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5. Procurement Policy Framework
The Scottish Government's Scottish Procurement Directorate ( SPD) is responsible for developing and advising on procurement policy for the public sector in Scotland. Through the Public Procurement Reform Programme, SPD aims to:
- improve collaboration in procurement across public bodies in Scotland;
- ensure best Value for Money is met, i.e. contracts are awarded on the basis of Most Economically Advantageous Tender ( MEAT), evaluating both the price and quality of the tenders submitted as the optimum combination of whole-life costs and quality;
- support better and more consistent practices;
- implement effective policy, regulation, and clear guidance;
- provide a point of enquiry for suppliers;
- improve access to contract opportunities;
- recognise whole-life costs and sustainable procurement; and
- adopt a common, innovative and advanced e-commerce platform across public bodies in Scotland.
Public sector procurement in Scotland takes place within the framework of European, UK and Scottish legislation. These are based on five key principles - equal treatment, transparency, proportionality, mutual recognition, and confidentiality. The rules for Public procurement are bound within:
- EU Treaty Obligations.
- EC Procurement Directives.
- The Public Contracts (Scotland) Regulations 2006.
- The Utilities Contracts (Scotland) Regulations 2006.
The Public Contracts (Scotland) Regulations 2006 set out threshold values above which contract opportunities must be advertised in the OJEU.
The threshold values on 1 January 2008 are shown below. Please note values are Net of VAT.
| SUPPLIES | SERVICES | WORKS |
|---|
Entities listed in Schedule 1 (primarily Central Government) | £90,319 | £90,319 | £3,497,313 |
|---|
Other public sector contracting authorities | £139,893 | £139,893 | £3,497,313 |
|---|
Value for Money (vfm) and Contract Award - All public sector organisations procuring goods and services must ensure they obtain value for money. This means they must choose the bid that offers 'the optimum combination of whole life costs and quality'. In Scotland, it is policy to award contracts on the basis of Most Economically Advantageous Tender ( MEAT), evaluating both the price and quality of the tenders submitted. Quality can include a number of factors including technical merit and functional characteristics.
To assess MEAT, a price:quality ratio will be applied which balances the relative importance of price and quality in the tender. For example, where performance takes a high priority a price:quality ratio of 30:70 may be applied. The relative importance of the criteria on which the contract will be awarded will be listed in the "Invitation to tender" documentation.
Contract value - Bear in mind that contract values are an estimate of the value of the whole requirement for a good or service over the period of a contract. This may incorporate spend over a number of years. For example, a local authority contract for services valued at £160K may deter a business from competing, however, if the business considers that the value could relate to a period of 4 years, the contract could be more attractive to them at a level of £40K per year.
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