Advantages of Competitive Dialogue are:

• it allows organisations to clarify, specify or optimise the final bids
• your negotiations with your ultimate preferred bidder may also confirm financial commitments or other terms contained in the tender to finalise the contract.  This helps, for example, in situations where a preferred bidder needs to secure final planning permission for a project before the contract can be concluded.

Care should be taken before selecting this route:

• you must ensure that you legally satisfy the criteria of using Competitive Dialogue
• you should be aware that this process is costly and resource intensive for you and bidders
• this procedure is likely to result in a significant increase in procurement timescales.

You should publish your minimum requirements, award criteria and their weightings.  These cannot be changed during the negotiation process.  

If your process will be conducted in successive stages, this must be stated in the Contract Notice or descriptive document.

The day after the Contract Notice is sent for publication, at least 30 days must elapse before the closing date for receipt of selection stage information. 

Note that after this stage there are no further set minimum timescales for submissions, however timescales must be reasonable.  When fixing time limits, you must take account of the complexity of the contract and the time required for writing bids. You must set out an indicative timeframe in the Contract Notice and/or a descriptive document.

You must allow any bidder to submit a request to participate in response to a Contract Notice within the time limit set.

You then invite the selected candidates to participate in the dialogue, using an Invitation to Take Part in Dialogue (ITPD). There is no minimum period specified for bids in response to this document, but it must be reasonable. 

You may limit the number of suitable bidders who meet your selection criteria to be invited to participate in the procedure.  You should invite at least three bidders (if three or more meet selection criteria) to the dialogue process in order to ensure genuine competition.

Bidders do not submit tenders before starting dialogue with your Organisation.

Following this initial response, you may decide to have several stages of negotiations/dialogue in order to develop solutions and reduce the number of solutions (if indicated in the contract notice or the descriptive document).

If there are successive stages, you must ensure that in the final stage the number of solutions remaining make for genuine competition.  This means there must be enough solutions or qualified bidders. 

You can decide on the number of dialogue stages.   

You may reduce the number of bidders by applying the award criteria to suppliers’ proposals during multiple dialogue stages before using the criteria again to assess bidders’ final bids.

During the dialogue, Organisations must ensure equal treatment of all participants. 

Any clarifications, specification, optimisation, additional information or negotiations must not involve changes to the essential aspects of the tender.  You must not provide information in a discriminatory manner which may give any bidder an advantage over others.

You must inform all bidders when the dialogue is being concluded.

You must invite each remaining bidder to submit their final tender on the basis of the solution(s) presented and specified during the dialogue.

After the Invitations to Submit Final Tenders are sent out, you must set a deadline for receipt of final tenders. There is no minimum period specified but these must be proportionate by taking into account the contract complexity and the time required to prepare and submit a bid.

You must extend the time limits for the receipt of tenders so that all bidders concerned are aware of all of the information needed to produce tenders e.g. where additional information has been requested by a supplier in good time and is not supplied at least six days before the time limit fixed for the receipt of tenders, or where there are significant changes made to the procurement documents. 

The length of extension must be proportionate to the importance of the information or change.

Final tenders may be further clarified before award of the contract, but this must not involve the essential aspects, cause discrimination, or distort competition.  You apply the award criteria to assess bidders’ final bids and award the contract.

For many care and support services contracts, an organisation may use the procurement procedures, tools and techniques of its choosing. You should follow a procurement procedure, as a matter of best practice, that is proportionate to the value of the contract and to take account of some fundamental considerations (for example, the Principles of Procurement and Fair Work Practices).

When doing so, you may choose to adapt or streamline the Competitive Dialogue procedure described in the Public Contracts (Scotland) Regulations 2015. If you do so, you are not obliged to follow the detailed procedural requirements set out in those Regulations. You should therefore not refer to the Regulations in the tender documentation issued to participants, as this may create an expectation that the detailed procedural requirements will be followed. In all cases, you should ensure that the procurement process is described accurately and clearly and then adhered to.

You can use Competitive Dialogue where all of the submissions you have received for an Open or Restricted Procedure are classed as either irregular or unacceptable.

A tender is irregular where:

• it does not comply with the Procurement Documents
• it was received late
• there is evidence of collusion or corruption
• it has been found by you to be abnormally low

A tender is unacceptable where:

• it was submitted by a bidder that does not have the required qualifications; or
• the price tendered exceeds your Organisation’s budget (as determined and documented before the Procurement Procedure started.

You may authorise or require variant bids. However this must be specified in the Contract Notice.

Your Procurement Documents must set out the minimum requirements and how the variant will be evaluated. Variants cannot be considered unless:

• they are specified within your Procurement Documents
• they are linked to the subject matter of the contract
• they meet the minimum requirements.

All variant bids should be evaluated using the same criteria as the standard bids and compared on a like-for-like basis.

You should also consider whether to allow potential bidders to offer different TUPE scenario options within their bids. If so, you must provide clear directions to bidders to ensure that bids are compared on a like-for-like basis.

The Invitation to Submit a Final Tender is a procurement document that can only be finalised in the course of the actual dialogue.  As a result it does not need to be made available at the same time as the Contract Notice.

The procurement documentation relevant to the first part of the procedure (up to and including the Invitation to Take part in Dialogue (ITPDs) must be made available:

• through the internet
• for free
• simultaneously
• by electronic means
• include all ITT documents (unless exclusions apply, for example confidentiality) when the Contract Notice is published. In such cases another, non-internet method must be used to provide the information.

The activities you undertake at this stage must be carried out in a carefully managed manner that supports the Principles of Procurement.

For many care and support services contract, an organisation may use the procurement procedures, tools and techniques of its choosing. You should follow a procurement procedure, as a matter of best practice, that is proportionate to the value of the contract and to take account of some fundamental considerations (for example, the Principles of Procurement and Fair Work Practices).

When doing so, you may choose to adapt or streamline the Competitive Procedure with Negotiation described in the Public Contract (Scotland) Regulations 2015. If you do so, you are not obliged to follow the detailed procedural requirements set out in those Regulations. You should therefore not refer to the Regulations in the tender documentation issued to participants, as this may create an expectation that the detailed procedural requirements will be followed. In all cases, you should ensure that the procurement process is described accurately and clearly, and then adhered to.

You may authorise or require variant bids.  However this must have been specified:

• in the Contract Notice 
• where a PIN is used in the invitation to confirm interest. 

The Procurement Documents must set out the minimum requirements and how any variant will be evaluated. Variants cannot be considered unless this has been done, they are linked to the subject matter and they meet the minimum requirements.

Where it is relevant, you should also consider whether to allow bidders to set out different TUPE scenarios within their bids. If you elect to include this in your tender, you should provide clear directions to tenderers to ensure that bids can be compared on a like-for-like basis.

All variant bids should be evaluated using the same criteria as the standard bids and compared on a like-for-like basis.

You may authorise or require variants on the contract requirements, as long as it has been specified:

• in the Contract Notice; or
• You may authorise or require variant bids.  However this must have been specified in the Contract Notice.  

The Procurement Documents must set out the minimum requirements and how any variant will be evaluated. Variants cannot be considered unless this has been done, they are linked to the subject matter and they meet the minimum requirements.

Where it is relevant, you should also consider whether to allow bidders to set out different TUPE scenarios within their bids. If you elect to include this in your tender, you should provide clear directions to tenderers to ensure that bids can be compared on a like-for-like basis.

All variant bids should be evaluated using the same criteria as the standard bids and compared on a like-for-like basis.

Since your final documents may be dependent upon the negotiations held, it is not practical to expect you to publish all Procurement Documents with the Contract Notice.

Invitations to Tender (ITT) should be sent to all selected bidders:

• for free
• simultaneously
• in writing;
• by electronic means
• include all ITT documents (unless exclusions apply, for example confidentiality).

As per the Public Contracts (Scotland) Regulations 2015, The minimum number of bidders is 3.

If an ITT is issued near to the closing date, bidders should be made aware that the submission date is imminent.

The ITT time limits for receipt of tender submissions should be proportionate to the contract complexity and the time required to prepare and submit a bid (bearing in mind minimum requirements).

As per The Public Contract (Scotland) Regulations 2015, your Organisation must extend the time limits for the receipt of tenders so that all bidders are aware of all of the information needed.  When:    

• additional information has been requested by a bidder in good time and not supplied at least 6 days (or 4 days in accelerated procedures) before the receipt of tenders deadline or
• where there are significant changes made to the procurement documents.

Any extension should be proportionate to the complexity of the change and /or the additional information being provided.

To proceed with a tender extension the necessary approval should be obtained in accordance with your internal governance.

If the date is amended, the new date should be notified to all bidders.  If any tenderer indicates that they have already submitted a tender, they should be able to withdraw their original bid and submit a revised one (in line with the extended tender deadline).

Care must be taken to guard against fraud.  A full audit trail must be documented to ensure no information is passed to a bidder, allowing them to amend bids already seen by the Organisation.

The activities you undertake at this stage must be carried out in a carefully managed manner that supports the Principles of Procurement.

For many care and support services contracts, an organisation may use the procurement procedures, tools and techniques of its choosing.  You should follow a procurement procedure, as a matter of best practice, that is proportionate to the value of the contract and to take account of some fundamental considerations (for example, the Principles of Procurement and Fair Work Practices).

When doing so, you may choose to adapt or streamline the Restricted Procedure described in the Public Contract (Scotland) Regulations 2015. If you do so, you are not obliged to follow the detailed procedural requirements set out in those Regulations. You should therefore not refer to the Regulations in the tender documentation issued to participants, as this may create an expectation that the detailed procedural requirements will be followed. In all cases, you should ensure that the procurement process is described accurately and clearly, and then adhered to.

Stage 1

Selection Stage

• Following a call for competition, any bidder may submit a request to participate.
• Buyers must issue a Single Procurement Document (SPD) for procurement exercises over the threshold (route 3) and it is recommended that it is also used for all route 2 procurements. The Selection stage evaluates the bidder's capacity and capability, not how the bidder will deliver the requirement. Therefore, this is a backward-looking process i.e. you cannot consider matters specific to performance of the contract at this stage.
• You must state in the Contract Notice or in the Invitation to Confirm Interest:
  • your objective and non-discriminatory criteria or rules that you intend to apply; and
  • the minimum number of bidders that you intend to invite and, where applicable, the maximum number.
• Timescales to consider: bidders must be given a minimum of 30 days (from the day the Contract Notice is sent for publication) to respond to a call for competition (or 25 days where the organisation has indicated that it will accept an electronic submission).

Stage 2

Invitation to Tender (ITT) Stage:

• The minimum number of bidders is five and
• the number of candidates invited must be sufficient to ensure genuine competition.  Note: if the number of bidders meeting the selection criteria is fewer than five the procurement can still proceed. 
• You must issue ITT documents for completion by bidders successful at the Stage 1 selection stage
• Timescales to consider: bidders must be given a minimum 30 days to respond to the ITT (or 25 days where the organisation has indicated that it will accept an electronic submission).

Bidders must be given a minimum of 30 days (from the day the Contract Notice is sent for publication) to respond to a call for competition (or 25 days where the organisation has indicated that it will accept an electronic submission).

Sub-central buyer organisations may set the time limit for the receipt of tenders.  However this must be done by agreement with the bidders successful at selection stage.  The same time limit must be applied to all bidders.

Where a time limit cannot be agreed a minimum of 10 days must elapse between despatching the ITT and the deadline for submission.

Note: A sub-central buyer organisations is any Organisation which does not belong to Central Government or National Health Services.

• Organisations can choose to use a Prior Information Notice (PIN) to shorten the time period for the receipt of tenders.
• If using a PIN a minimum of 10 days needs to elapse after the dispatch of the ITT before the closing date for the receipt of tenders if:
• the PIN includes certain information required for the Contract Notice, if  it is available when the PIN is published; and
• the PIN is sent for publication between 35 days and 12 months before the Contract Notice is published.

Organisations are allowed to shorten certain deadlines in case of urgency. 

• Urgency needs to be suitably justified. This need not be an extreme urgency from unforeseen events  and/or not caused by your Organisation. 
• Your contract notice must include justification.
• After the despatch of your Contract Notice, you need to allow at least 15 days for the submission deadline of selection stage information.
• Following the completion of your selection stage assessment you may despatch the ITT.
• A minimum of 10 days must then be allowed before the submission deadline.
• Sub-central Organisations may agree on the submission deadline with bidders. If there is no agreement, a minimum of 10 days must be allowed by you for the submission of tenders

In a Restricted Procedure, it is not necessary to make all procurement documentation available when the Contract Notice is published.

It is necessary that your organisation provides sufficiently precise information to allow bidders to identify the nature and scope of the requirement.  From this information the bidders will decide whether to express an interest to participate i.e.. it is essential that the SPD (Scotland) is used and is available when the Contract Notice is published.

All Procurement Documents should be made available via the internet with free and unrestricted access. If exceptions apply, which mean that the Procurement Documents cannot be issued electronically, the Contract Notice must detail how the Procurement Documents will be made available.

If the documents cannot be accessed immediately by electronic means, then the timescales should be extended by five days.  The exception is in a case of duly substantiated urgency.

The ITT time limits (for receipt of bidder tender submissions)  should be proportionate to the contract complexity and the time required to prepare and submit a bid.  You must take into account the minimum requirements when setting this time limit.

Time limits for the receipt of tenders must be extended:

• if you significantly change the procurement documents;
• where additional information requested by a bidder in good time  is not supplied at least six days (or four days in accelerated procedures) before the time limit of the receipt of tenders.

The length of extension of a tender deadline should be proportionate to the complexity of the change and/or the additional information being provided.

To proceed with a tender extension the necessary approval should be obtained in accordance with your internal governance procedures.

If the date is amended, the new date should be notified to all tenderers. If any tenderer has already submitted a bid then they should be given the opportunity to withdraw their original bid and submit a revised one.  This revised bid should meet the extended tender deadline.

You cannot negotiate on fundamental aspects of contracts i.e. areas likely to distort competition such as price.

Dialogue with bidders should be limited to requests for clarification.

You should record any discussions with bidders.  Meetings which discuss proposals/requirements should be avoided as these may distort competition.  For more information please refer to Post Tender Clarification.

The activities at this stage must be carried out in a carefully managed manner that supports the Principles of Procurement.

For many care and support services contracts, an Organisation may use the procurement procedures and tools and techniques of its choosing.  You should follow a procurement procedure, as a matter of best practice, that is proportionate to the value of the contract and to take account of some fundamental considerations e.g. the Principles of Procurement and Fair Work Practices.

When doing so you may choose to adapt or streamline the Open Procedure described in The Public Contract (Scotland) Regulations 2015.  If you do so, you are not obliged to follow the detailed procedural requirements set out in those Regulations.  You should therefore not refer to the Regulations in the tender documentation issued to participants; this may create an expectation that the detailed procedural requirements will be followed.  In all cases you should ensure that the procurement process is described accurately and clearly and is adhered to.

The selection and award criteria must be developed and managed separately. It is however possible for you to conduct these stages simultaneously or in any order where the procedure allows. 

For instance, when using the Open Procedure you may assess the tenders (award stage) prior to checking minimum criteria are met. This should only be done if a small number of bids have been received.  You must still verify exclusion grounds and that the bids meet the selection criteria.

This evaluation needs to be carried out in an impartial and transparent manner.  No contract can be awarded to a bidder that should have been excluded or does not meet the selection criteria.

After despatching the contract notice, at least 35 days must elapse before the tender closing date. Where tenders may be submitted electronically, the number of days decreases to 30.

Your Organisation may publicise their future, planned procurement exercises by publishing a Prior Information Notice (PIN) on Public Contracts Scotland (PCS). However publishing a PIN does reduce your tender timescales later on.  If using a PIN, only a minimum of 15 days need to elapse after the dispatch of the Contract Notice before the tender closing date if:

• the PIN includes certain information required for the contract notice (if it is available when the PIN is published); and

• the PIN is sent for publication between 35 days and 12 months before the contract notice is sent.

Your Invitation to Tender (ITT) time limits for the receipt of bids should be long enough and reasonable for the bidders to tender, taking into account:

• the contract complexity; and

• the time required to prepare and submit a bid.

Extending or Changing a Tender Deadline

Changes to a tender closing date must be made if:

• significant changes are made to the Procurement Documents; and/or

• if information requested by a bidder (in a timely fashion) has not been supplied - a minimum of six days before the tender deadline (or 4 days in accelerated procedures). 

Extending a tender deadline should be proportionate to the complexity of the change and /or the additional information being provided. 

To proceed with a tender extension, the necessary approval must be obtained in accordance with your internal governance procedures.

If the date is amended, the new date should be notified to all bidders. If any bidder has already submitted a bid, they should be given the opportunity to withdraw their original bid and submit a revised one (in line with the extended tender deadline).

Urgency

Organisations are allowed to shorten certain deadlines in case of urgency. This needs to be suitably justified.

To use this procedure, you must provide a justification in the contract notice. The need must be genuinely urgent (e.g. a matter of safety) and it must have been caused by unforeseeable events and/or not your Organisation’s fault.

If your Organisation can appropriately justify urgency, the closing date for receipt of tenders can be 15 days after the contract notice was sent for publication.

Given the shortened timescales for this procedure you must make the Invitation to Tender (ITT) available from the start of the procurement i.e. when the contract notice is published.

If you decide to use an Open Procedure, you must provide full information about the requirements and qualitative selection process. The ITT documents must be issued to all bidders that request them.

All Procurement Documents, including the ITT, must be made available:

• for free direct download;

• from the internet;

• from the time they are sent to participants in the process; and

• with unrestricted access. 

The contract notice must specify the internet address at which the Procurement Documents can be accessed. 

If exceptions apply, which mean the Procurement Documents are not available electronically, the contract notice must detail how access can be achieved.  Timescales must be extended by five days if the documents cannot be accessed immediately by electronic means. An exception is  in a case of a substantiated urgency.

The Open Procedure allows for ITTs to be issued on request at any point prior to the date set for submission of tenders.

When an ITT is issued near to the closing date, the recipient should be made aware that the submission date is imminent.

You can clarify some aspects of the tender. You cannot clarify fundamental aspects where any changes may distort competition or cause discrimination.

Any discussions you have with bidders should be properly recorded. Meetings which discuss proposals/requirements in any detail should be avoided as they may distort competition. For more information, please refer to Post Tender Clarification.

The activities at this stage must be carried out in a carefully managed manner that supports the Principles of Procurement.  

Please consider Strategic and Public Social Partnerships; further information is provided below.

Additional guidance on determining the type and duration of the contract, and on transitional arrangements can be found in the Care and Support Services Contract Type, Duration and Transitional Arrangements.

As with other stages of a procurement exercise, you must consider conflicts of interest and fraud as part of the Commodity/service strategy stage. This must be in line with relevant procurement legislation and your Organisation’s own governance procedures. 

You must ensure that you take all appropriate measures to prevent, identify and remedy conflicts of interest. You must include measures to combat fraud throughout your procurement exercise. 

Your Organisation may seek a long-term strategic partner or partners  e.g. for a period of 10 or 20 years.  This may be to redesign and achieve major changes in service delivery and/or the use of resources.

For example, your Organisation may work with a supplier(s) to determine what range of services could be provided within available resources.  This would be instead of tendering for particular services. In this situation, the choice of strategic partner(s) should be transparent and through a competitive process in accordance with the public procurement rules.

PSPs are strategic partnering arrangements.  These are based on a co-planning approach where the public sector can work with third sector organisations.  In such cases you would share responsibility for designing services based around service user needs.

The Scottish Government has published guidance on developing and running Public-Social Partnerships..

A PSP typically comprises three stages:

• third sector organisations work with public purchasers to design a service;
• a consortium of third sector organisations(which may also involve the public sector) conduct a short-term pilot.  This helps to refine service delivery limits and maximise community benefits; and
• if the service is deemed successful, commissioners then consider the most appropriate approach to sustaining the PSP. This could involve a competitive tendering process but other methods of securing service delivery should also be considered.

You should also consider the current and possible future relationships between the Public Body and the Supplier. You should demonstrate how you intend to develop any relationship with a potential supplier going forward.

If you are entering a joint procurement exercise with one or more public sector organisations, you must agree the legal status  and requirements of such an exercise at this stage. 

You Organisation may either:

• agree a “lead” authority at this stage.  Legally, this lead authority will be the organisation responsible for forming the contract with the successful supplier(s), or
• enter a truly “joint” exercise.  This is where the conduct of the procurement is carried out in the joint name(s) of the participating organisations. 

In either of the above cases, the organisations are jointly responsible for ensuring they comply with all relevant procurement legislation.

Sometimes you could consider having only part of the procurement operating as a joint exercise.  In such cases the organisations would be equally responsible for any joint  areas. and retain sole responsibility for their own areas.

Having considered the previous points you can identify the position of your commodity/service as either Leverage, Strategic, Routine or Bottleneck. The Strategic Positioning Action Plan provides guidance as to the procurement approach you should adopt in each of these circumstances.

These suggested approaches  provide a starting point on how to proceed with your commodity/service. You must define these further still by looking at your specific commodity/service and the opportunities already identified using the Best Value Triangle.

In line with Statutory Guidance before starting your procurement you should consider whether Fair Work Practices are relevant and proportionate.  If so, you should include a question/questions on Fair Work, to be evaluated along with other relevant criteria. Your question(s) should be informed by the results of your pre-market engagement.

In line with Statutory Guidance, published under the Act, you should consider including a statement in your strategy outlining your commitment to implementing Fair Work First. The statement should highlight a range of approaches that you may use to promote Fair Work First. That strategy must include a statement on your general policy on the payment of a living wage to those delivering contracts where the value of your regulated contracts in a year will be equal to or greater than £5,000,000.

By reporting and monitoring the delivery of intended sustainable outcomes, such as Fair Work First, you can more easily demonstrate how you are complying with the Sustainable Procurement Duty.         

Organisations must determine if data processing activities are relevant to the commodity/service which is the subject of the procurement exercise.

Organisations must ensure that current and future procurement exercises (including contracts entered into before the legislation came into force) are compliant with GDPR and all relevant procurement documents make reference to the new legislation.

More detailed information on GDPR can found in Leadership & Governance.

Cyber Risks

If the contract will involve, support or rely on the digital processing of information, organisations should ensure that appropriate consideration is given to potential cyber risks and their management.

Further information on how to assess and manage cyber risks as part of the procurement process can be found in the Scottish public sector Guidance Note on Supplier Cyber Security. Buyers should assess cyber risks and develop minimum cyber security requirements as part of award criteria, if necessary. 

You should consider how you will ensure compliance to the contract.

Compliance is required from all parties throughout the whole Procurement Journey. Governance arrangements, management and budget holder behaviours  are key to ensuring compliance.

The Components of a Compliance Strategy document should encourage maximum uptake of a new contract. Members of the User Intelligence Group (UIG) should champion the contract.  Commitment from users should be obtained for the proposed strategy options.

There will be a number of potential options which are applicable to any commodity/service. These will vary with the type, size and complexity of the requirement.

In all cases, you should consider a 'Do Nothing' option as a benchmark.

The Commodity/Service strategy should include a summary of options that clearly details the:

• benefits,
• costs and
• risks

associated with each option.  These should demonstrate compliance with any legal obligations. This should help the selection of the required Commodity/Service Strategy option to be pursued in the short, medium and long term.

Estimated benefits within a commodity/service area can be obtained from sources such as:

• benchmarking,
• market testing,
• market trends,
• past discounts and 
• previous experience. 

Identification and assessment of “softer” benefits should be undertaken at this stage. 

Costs to implement sourcing strategies include:

• contract switching costs,
• supplier switching costs,
• resource investment,
• communications and roll out and
• cost of going to tender

The Options Appraisal summarises the various delivery options, considering the benefits and risks of each before selecting an option for recommendation.

The recommended option must satisfactorily meet the requirements, be affordable, viable and agreed with the UIG.

You must consider awarding your contract in separate lots. Division into lots can increase SME participation. 

Where you decide not to award a contract in the form of lots, you must indicate the main reasons for not doing so.  These reasons must be included in the relevant Procurement Documents, or in the procurement exercise written report.

Potential reasons for not subdividing contracts into lots may be:

• that it would risk restricting competition,
• it would make contract execution  excessively technically difficult or expensive, or
• the need to coordinate the different contractors for the lots could seriously risk undermining the proper execution of the contract.

You must  state in the relevant Procurement Documents, whether bids may be submitted for one, for several or for  all lots. Where more than one lot may be awarded to the same bidder contracts may be awarded that combine several or all lots. You must have specified this can happen and include the groups of lots that may be combined.  If you use this approach, you must think carefully about how the relevant evaluation matrices will assess all possible scenarios.

You can limit the number of lots that any one bidder can win.  To do so you must state the maximum number of lots per bidder in the relevant Procurement Documents. 

Where the application of the award criteria would result in one bidder being awarded more lots than the maximum number of lots per bidder, the Organisation would then apply the objective and non-discriminatory criteria or rules which must be indicated in the relevant Procurement Documents.

During the Profiling the Commodity stage of your procurement exercise, you should have considered whether bidders may sub-contract any of the awarded works or services. If so, question 4.C.4 from the SPD should be included to be evaluated alongside other criteria at selection stage.

Confirmation of how bidders will ensure payment of sub-contractors at all stages of the supply chain pertaining to the contract, within the standard 30 day payment terms and how this will be managed should be evaluated at award stage.

There are separate stops on the Procurement Journey on Contract Mobilisation and Implementation and Contract and Supplier Management (C&SM).Your approach must be considered during this 'Develop Commodity/Service Strategy' phase.

You must consider how the proposed options will operate throughout the life of the requirement. For example, if you decide to use an existing contract or framework agreement the contract implementation and management will be covered in the framework terms and conditions.  These must be complied with in full.

You must think about how the new goods or services will be introduced into your organisation.  Also how will  you move from your existing arrangements to the new arrangements?

You should also consider your transition or exit strategy for when this new contract or framework agreement comes to an end.

Once fully operational you should manage and develop the contract and supplier(s) to ensure  the contract requirements are met now, and in the future.

You must consider the resources required to implement and manage the contract or framework agreement. A designated contract manager should be identified. Additional guidance can be found in the Planning & Governance station.

You should detail the CSM requirements in the contract or framework agreement terms and conditions.  This will ensure both parties are clear on their contractual obligations. The contract should then be managed in accordance with these terms and conditions.

The level of CSM required depends on the risk, value and complexity of the contract. You will find guidance to help assess the potential level management of CSM required in the Contract and Supplier Management / Planning and Governance station.

Generally, "Routine" contracts will require a lower level of management than "Leverage" and "Bottleneck" (medium level), and "Strategic" which will require the highest level.

There may be opportunities for your organisation to make its own internal processes more efficient. Some of the key areas to consider during the procurement process are:

• Use of PCS-Tender
• The transactional procurement process: requisitioning, authorising, raising and sending purchase orders, goods receipting, invoicing and payment

Further guidance can be found in the Planning & Governance station.  

For additional guidance for Care and Support Services see Benefits and Risks to People who use Services and Service Delivery below.

Particularly for Care and Support Services, the outcome of the Supply Market Analysis should inform the organisations appraisal of the options for service delivery, including:

• in-house provision
• shared services
• procurement.Further guidance can be found in the Options Appraisal document at the foot of the page.

Once you have completed your Commodity Tree or Options Appraisal and Supply Market Analysis, this information will support grouping your requirements into suitable lots.  For example for a waste equipment disposal  category you may choose to procure plastic and metal bins through separate lots.

You should give consideration to the potential for third sector involvement and supported businesses and SMEs.

If you are not using lots in your procurement exercise you must provide the main reasons for this in:

• the procurement documents, or
• in your individual report and indicated in the procurement documents, or
•  your procurement exercise written report.

You should consider:

• Whether Transfer of Undertakings Protection of Employment Rights(TUPE) applies;
• Whether to allow potential service providers to set out different TUPE scenarios within their bids. If so, you must provide clear directions to tenderers to ensure bids can be compared on a like-for-like basis.

The public sector equality duty is set out in the Equality Act 2010.  It requires organisations to assess the impacts of new or revised policies and practices on people with different protected characteristics. To do so you need to consider the three needs of the public sector equality duty i.e.:

• To eliminate discrimination;
• to advance equality of opportunity; 
• to foster good relations between people with different protected characteristics.

The protected characteristics are:

 An organisation must also consider the need to undertake and publish an Equality impact Assessment (EQIA). Depending on your particular procurement, an EQIA may be an integral part of the procurement process.  It should help identify and mitigate negative impacts and identify opportunities to promote equality.  This can be done by looking at how your procurement might impact on people with a protected characteristic. For example for the service industry, which relies heavily on its labour force, an EQIA may help to identify new or improved ways or working.

The supply market sources document at the bottom of this page is a list of suggested external sources for supply market data.  This  may provide you with  useful information required to develop your commodity/service strategies.

Please note that you may require a licence or there may be a fee to use some of these sources.

For future reference, make a note of the sources consulted in a external data sources template. Your use of external data should be appropriately referenced throughout the process.

Although we have detailed external websites or publications, this is not a Scottish Government endorsement.

The overarching theme of early engagement is to identify the desired outcomes, risks and issues and permit potential suppliers to provide feedback on how the outcomes might be achieved, the risks and issues as they see them, along with feedback on timescales, feasibility and affordability. All discussions should flow from this theme.

Any cost discussions you have at this stage should be indicative only.  You should make this clear to potential bidders. 

Care should be taken to preserve transparency and equal treatment.

Frequently it is more appropriate to ask the market what solutions are currently or potentially available prior to advertising a contract.  This is explained further in the ‘Stakeholder Identification’ and Preliminary Market Consultation stations). The Public Contracts (Scotland) Regulations 2015 (Regulation 41) now include provision for Organisations to engage in market consultation. 

Any such market consultation must be carried out in a carefully managed manner. This must comply with the Principles of Procurement.

Market consultation can encourage bidders' creativity in their potential solutions. This can inform your decisions  on when and how to procure the best available solution(s).

Market sounding can be beneficial as a long-term strategy, even when you do not intend to carry out your procurement exercise soon. As a matter of courtesy you should be  transparent with suppliers about  this.

There is no formal process for market sounding.  Activities typically include researching and analysing the whole market  and meeting selected potential suppliers for discussion. Your Organisation must ensure that it takes appropriate measures to ensure that competition is not distorted by the participation of potential suppliers.

You can generate supplier interest by publishing advance notice of your likely requirements, for example through a Prior Information Notice (PIN) in Public Contracts Scotland (PCS).

Organisations should engage with a cross-section of potential suppliers.  This will  inform your strategic options i.e. the views of a Small and Medium sized Enterprise (SME) compared with a large or multi-national supplier may differ.

Market sounding improves public sector knowledge that is useful in a broader sense. For example UIGs greater understanding of relevant markets helps to develop their commodity/service strategy.  This could be in terms of how they currently operate  and how they may operate in the future i.e. changing technology, market entrants etc..

Early engagement with potential suppliers can be critical to success. It is vital to understand  key issues before starting the procurement process.   You should determine your desired outcomes, risks and issues and allow potential bidders to provide feedback.  For example on how the outcomes might be achieved, along with feedback on timescales, feasibility and affordability.

You should always be present at meetings with potential bidders. A bidder who understands your requirements and can offer innovative solutions and constructive advice should be present. The right attitudes must be adopted: respecting confidentiality, maintaining flexibility and openness.

The UIG should:

• Be open to new ways of shaping your requirement based on what the market may be able to provide;
• Consider the options for shaping the market: encouraging the market to develop in such a way that it can meet your requirements in the future;
• Engage the market - this provides an opportunity to ensure that the services provided are at the forefront of those available.

When procuring a service, you should also consider your organisation’s policy and approach to delivering services in-house.

In respect of the above questions and the following areas of guidance, you should consider specific stakeholder engagement activity and management.  For example:

• Will consultation with an economic development team member be necessary? 
• Can we identify what guidance we will need from the climate change team in terms of supply chain carbon assessments?

It is important to tie this into your stakeholder mapping exercises. 

In regards to the procurement of innovative goods and services, the UIG can facilitate improvements in the quality and delivery of public services and contribute to growth in the economy by encouraging potential suppliers to invest in and deliver pioneering solutions to support current and future public service needs.  Throughout this process, are should be taken to avoid distorting the market.

You must document the measures taken to ensure competition is not distorted during any prior involvement of candidates or bidders.

Talking to potential suppliers is at the core of market sounding. It is crucial to talk to the relevant potential suppliers - ideally, those who have achieved outcomes of a similar nature and scale.

Care must be taken to ensure those contacted are not given an advantage over other potential suppliers. It is equally important to ensure specifications are not written in such a way as to favour any particular potential supplier(s). If either of these approaches is not adhered to you could breach the Public Contracts (Scotland) Regulations 2015 and the procurement itself could be challenged. 

Measures to ensure competition is not distorted must include:

• Communicating to all potential suppliers the dates of any relevant information exchanged between parties in the market sounding;
• When tendering, giving adequate time limits for the receipt of tenders from interested parties.

Organisations are required to consider including community benefit requirements for all procurements. Where the estimated value of the contract is equal to or greater than £4 million (excluding VAT). For regulated procurements, Community Benefits may also be considered as part of Sustainable Procurement Duty requirements.

Community benefit requirements may not always be appropriate to your contract. You must consider their use by taking into account the nature of the contract, its duration and other factors. 

Care should be taken to ensure the requirements would not place a disproportionate burden on potential suppliers or have a wider negative unintended effect. This could be the case, for example, where training and recruitment requirements are included. Here, care needs to be taken to avoid displacement of existing trainees and employees in order to meet community benefit commitments. It should also be noted that training and employment opportunities require adequate contract length for these activities to be undertaken.

What Dimensions of Fair Work Practices can be Targeted?

• Engaging early with the market can help you gather information about the nature of Fair Work practices in the sector.  It  can provide information on what opportunities there are to address in your procurement exercise.  These should be relevant, proportionate and treat bidders equally;
• It can help you establish whether the supply chain is susceptible to exploitative practices.
• You can seek input from other areas of your own organisation.  For example stakeholders, industry bodies or trade unions.  This can establish which dimensions of Fair Work could be addressed in a particular commodity / service area and to shape commodity / service strategies.

Sustainability: can potential suppliers provide solutions to sustainability issues?

• The UIG should always be open to new ways of shaping their requirement. They should look for opportunities to shape the market. There should be an assessment of future demand of any particular commodity/service or category.  This should be based upon the knowledge and expertise within the team and on information obtained from non-team members. Engaging with potential suppliers provides an opportunity to ensure the services provided are at the forefront of those available. This should also take account of the knowledge held by other buying organisations, trade bodies and business support organisations e.g. Federation of Small Businesses and Chambers of Commerce etc.  Care should be taken to maintain competition, transparency and equal treatment of potential suppliers.

The purpose of analysing the market, is to take into account in more detail the external and internal factors affecting the commodity/service and supply. The various tools below can help you in this activity. The results should lead to the identification of opportunities and risks which will inform strategic options to consider.

Not every template listed in 1-7 below requires completion. You should consider the complexity of your commodity/service and procurement exercise to help you decide which template(s) to use.  Once your analysis is complete, consider how to use this information to inform strategic options.

All templates listed can be found under "Any documents you need are listed below" at the bottom of this page.

1. Supplier profile analysis

The supplier profile analysis tool can be used to paint a picture of the main players in the market.

2. Competitive advantage - Porter's 5 forces

Porter's 5 forces constitutes a framework which demonstrates buyers/suppliers' relative power in the market place. 

3. SWOT analysis

The SWOT Analysis examines environmental factors internal to the organisation (usually classified as Strengths or Weaknesses), and those external to the organisation (classified as Opportunities or Threats). 

4. PESTLEE analysis

The PESTLEE analysis assesses the external environment which may have an impact on your requirement.  

5. Supplier market share

The supplier market share provides an insight into the positioning of the main players within the market.  Factors such as  industry attractiveness, competitive pressure and degree of market concentration/fragmentation.

6. Understanding supplier cost drivers

The supplier cost drivers document provides:

• A checklist containing cost drivers;
• Guidance on how to complete a typical supplier cost driver example;
• Sources of information includes tips on how to obtain cost drivers.

7. Total cost of ownership

Total Cost of Ownership (TCO) is the initial acquisition cost plus ownership/operation and disposal costs. Understanding this will help in identifying areas for improvement internally within the organisation and externally with potential suppliers. The following guidance document will help you to consider the wider costs associated with the procurement of the requirement.

It is possible that the potential supplier for a contract may be another  public sector organisation.  A contract between two or more such organisations may be exempt from the Public Contracts (Scotland) Regulations 2015 and the Procurement Reform (Scotland) Act 2014.  This exemption is in place if the “buying organisation” and the “supplying organisation” are jointly controlled or if all of the following conditions are met:

• The “buying organisation” exerts control over the “supplying organisation ” similar to that which it has over its own departments;
• Where more than 80% of the activities of the “supplying organisation ” are undertaken for the “buying organisation” or other bodies controlled by it;
• Where no other organisation or person has invested direct capital in the “supplying organisation” subject to limited exceptions. See the Public Contracts (Scotland) Regulations 2015 13(2)(b) for more detail.

You should consider whether or not the commodity/service you are buying is capable of being catalogued or not.

This simple Guide to Making Content Decisions at the bottom of the Pecos Content Management page will guide the buyer in the right direction. 

If the commodity/service you are buying is to be catalogued, this electronic content must be provided for in the contract via Pecos Content Management (PCM) . 

Sometimes it is appropriate to build the ITT documents in a format where the evaluation is based on catalogue submission.  If this is the case, the Contract Notice or the invitation to confirm interest as a result of a Prior Information Notice (PIN) should detail this clearly. Further guidance is provided at the notification of contract award decision and at the develop documents stages.

The key characteristics for each sub-commodity/service can now be identified and agreed by using the Key Commodity/Service Characteristics template.

Example of Care and Support Services Service Tree (Residential Care).

If your procurement is of a Digital or ICT nature, consideration must be given to the Digital Public Services Scotland Programme. This strategy sets out the collective ambitions and national level actions at sector, cluster or organisational level.  Since this strategy was published more Current Standards, Guidelines and Recommendations have been developed as outlined within the ICT High Level Operating Model.

Further information on how to assess and manage cyber risks as part of the procurement process, including Guidance Note on Supplier Cyber Security.