3. Contracting activity
Our approach to how we buy goods, services and works incorporates our priorities and the Scottish Model of Procurement . We have developed this approach with our public sector partners and the procurement centres of expertise, and through significant involvement with the business and third sector communities.
This 'risk and opportunity' based approach allows us to focus our resources on areas which are most likely to lead to benefits such as financial savings, jobs, training and reduced carbon emissions and waste, while encouraging innovation. It will also help us to focus on how national and organisational outcomes may be supported through the procurement process.
For each procurement project valued at £50,000 or over, we develop an individual sourcing strategy. These strategies are based on and supported by the sustainable procurement tools such as sustainability test and the output of the Sustainable Public Procurement Prioritisation Tool ( SPPPT).
Figure 1 Scottish Model of Procurement
In-line with statutory guidance under the Procurement Reform (Scotland) Act 2014 on the sustainable procurement duty, these tools provide a structured approach to assessing spending categories. They help to identify opportunities to include economic, social, and environmental considerations in contracts, and are available for use across the whole of the Scottish public sector.
Our contract activity covers three main areas of spending.
National collaborative frameworks and contracts
We provide framework agreements and contracts for commonly purchased goods and services which are used across the public sector. These are open to all Scottish public sector organisations as well as charities registered in Scotland.
Sectoral collaborative frameworks, contracts and support
for the central government family of organisations
For example, agencies and non-departmental public bodies.
- Contracts we let for Scottish Government use only
These areas are managed through the following groups:
- Collaborative Information and Communication Technology;
- Collaborative Corporate and Professional Services;
- Collaborative Utilities and Facilities Management;
- Central Government Procurement Shared Service ( CGPSS);
- Scottish Government Procurement;
- Scottish Government More Powers Procurement; and
- Delegated Purchasing.
Figure 2 Procurement teams
We have a scheme of 'delegated purchasing authority' in place to make sure that buyers have the necessary skills, qualifications and experience to place contracts. Our staff are not allowed to enter into a contract without written authority from our Director of Procurement.
Our contracts deliver a wide range of economic, social and environmental benefits as well as significant financial savings for the public sector. In the financial year 2015/2016 our portfolio of contracts was valued at over £925 million and delivered savings of more than £133 million. You can see details of the contracts we have placed on the Public Contracts Scotland website.
Figure 3 Procurement led by us - savings 2015/16
Figure 4 Procurement led by us - spending by portfolio 2015/16
Collaborative national and sectoral frameworks and contracts
Collaborative procurement is about achieving value for money for the Scottish public sector by working in partnership with buying organisations, centres of expertise (CoEs) and suppliers.
The contracts and frameworks placed by our buying teams have a combined value of over £800 million per year. They can be used by public organisations across Scotland and cover a range of goods and services. You can find details of our current collaborative agreements on our website.
Over the last eight years, collaborative procurement led by us has delivered over £615 million in savings through buying common goods and services on behalf of the public sector.
Collaborative contracts (both current and new) in the three-year period 2016/2017 to 2018/2019 are expected to deliver value-for-money savings of £256 million against a total spend of £2,472 million. This is broken down by portfolio as follows.
Figure 5 Collaborative procurement led by us - forecast savings
Forward plan of our collaborative contracts
We publish a forward plan of possible collaborative opportunities from public sector buying organisations in Scotland, including ourselves, which may be advertised over the next 12 to 18 months.
While most of these projects involve re-competing existing contracts and frameworks, there are some new initiatives to meet ministerial policy objectives, most notably the waste-brokerage contracts.
Central Government Procurement Shared Service ( CGPSS)
Introduced in April 2014, CGPSS provides both operational and strategic support in all aspects of procurement to make sure organisations get the most value and best performance from their spend with contractors, manage risk, and keep to changing legislation and policy.
The Scottish Government Procurement Team
The Scottish Government Procurement Team provides support for all our directorates. The team supports key ministerial policies which together are worth over £114 million per year.
The Scottish Government More Powers Implementation Team
As more power passes to us under the Scotland Act 2016, commercial arrangements for services supporting this are being put in place. At the time of writing (2016) these services are provided by several UK Government departments, for example the Department for Work and Pensions ( DWP), the Crown Estate, and the Department for Business, Energy and Industrial Strategy.