Although European in origin, procurement law has always been different in Scotland than in the rest of the UK. The current suite of Directives has been implemented in Regulations by the Scottish Ministers in a different way than at Westminster. The same will no doubt be true when the 2014 Directives are implemented (regardless of what happens in the interim with the independence referendum). At the sharp end of procurement, the different court processes in Scotland can also have a substantive impact.
The gap is about to widen further. Last week, the Scottish Parliament passed the Procurement Reform (Scotland) Bill. When it achieves Royal assent the Act will bring into law the Scottish Government’s procurement policy objectives. There will be much to come in the detail of regulations under the Act, but for now we present the headlines and highlights.
Extent
The Act will apply to “contracting authorities” only i.e. not to the companies and organisations caught by the utilities regime.
The financial thresholds are lower than the EU regime: £50,000 for goods and services and £2m for works.
Contracts and frameworks are covered. Dynamic Purchasing Systems are, for now, not.
General procurement duties and enforcement
The well-rehearsed duties applying to regulated EU procurements – transparency and equal treatment, for example – are applied to the contracts above the new thresholds, as are specific obligations such as the giving of reasons to unsuccessful bidders and providing additional information which is requested.
Aggrieved bidders will have recourse to the courts for damages or interdict (injunction), but the automatic suspension process has not been replicated.
Sustainable Procurement Duty
The new sustainable procurement duty means that, prior to tendering, the buyer will need to assess how the process can:
- benefit the “economic, social, and environmental wellbeing” of the area concerned;
- include local SMEs, third sector bodies and supported businesses;
- encourage innovation.
Tests of relevancy and proportionality mean that following assessment nothing can be done, but it will be a new step in the process for contracting authorities to consider. A failure in this new duty is not actionable by bidders.
Community Benefit Requirements
A contracting authority needs to consider community benefits for large contracts (above £4,000,000). The question to be asked in so doing is how the specific aims of the contract can improve the general economic, social and environmental well-being of the authority’s area. Statutory guidance will be published on the topic.
Living Wage
After much parliamentary debate, several amendments were made at the final stage of the passage of the Bill in relation to the “Living Wage” (currently £7.65 per hour in Scotland). There was an analysis of the policy of the Greater London Authority, whether Scotland should go further, and conflicting views as to the compliance of the options with EU law (and so the competence of the Scottish Parliament to legislate for it).
The new Act includes measures designed to encourage payment of a “Living Wage”, without mandating it. Where it is relevant to the performance of the contract, authorities must consider as part of their procurement strategy a bidder’s general approach to engagements with its workforce. Again, statutory guidance will be published on the topic.
Planning and reporting
The processes around procurement will become more transparent, as each authority will be obliged to publish an annual procurement strategy and an annual report against that strategy, and based on these the Scottish Government will itself produce a consolidated annual report. In addition, each authority will have to keep a register of contracts disclosing facts such as the name of the contractor and the subject matter, start and end dates, options, and value. Use of the http://www.publiccontractsscotland.gov.uk/ tender notice portal becomes mandated.
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