Procurement Strategy & Annual Procurement Report

Procurement Strategy

The Procurement Reform (Scotland) Act 2014 requires any public organisation which has an estimated annual regulated spend of £5 million or more (excluding VAT) to develop and review a procurement strategy annually before the start of the next financial year.  This requirement also applies to an organisation that becomes aware of having this level of spend during the year.

This procurement strategy should set out how the organisation intends to carry out its regulated procurements  i.e. procurements with an estimated value equal to or greater than £50k (excluding  VAT) for goods & services (or £2,000,000 excluding VAT for a public works contract).

Scottish Ministers should have been notified of the publication of the strategy by sending an email to ProcurementStrategies@gov.scot, attaching the procurement strategy or including a link where the procurement strategy can be accessed.

The procurement strategy has an important role in setting out how an organisation runs its procurement function. The procurement strategy allows an organisation to provide a strategic focus for its procurement activities, including contract and supplier management, and an overview on how its approach to procurement supports its broader aims and objectives. Documenting a procurement strategy and establishing a review process will:

  • help with strategic planning;
  • increase transparency and visibility;
  • provide a better basis for engagement and remove unnecessary inconsistencies.

Each procurement strategy will be proportionate to the size and spend of the organisation. However, there are some fundamental principles which will apply in each case. In general terms, the procurement strategy should demonstrate how the organisation's approach to procurement supports delivery of its broader aims and objectives. An important part of the procurement strategy preparation process for and organisation will be assessing its aims and objectives with the resources available to it. Inevitably priorities will have to be made and it is expected that these will be consistent with, and support, the organisation's overarching ambitions.

Once the procurement strategy is developed, it should be approved by Heads of Service/the Senior Management Team (or equivalent).

The procurement strategy should be measured and reported on an on-going basis with any significant slippages or deviations being highlighted to the appropriate stakeholder(s) for information, advice and assistance to get back on track.

Annual Procurement Report

In addition to the mandatory procurement strategy, to meet regulatory requirements the organisation must now also prepare and publish an annual procurement report disclosing how its procurement activity has complied with its published procurement strategy. 

The Procurement Reform (Scotland) 2014 Act lists the minimum requirements that the annual procurement report must contain. The Annual Procurement Report Guidance and Template below provides further guidance on the information an organisation needs to include in its annual procurement report to meet its legal reporting obligations, as well as providing information on other content that an organisation may choose to include.

The procurement strategy/revised procurement strategy and annual procurement report should be published in a way that the organisation considers appropriate, but must include publication on the internet.

Annual Report on Procurement in Scotland

After the end of each financial year, Scottish Ministers must prepare a report based on the information contained in the published annual reports from public organisations.  This is called the Annual Report on Procurement in Scotland.

The Annual Report on Procurement in Scotland by Scottish Ministers will be based on information contained within individual annual procurement reports and such other information that is considered appropriate.  Some key points are:

  • An organisation must notify the Scottish Ministers when publishing an annual procurement report under section 18 of the Procurement Reform (Scotland) Act 2014 (“the Act”);
  • An organisation must notify the Scottish Ministers when publishing a procurement strategy or any revised strategy prepared under section 15 of the Act; and
  • All annual procurement reports published within four months of the end of the relevant authority’s financial year will be included in an analysis that will inform the Scottish Ministers annual report on procurement activity in Scotland.

Further Information

Further guidance and blank templates are provided below for your use.

Any documents you need are listed below