Route 3 - Develop Strategy - Profiling the Commodity/Service - Contract Status & Spend Analysis

Current Contract Status

You should work with the UIG to review and understand the current contractual situation for the commodity/service to determine if there will be any issues in relation to the need to phase in new contracts over a period of time, or to investigate whether early termination of existing contracts is both possible and desirable.

You should collate details of the existing contract(s), such as the product specification, end users and other information which can be incorporated into the analysis of key commodity/service characteristics as described in the next section.

You may wish to use the Current Contract Status Template to record this information.

Spend Analysis

A detailed understanding of the current spends and likely future requirements of participating organisations are key to commodity/service strategy development. An organisation should determine what resources are available for delivery of the service. Financial planning is essential to ensure that service specifications are realistic in specifying requirements and outcomes which can be delivered within the available budget and should be informed by an organisation’s analysis and benchmarking of costs. An organisation should consider what funding it can commit to the delivery of a service and for what period of time.

[For Care and Support Services in particular, consideration should be given to the anticipated size and shape of service contracts in light of the promotion of self-directed support and any growth in direct payments.]

To assist with spend analysis many Scottish public sector organisations can access information on historical commodity/service spend via The Hub, which contains many pre-defined reports and data that can be exported into MS Excel format. The data in the Hub is not at line-item level. This means that detailed spend information will still need to be obtained from suppliers, or where available, from purchase order systems. The Hub can be used to identify possible transactional savings and collaborative opportunities.

Some suggested areas for analysis are:

  • Total Expenditure and Volume
  • Expenditure by Commodity/Service and Sub-Commodity/Service
  • Expenditure by Division or Department or geography
  • Expenditure by Supplier
  • Future Demand projections where possible
  • Collaborative Opportunities
  • Benchmarking
  • Profile of suppliers (large, SME etc.)

Spend Analysis Example as generated using information from The Hub.

It is good practice to ensure that suppliers are contractually required to provide line item spend details as part of the contract to support

  • benefits analysis
  • contract and supplier management
  • supplier development
  • future procurement activities/renewals

In addition to Spend Analysis, an organisation should review the existing arrangement for delivering a service with a view to:

  • identifying if and how the service needs to change in order to meet individual needs and intended outcomes;

  • considering afresh the application of EU law to the organisation's existing arrangements and future proposals; and

  • evaluating existing arrangements for delivering the service against best value principles.

Evaluating existing arrangements for delivering the service against best value principles will require an organisation to consider:

  • whether the service is effective and of good quality;

  • what it costs and whether it is cost-efficient;

  • whether it promotes equal opportunities; and

  • whether it contributes to sustainable development.

 

Organisations may access the contracts register for their organisation to assist in evaluating existing arrangements, including contract value.

The Contracts Register module in PCS provides the facility for buying organisations to operate a private register of all contracts they have in place and a public register of these contracts to meet the obligations of Section 35 of the Procurement Reform Act (Scotland) 2014.

 

It is important to note that the contracts register will pull through the contract value from the contract award notice. You should always be to be as open and transparent as possible when completing this field. This field can be manually amended but please be aware that all relevant amendments have to be manually duplicated in the Scottish Procurement Information Hub as there is no integration between the two systems for manual amendments.

Regulation 51(6) does allow a contracting authority to withhold from publication information on the contract award or the conclusion of the framework agreement where the release of the information:

(a) would impede law enforcement or otherwise be contrary to the public interest;

(b) would prejudice the commercial interests of any person;

(c) might prejudice fair competition between economic operators.

So, if relying on (b) you would need to be able to demonstrate that the commercial interests of the company concerned would definitely be prejudiced by the release of this information.

You should bear in mind, however, that even if you withhold the contract value from a contract award notice, this does not provide cover from Freedom Of Information (Scotland) Act 2002 (FOISA), where the equivalent test is set much higher - to withhold under FOISA, the release would have to, or be likely to cause substantial prejudice, and the public interest in withholding the information would have to outweigh the public interest in its release.

Detailed contracts register user guidance can be found in PCS.

PLEASE NOTE:  if you do not use PCS for producing a contract register, you still must produce a publicly available one.

 

[For Care and Support Services, an organisation should assess whether the service has met specified key performance indicators and other contractual requirements previously. It should seek feedback from people who use services and their carers and review other information relating to the quality of the service, including information from contract management and service review and information from the regulatory bodies, including any complaints about the service.

It is important to consider the Specific Considerations and Rules for Care and Support Services Contracts.]

You should work with the UIG to make an assessment of future demand for the commodity/service, based upon the knowledge and expertise within the team and upon information obtained from communications with non-team members.

Any documents you need are listed below:

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