIN.

Contract Notice
8. How will the publication of contract notices on Public Contracts Scotland (PCS) and PCS-Tender be co-ordinated with their publication on OJEU? 

PCS will continue to ensure that notices prepared on the system are sent to the Official Journal of the European Union (OJEU).

For those contracts which require the publication of a contract opportunity notice at OJEU level, the publication of PINs, Contract Notices and Contract Award Notices at national level is prohibited prior to their publication in the OJEU.  The OJEU publications office will normally provide the PCS system confirmation of receipt of the notice and a separate receipt of publication of the information sent indicating the date of that publication.

Following the acknowledgement of publication at European level, PCS will then automatically publish the notice. However where confirmation of receipt of the notice has been received but not confirmation of publication, PCS may publish the information at national level once 48 hours have elapsed from the confirmation of the receipt of the notice.

Notices compiled on PCS and submitted by 4:30pm are sent to OJEU that same day, however anything after 4:30pm will be submitted to OJEU the next working day, this will be important to take into account when calculating a time period for a procurement process and in particular when determining the closing date for expressions of interest.

9. If you published a PIN prior to 18 April, which set of Regulations apply?

The 2015 Regulations apply to procurement exercises which commence on or after 18 April 2016.  A PIN published prior to this date does not signal the commencement of a procurement process.  A procurement commences at the point that a contract notice is published or where a PIN that is being used as a call for completion is published (a new provision which is only available to sub-central public bodies and only since 18 April 2016).

European Single Procurement Document (ESPD) – Exclusion and selction of tenderers 
10. Is there a requirement to use the ESPD in lower value contracts, i.e. below the EU threshold contract values?

The statutory guidance states that the ESPD should also be used for regulated procurements below the EU contract threshold values.

11. How can we use the ESPD to check that suppliers are supported businesses?

In Part II of the ESPD, there is a specific question asking suppliers whether they are a supported business, or if they will provide for the performance of the contract in the context of supported employment programmes.

12. Are we able to add questions to the ESPD, e.g. for health and safety requirements?

No, additional questions cannot be added to the ESPD.  A public body can specify minimum requirements in respect of health and safety standards in the Contract Notice, for suppliers to respond to when completing Part IV: Selection Criteria, Section D Quality assurance schemes and environmental management standards, of the ESPD.

Guidance has been published and is available on the Procurement Journey.

13. Will the responses to ESPD be stored?

No, if using the PCS post-box to receive tenders the responses will continue to be stored locally, along with all other procurement documents, for the specific public body’s use.

However, if using PCS-Tender supplier responses to the standard ESPD questions will be saved in the Supplier profile where they can be reused in subsequent tenders.

14. Do you have to state at the start of the process that you will be asking for evidence and /or certificates before bidders are shortlisted / awarded the contract?

Regulation 60(9) requires a public body to ask the tenderer to which it has decided to award the contract, to submit up-to-date certificates/evidence, before awarding the contract.

Public bodies may seek documents at an earlier stage where this is necessary to safeguard the procurement process, for example where there is a risk to the effective conduct of the procurement process, or in a two-stage process, at the moment of selection of tenderers.

There is no express requirement to set out an intention to ask for certificates and/or evidence before the contract is to be awarded, however if it is considered necessary to seek supporting documentation at an early stage in the procurement process, details of this requirement should be clearly stated in the Contract Notice.

15. When using the ESPD, are we able to score any of the questions on experience as part of the selection criteria, for example when considering the technical capacity of the bidders?

The technical and professional ability section of the ESPD (Part IV, section C) provides flexibility to apply a weighting and scoring mechanism to in order to shortlist bidders.  It is important to set out clear statements which determine the selection criteria and specify any minimum requirements including the scoring mechanism in the Contact Notice.

Guidance has been published and is available on the Procurement Journey.

16. Can we ask the main construction contractor to require all their sub-contractors to complete an ESPD?

Where a main contractor is relying upon the capacity of others (including sub-contractors) to meet the selection criteria in relation to economic and financial standing and technical and professional ability, a separate ESPD for each entity on which it relies, must be submitted alongside its own.

In addition, under regulation 71 a public body may ask for ESPDs to be submitted by sub-contractors for the purpose of determining whether any of the sub-contractors meet any of the exclusion grounds (regulation 58).

17. Should the ESPD be used in the light touch regime, i.e. contracts for social and other specific services?

The mandatory exclusion grounds must be applied to light touch regime procurement processes, other criteria may be applied according to the decision taken by the public body when determining the scope of the particular procurement.

There is nothing in the Regulations to prevent the use of ESPD in the light touch regime.  A public body can choose to use the ESPD in respect of exclusion grounds and selection criteria for these contracts, and it is a matter of best practice to do so.

18. Can you use the ESPD in the open procedure?

The ESPD must be used in all procedures or OJEU threshold value contracts except the negotiated procedure without prior publication.

19. How should we treat economic operators from out with Scotland in terms of the blacklisting questions in the ESPD?

Blacklisting questions are contained in part 3C of the ESPD where it asks if the bidder has committed an act prohibited under the Employment Relations Act 1999 (Blacklists) Regulations 2010.  This section is still relevant for economic operators from out with the UK as they might have been involved in blacklisting in the UK.

Award Criteria
20. How and when will buyers make use of the new requirement to ensure that suppliers comply with environmental, social and employment law, etc?

Public bodies must now (see regulation 19(4) of the 2015 Regs) include certain conditions in their contract terms to ensure that suppliers comply with environmental, social and employment law.

As part of the public consultations we asked if a standard clause should be introduced across all public contracts in Scotland.  In line with responses to this consultation, the flexibility is given to public bodies to determine on a case by case basis how to meet this requirement taking account of the individual circumstances of each contact.

A Scottish Procurement Policy Note was published on 2 June 2016, providing public bodies with guidance on the measures relating to social, environmental and labour law and providing provisions to consider adopting in relevant contracts.

21. How do we handle e-auctions now that public contracts cannot be awarded on the basis of lowest price / cost alone?

Quality criteria still apply in respect of e-auctions, which are one part of a compliant public procurement procedure.  Normally tenders (including the quality criteria) will be evaluated prior to the e-auction being carried out.

As is the case under the 2012 Regulations, the e-auction will then be used to determine the price/cost element of the tender. These two parts should then be brought together to determine the most economically advantageous tender.  It should be noted that e-auctions are not appropriate for health or social care contracts.

22. Can we use price or cost only to establish call-off contracts from framework agreements which commenced on or after 18 April 2016?

In line with regulation 67, the Best Price Quality Ratio (BPQR) must be applied when establishing framework agreements, i.e. by establishing quality and price or cost criterion.  More specifically, regulation 34(10) of the 2015 Regs requires that call-offs/mini competitions are based on the same or (where necessary) more precisely formulated terms as were applied for the award of the framework agreement, or where appropriate other terms referred to in the procurement documents for the framework agreement.

Therefore given that framework agreements cannot be established on the basis of price or cost only, and subsequent call-off contracts must be based on the same terms, there would be no circumstances where a call-off would be awarded solely on the basis of price or cost only.

Call-off contracts from a framework agreement which was established prior to 18 April 2016 can be established on the basis of price only, where this approach is governed by the rules of that framework.

23. If we are using fixed rates (e.g. for professional fees), can we evaluate only on quality?

For contracts caught by the 2015 Regs, the contract award criteria must be based on the BPQR and therefore contain an element of price or cost as well as other criteria such as quality.

Regulation 67(5) of the PC(S)R 2015 states that “the cost element may also take the form of a fixed price or cost on the basis of which economic operators will compete on quality criteria only”.  So where the contract terms are on the basis of a fixed rate, tenders can be evaluated on quality only.

Giving of reasons or Supplier Debrief
24. Do we have to give information to the successful tenderer on how they could have done even better?

Yes, whenever the successful tenderer submits a written request and where the contract was within scope of the 2015 Regs, such information must be given within 15 days of the date that such a request is received. For contracts below OJEU value but above the Act thresholds, the period within which such information must be provided to the successful tenderer is 30 days.

25. Have the new procurement rules introduced any changes to the standstill requirements for call-offs contracts from framework agreements?

There is no requirement to recognise a standstill period for EU-regulated call-off contracts, but a public body could choose to include a voluntary standstill.

The Act does not introduce any standstill provision for lower value contracts, including call-off contracts.

Contract Award Notice
26. Do I need to publish a contract award notice for call-off contracts (or purchase orders) which individually are less than the threshold value of a regulated procurement (£50,000 goods/services and £2 million works), but their aggregate value is greater?

This is a question of interpretation of the Act.  The requirement to publish contract award notices on Public Contracts Scotland supports the principles of transparency and openness and applies to regulated procurements (£50,000 goods / services and £2 million works), which commence on or after 18 April 2016.

It is much more difficult to determine what should happen in the case, for example, of a single supplier framework for low value supplies where there are a high volume of low value call-offs which cumulatively would exceed the threshold.

A literal reading of the legislation is to support greater transparency, and would suggest that for every call-off there should be an award notice published, that however would be impractical in such a case. 

If any single order was itself above threshold then clearly an award notice must be published but otherwise it seems reasonable to suggest that a notice should only be published for the first call-off that would be considered likely, when cumulated with subsequent orders, to exceed the threshold.  Consideration could also be given to annual publication of award notices in the case of high volume low value call-offs covering the aggregate value over the period.  If a public body chose to adopt such an approach, some consideration would need to be given as to how to avoid double counting if a subsequent order was itself above threshold and subject to a notice but the estimated value had already been covered by an earlier notice.

This position also applies to what contact award information should be included in a public body’s contracts register.

27. Is there a requirement to publish a contract award notice for a call-off contract awarded after 18 April 2016, but in respect of a framework agreement established before 18 April 2016?

Yes, if the value of the call-off is equal to or above threshold value of a regulated procurement (£50,000 goods / services and £2 million works), a contract award notice must be published and details included in the public bodies contracts register.

Contract Modification
28. Could I use the contract modification provisions to modify or extend an existing contract (for another 3, 6, 12 months)?

It is not possible to provide a general answer, as every potential contract extension / modification must be determined on the specific circumstances of the contract in question.  The basis on which a contract can be modified is detailed in regulation 72 of the 2015 Regulations.

It should be noted that the modification of contract provisions introduced by the 2015 Regs also apply to contracts awarded prior to 18 April 2016.

Contract Management
29. How will the electronic contract management system in PCS-T help us handle the new reporting requirements for the written reports?

Public bodies are required to draw up a written report (see regulation 83 of the 2015 Regs) for every contract or framework agreement awarded and every time a dynamic purchasing system is created.

Public Contracts Scotland will provide some of the information that is required, however public bodies will have to gather the additional information from other internal sources. Similarly PCS Tender will contain some but not all of the information required.

Contracts Register
30.  For procurements which were commenced before 18 April 2016, do public bodies have to publish a contract award notice and include details of the contract in their contracts register?

No. Only regulated procurements, including a call-off contract, which commenced on or after the 18 April 2016, and which results in a contact, will require the publication of a contact award notice and will have to be included on a public body’s contracts register.

31. What is an acceptable 'lag time' for updating the contracts register?

Publication of a contract award notice on PCS will automatically populate the contracts register section of PCS for all regulated contracts commenced on or after the 18 April 2016.

In respect of regulated and EU-regulated procurements, a contract award notice must be published not later than 30 days after the award of the contract, therefore this would be a reasonable timeframe to ensure contracts are included in the contracts register.

32. Does the contracts register have to be on a public body’s own website?

A public body’s contracts register must be publicly available on the internet, this does not require it to be available on a public body’s own website.

General Issues
33. Will the Scottish Government provide any guidance on utilities contracts?

It is hoped that overview guidance on both utilities contracts and concession contracts will be available shortly.

34. If a framework agreement is commenced prior to the 18 of April 2016 what regulations apply to the resultant call offs / mini competitions?

The contracts resulting from the call-offs/mini competitions of a framework agreement that was commenced prior to 18 April 2016 must be awarded in accordance with the provision of the Public Contracts (Scotland) Regulations 2012. 

In addition, in respect of any call-off contracts which commence on or after 18 April 2016, which are equal to or above the threshold value of a regulated procurement (£50,000 goods / services and £2 million for works contracts), even if they are the result of a framework agreement which commenced prior to that date, the provisions of the Act will apply to the call-off contracts.  The exceptions to this are the following sections of the Act: section 8(2) – sustainable procurement duty; section 11 – supported businesses; section 23(1) – publication of contract notices and section 27 – exclusion grounds.

35. How do you determine whether or not a concessions contract is equal to or above the concessions advertising threshold for the OJEU?

The value of the concession contact is the total turnover of the concessionaire generated over the duration of the contract, net of VAT, as estimated by the contracting entity, in consideration for the works and services which are the object of the concession contract and the supplies incidental to such works and services. See regulation 8 of the Concession Contracts (Scotland) Regulations 2016 for full details.