Summary of changes to the public procurement rules in Scotland

From 18th April 2016 a number of changes to public procurement regulations in Scotland will come into effect. These changes aim to make public contracts more accessible for small and medium sized businesses, and so a number of clauses have been introduced to this end. Amongst other things, the key changes affecting SME’s are:

  • The minimum time limits for procurement exercises have been reduced, meaning that contracts can be put in place more quickly.
  • The minimum level of annual turnover which a contracting authority can require a business to have in order to bid will now be limited to no more than two times the value of the contract, apart from in exceptional circumstances. This should have the effect of making it easier for smaller businesses to bid for public work.
  • There is a new ground for exclusion which deals with breaches of social, environmental and employment law obligations. When a contracting authority can demonstrate by any appropriate means that a business has breached one of these obligations, it may, at its discretion, choose to exclude that business from bidding for contracts.
  • The concept of a European Single Procurement Document (ESPD) is introduced. This will allow businesses to complete one document containing their basic selection and exclusion information and use this in competitions across Europe, building on the progress made in Scotland through the development of the standard pre-qualification questionnaire.
  • The Scottish Model of Procurement places an emphasis on value for money being a result of an appropriate balance between cost, quality and sustainability. In line with the consultation feedback, the Scottish Government has therefore decided to make it clear in law that contracts should never be awarded on the sole basis of lowest price or lowest cost.
  • Contracting authorities will still be able to reserve contracts to supported businesses. The public procurement directive has changed the definition of supported business for this purpose, however. Currently, a contracting authority can reserve contracts to supported businesses if at least 50 per cent of their work force is disabled. Under the new rules, a contracting authority will be able to reserve contracts to supported businesses or supported employment programmes whose main aim is the social and professional integration of disabled or disadvantaged persons, and where at least 30 per cent of the employees are disabled or disadvantaged persons.
  • A contracting authority must now consider dividing its requirements into smaller lots, which might encourage smaller businesses to bid. Where an authority decides not to do this, it must explain why it has not done so. Contracting authorities will be able to award more than one lot to the same tenderer, and may award contracts combining several or all lots when they have indicated in the contract notice that they might do this.

More information on these changes can be found on the Scottish Government Website.

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