Changes to public procurement rules in Scotland move a step closer

This article provides an update on reforms to the public procurement rules in Scotland, including when changes are expected to be laid before the Scottish Parliament.

21 August 2015

In February of this year our article, Consultation on changes to public procurement rules in Scotland,  highlighted that the Scottish Government had published a consultation on plans to change the public procurement rules in Scotland – this included discussing elements of the Procurement Reform (Scotland) Act 2014. The consultation ran from 9 February to 30 April 2015 and sought views from everyone with an interest in public procurement in Scotland on the contents of the proposals set out in the consultation.

On 10 August the Scottish Government published an analysis of all non-confidential responses to the public consultation.  140 responses were received and, on the whole, the Scottish Government has concluded that the majority of respondents agreed with its proposals.

The main themes to emerge from the consultation were the need for transparency, consistency and proportionality. Many respondents asked for clear guidance to be provided to ensure discretion is applied consistently by procuring authorities. As a consequence of being given greater discretion respondents also asked for guidance to be published to help procuring authorities mitigate against the risk of facing legal challenges because of decisions made under the new regulations.

Other key themes include:

  • The vast majority of respondents agreed that contracts should not be awarded on the basis of price alone.
  • Procuring authorities should retain discretion to split contracts into lots and to award more than one lot to the same tenderer. However, a large number of respondents opposed the idea of introducing a mandatory requirement to split contracts into lots as this may create complex contract chains.
  • Most respondents agreed that procuring authorities should be given discretion to decide whether or not to exclude tenderers where there is evidence suggesting a breach of, amongst other things, environmental, social and labour law obligations, and a significant failure to perform an earlier contract.
  • The Scottish Government should continue to progress the work plan from the Construction Review report rather than requiring the use of BIM in design contests and works contracts.
  • Most respondents agreed that the same rules on selection criteria should apply to lower value regulated contracts as to higher value EU regulated public contracts.

The overall positive nature of the responses endorses the Scottish Government’s coordinated approach to implementing the EU Procurement Directives and the Procurement Reform (Scotland) Act 2014. Procuring authorities, bidders, subcontractors and funders alike now await publication of the first of the new statutory guidance on work practices in the autumn, followed by the draft regulations later this year. Everyone involved in public procurement in Scotland should be making best use of the time available between now and the publication of the draft regulations to familiarise themselves with the contents of the Procurement Reform (Scotland) Act 2014 because, subject to minor variations being made to ensure compliance with the EU Procurement Directives, it looks like the Act will by and large be implemented in its current form. Entities that operate pan-UK will also need to ensure internal procedures are reviewed and updated to reflect the divergence in procurement practice between Scotland, England and Wales due to the former introducing the concept of ‘regulated procurements’.

Shepherd and Wedderburn will provide a further update on this topic once the draft regulations have been published.

The Scottish Government’s aim is to put the new procurement regulations before the Scottish Parliament by the end of 2015. The new regulations must be in force no later than 18 April 2016.

The full analysis of the non-confidential responses received is available here