The specification should be written in "performance" terms which focus on the product, function or service output required.
It builds the specification around a description of what is to be achieved rather than a fixed description of exactly how it should be done. This encourages marketplace innovation, allowing and encouraging suppliers to propose modern (including environmentally preferable) solutions.
Within a technical specification you should avoid references which may unduly favour or eliminate suppliers e.g. by asking for a specific material or goods.
You should not reference a specific make or source or to a particular process, trademark, patent, type, origin or means of production.
Do not specify "Hoover" when you mean a vacuum cleaner or "Intel" when you mean a central processing unit of a personal computer.
In exceptional circumstances such mention may be justified if:
In either of the above circumstances such mentions should be accompanied by the words "or equivalent".
Where the goods or services are intended to be used by people, the technical specifications must, except in duly justified cases, take into account accessibility criteria e.g. people with disabilities.
Technical specifications must afford equal access to bidders and must not create obstacles to competition. For more information, reference 11 (7) (8) (9) PSR2016.
An exit strategy is necessary to:
It should be a ‘front end’ activity created before the contract is signed. This may appear counterintuitive. However without a well thought out strategy (which is consistent with your overall sourcing strategy) your Organisation risks:
Having an exit strategy in place at the start of a supplier relationship means not only that your Organisation’s needs will be included into the contract, but that the supplier will have a clear road map through to contract close (this is particularly supportive for smaller business who may rely heavily on public sector contracts). The exit strategy should also include what would happen in the case of early termination and so help to ensure there will be minimum business and customer disruption if the relationship were terminated.
Please note: you cannot terminate a contract with the aim of avoiding procurement rule obligations.
Exit strategies should be reviewed annually, or when significant change occurs
There are several considerations to be made when developing an exit strategy, including:
Below suggests some factors for consideration. This is not an exhaustive list. Each contract / supplier relationship should be considered on its own merits.
An exit strategy should set forth your organisation’s service requirements when the parties are transitioning out of the relationship. These requirements may include:
The provision of parallel services for a certain period. This can be necessary for continuity of supply and helps to resolve issues before the final change over;
An obligation by the supplier to keep the same supplier team performing services during the transition period;
Confidentiality on any communications regarding the termination of the relationship.
Data privacy and security are critical. The Exit Strategy should consider provision for:
The transfer of all data belonging to your organisation, including any customer information;
An acceptable method for the supplier to destroy and remove your organisation’s proprietary information;
The supplier destroying and removing sensitive information from all media. The supplier must ensure no information is disclosed to other individuals or organisations;
The return or transfer of each party’s assets.
Strict documentation and knowledge transfer contract requirements will be advantageous. Be sure to:
Clearly state responsibilities i.e. which party owns the work performed by the supplier and which party is responsible for the transfer of ownership;
Fully document the service description for any transition period additional services. These are services required from the supplier (e.g. employee training, training new supplier personnel);
Require the supplier to provide your Organisation with copies of data, procedures, access logs, error logs, documentation and other information generated as part of providing the contract services. The supplier should also grant your organisation the right to provide this information to potential successor suppliers.
Transition, termination and timing are a key part of the financial aspects of an exit strategy. Be sure the contract:
Specifies when compensation should be paid and how much. This includes compensation for any continuing base services and transition activities;
Specifies the return of any pre-paid fees for services which have not been rendered.
An exit strategy should cover personnel issues, such as:
Ensuring supplier personnel and key resources remain on the project and committed during the transition. This ensures relevant knowledge and expertise is retained during transition;
Defining the exit-strategy team and its roles;
The treatment of employees and any obligations to inform or consult under TUPE.
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This guidance sets out the minimum administrative standards and procedures for managing medium and high-risk contracts within the Scottish public sector.
The purpose is to ensure that:
This guidance applies to:
This guidance applies post-award, from contract signature to contract close-out.
Responsible for day-to-day contract administration and record-keeping.
Key administrative responsibilities include:
Accountable for:
For medium and high-risk contracts (Routes 2 and 3), a complete contract file should be maintained.
Files must be:
Upon contract award, the following administrative actions must be completed:
For all formal contract meetings:
The contract administrator must:
Escalate unresolved or high-impact issues
More guidance on Risk Management can be found in Additional Resources
All changes must be administered formally.
The administrator must:
No informal or retrospective changes should be permitted.
For detailed guidance, please refer to the Variation/Extension/Amendments station.
Administrative controls must include:
For high-risk contracts, financial tracking should be updated regularly.
Contract administration should support:
Records must be:
The administrator should:
For detailed guidance, please refer to the Variation/Extension/Amendments station.
At contract end, the administrator must:
For detailed guidance, please refer to the Dispute Resolution / Termination / Contract Exit station.
Medium and high-risk (Route 2 and 3) contracts require:
These factors should be reflected in resource planning and workload models.
Checklist
| What you Need to Do | Points to Consider | Met? |
Administration of the contract is important
Contract administration is concerned with the mechanics of the relationship between the customer and provider.
Its importance should not be underestimated. Clear administrative procedures ensure that all parties to the contract understand who does what, when and how. | The elements that need managing are likely to include:
| |
Maintain the contract documentation. The contract will have to evolve to reflect changes in arrangements. Contract maintenance means keeping the documentation up to date and relevant to what is happening on the ground. Maintaining contract documentation is an important activity. | Establish procedures to keep contract documentation up-to-date (including how to store/archive documentation). Ensure all contract documents are consistent, and that all parties have the correct version. | |
Changes must be controlled.
Changes to services, procedures or contracts may have an effect on service delivery, performance, costs and on whether the contract represents value for money. The specification and administration of change control is an important area of contract administration. | Appropriate structures need to be in place with representatives from both customer and supplier management sides to review and authorise change requests.
Be careful that changes do not fall outside the scope of the original PCS advertisement and conflict with procurement regulations – seek advice if you are unsure.
It is particularly important that additional demands on the supplier should be carefully controlled.
Formal authorisation procedures will be required to ensure only those new requirements (that can be justified in business terms) are added to the service. | |
Make sure management understands what is happening.
Management reporting procedures ensure that information about contract problems reach those with power to act as soon as possible. | Requirements for service performance reports and management information should be built into the contract and confirmed at the tender stage.
Where possible, you should make use of your Organisation's own management information and performance measurement systems.
For many business managers a summary of the service they have received along with a note of exceptions is normally sufficient.
Information requirements may change over the life of a contract. | |
Blank rows are provided for your use e.g. to add additional checklist items.
A detailed Contract Administration Checklist document is available for you to download and use, the document can be found at the bottom of this page.
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This section of the Contract and Supplier Management process outlines a number of activities and tools to effectively manage and improve the performance of your suppliers. You must be careful not to substantially modify the contract when considering some of the following.
Contract Managers should present information in regular reports to senior managers.
prepare and issue reports summarising the management actions they have taken since the last report
identify any significant issues
detail conclusions reached
consider the consistency of their conclusions with those arising from the work of the regulatory bodies
clearly identify the nature and grounds for any concerns, and the action(s) required to secure improvement
consult suppliers on the accuracy of all reports
communicate regularly with suppliers
ensure emerging findings are discussed at an appropriate level within their organisations.
For Care & Support Services please also read Additional Guidance when Reviewing a Care and Support Service.
Contracts are awarded following a thorough evaluation process which looks at some standard elements. Your Organisation should perform periodic supplier ‘health checks' should be undertaken throughout the life of the contract to ensure standards are maintained. These checks could include:
The frequency of the checks depends on the type of contract, e.g. strategic and bottleneck contracts will be checked more frequently than collaborative and routine contracts.
Understand Contract Terms & Conditions
The purpose of Contract and Supplier Management is to ensure suppliers meet their contractual obligations and the contract requirements are successfully delivered.
It is essential that anyone engaged in managing suppliers reads and fully understands the contract's terms and conditions, otherwise they will be at a permanent disadvantage should any issues arise.
Your Organisation’s Contract Manager/Contract Management Officer should engage early in the process, from the Develop Strategy stage, and participate in the development of terms and conditions.
The full Balanced Scorecard can be used for managing and monitoring contract and supplier performance. A template for you to use can be found at the bottom of the page.
The scorecard can be issued to multiple users of the contract and responses compiled to use as a discussion point during the supplier review meetings.
The Key Performance Indicators (KPIs) can be edited to suit the commodity/service area.
KPIs provide a way to measure the four quadrants of the balanced scorecard (Quality, Cost, Sustainability and Service). KPIs help organisations understand how well they and/or their suppliers are performing against their strategic goals and objectives.
You must ensure effective contract management so that the practice of blacklisting does not occur in public contracts.
MI is used to monitor the supplier's or contract's performance and ensures management have the information to make effective strategic and operational decisions.
You must clearly define your MI requirements and communicate these to your supplier(s).
Your MI reporting arrangements must be fair and proportionate and not duplicate information already provided.
Your MI reporting approach should minimise demands on suppliers for information about the delivery of the goods/services.
You can undertake a risk assessment to help decide what the frequency and level of reporting should be. This may change/increase in certain circumstances, for example if a complaint is made about the service/delivery.
The reporting arrangements can be included in your specification and/or in the terms and conditions of the contract.
For some specific services, you should avoid duplicating information which is collected by/available from regulatory bodies. This can be achieved through the development of Memoranda of Understanding and regular discussions between the organisation and the regulatory bodies.
Sustainable Procurement outcomes, for example Fair Work Practices, must be an integral element of the contract and supplier management process. They should be included as a standard agenda item at supplier review meetings and considered alongside all other contract management matters.
It is important to ensure monitoring includes the use of any agency or sub-contractor workers throughout the duration of the contract. This will include any new members joining the workforce engaged on the contract’s delivery.
Evidence should be sought from suppliers to demonstrate compliance with agreed contract conditions. This includes what the main contractor is doing to ensure Sustainable Procurement outcomes, such as Fair Work First commitments, down the supply chain to subcontractors and to agency workers. Evidence which should be sough can include reviewing recruitment information which could include pay policy and the terms and conditions for workers involved in the delivery of the contract.
Where there are material concerns regarding a supplier’s compliance with any sustainable procurement commitments or the contractual obligations it has made, an Organisation could consider whether to undertake general sustainability audit of the contract.
You should detail what will happen if the contract is not being delivered or the agreed quality standards are not being met.
Performance issues should be addressed immediately, and escalated within the supplier organisation if not resolved promptly.
Contract Managers/Contract Management Officers should ensure the escalation process is clearly defined, understood and communicated to all stakeholders and end users.
If you find that the supplier is not delivering the agreed level of service:
There are specific contract terms and conditions that can be used appropriately to help drive and maintain contract compliance/performance.
You should incorporate these into the Terms and Conditions (T & Cs) of contract. You should understand the specific contract T & C’s, and that any incentives and sanctions considered are appropriate and legally enforceable. You must seek legal advice if in doubt as to the wording, appropriateness or legality of a proposed condition.
Incentives could include (subject to substantial modification):
To enforce a sanction sufficient evidence is required to justify the claim or action. You must therefore have clear records e.g. agreed service levels, notice periods, reminders, communications, agreements, etc.
Any enforced incentive or sanction must comply with the agreed contract terms and conditions.
Improvement opportunities can be identified by anyone engaged with the Organisation, both internally and externally.
Many improvement ideas don’t come from management, but from employees and suppliers operationally involved in the delivery of the service. These are the people who are regularly exposed to issues which may not be visible higher up in the Organisation.
Your Organisation should seek feedback and work to develop a culture where everyone is encouraged to look for and suggest operational improvements. To do so the Organisation must show that all suggestions will be considered.
Demand Management can be defined as:
“the alignment of a business’ consumption with its business requirements”
It applies to all goods and services where internal demand and consumption can be influenced to reduce costs.
Demand Management is a key aspect of aligning external resources to meet our requirements. People often think demand management is stopping people spending money. However there are a number of other ways to look at demand management without completely preventing spend. These can still provide notable savings and have a less drastic impact on the business.
Demand often comes from internal practice and processes rather than real need. As the approach is about addressing change ‘in’ an organisation the starting point will be the culture, policy and behaviours of that organisation. The organisation can also participate by:
Demand management can occur at different points in the procurement process. For example:
Demand Management, including behaviour change, represents a significant and untapped opportunity.
In the short term, this is about changing expectations; in the medium term about changing participation; and in the long term about reducing need.
There are 3 main principles of demand management:
The three strategies listed below could be independently or jointly applied.
|
Eliminate |
Is the requirement really needed? Can the consumption be stopped? e.g. cancel non-essential meetings, or stop the use of mobile phones for non-business calls |
|
Replace |
Can we use lower cost or more effective alternatives? e.g. use video-conferencing for meetings or ensure non-confidential papers are not treated as confidential waste |
|
Reduce |
Can we use less of a product / service? e.g. don’t order a monitor with every PC purchase or, schedule meetings for the same day With Demand Management you should consider:
|
There are a number of benefits to an effective Demand Management strategy. Many are driven by change in the organisation’s culture and outlook, and to how goods and services are specified and requested.
When robustly implemented across all goods and services, Demand Management drives public sector organisations to make the most efficient and effective use of procured external resources to meet the operational requirements.
The Demand Management process challenges the norms, standards, customs and practices of an organisation to a degree not usually found in other processes.
When used as a priming process for Strategic Sourcing, Demand Management can establish organisation requirements to be sourced to a very specific level. This can avoid the development of a sourcing strategy that meets over-specified operational requirements.
As a routine part of an organisation operation Demand Management can ensure the greatest possible levels of resource are directed at front line services in the public sector.
You should consider forecasting demand fluctuation management initially at the Shaping the Requirement Stage. These should be subsequently monitored and managed throughout the lifetime of the contract. Failure to do so could result in:
You can manage your costs better, and have help your suppliers have the correct levels of resources in place, by using effective demand management forecasting. Also give the supply base the opportunity to manage their costs by positioning resource and material in line with demand.
Demand forecasting should be based on considerations such as:
You should try to reduce future demand and costs by using strategies such as:
To operate effectively your suppliers must understand and manage demand. It can use this knowledge to set its resources and processes proportionately. This will ensure their service delivery is efficient and cost effective.
By understanding your historical demand you can work with your suppliers to improve efficiency and reduce costs.
To forecast future demand you must consider a combination of:
Forecasting will never be 100% accurate However these elements should provide enough information to develop forecasts which are accurate enough to accommodate demand fluctuations.
You should ensure the supplier stays in regular contact with all key stakeholders (including other suppliers). This ensures that all parties are aware of the supply/demand position, especially during periods of fluctuation.
A key element of Contract and Supplier Management is the proactive identification and management of risk. More information can be found in Risk Management.
Fraud Prevention, Detection, Monitoring and Handling
More guidance on fraud is provided on the Scottish Government Website.
Better scrutiny of payments, and a sound understanding of the contract, will quickly identify both overbilling and fraudulent activity, and allow the appropriate action to be taken. You should not rely on your supplier to interpret the contract which could then result in billing errors.
Contracts are awarded following a thorough evaluation process which looks at some standard elements. Your Organisation’s Contract Managers/Contract Management Officers should perform periodic supplier ‘health checks’. They should undertake these checks throughout the life of the contract to ensure standards are maintained. These checks could include:
The frequency of the checks depends on the type of contract, e.g. strategic and bottleneck contracts will be checked more frequently than collaborative and routine contracts.
Contract management activities must include sufficient checks to ensure suppliers are meeting their Data Protection Legislation obligations as the Processor. These checks may include audits undertaken by the controller or a third party auditor.
If obligations are not being met, organisations should take urgent remedial action with the supplier to address issues and risks.
More detailed information can be found in Additional Resources.
Good Contract and Supplier Management processes should encourage both supplier and organisational innovation. Suppliers often have innovative ideas. These ideas can improve both their own and their customers’ service, however, they are frequently blocked to progress these ideas.
Quickfire Guide
You should promote supplier innovation and added-value activity to flourish:
Embrace your suppliers as an extension of your business. Learn from their ideas and build open and trusting relationships where innovation will thrive.
Establish a culture of trust and encourage ideas from suppliers, as they often know your business better than some of your own team.
Define and share your Organisation's definition of supplier innovation. This way suppliers can understand your internal process, where they fit in and your expectations of them.
Share as much information as you can with your top suppliers. The earlier suppliers can see your product / services roadmap, the sooner they can provide ideas to improve it.
Implement a consistent governance framework. If a supplier’s idea has potential, assign an internal owner to investigate and develop this ensuring there is accountability and development continuity.
Innovation does not have to be ‘ground breaking’. Even minor service or process adjustments can bring cost and/or efficiency gains.
Encourage collaboration within the teams. Let them know some ideas will be more successful than others, but all ideas will be considered. Publicise and reward innovative contributors appropriately.
Publicise supplier innovation success stories. A brief email outlining real supplier initiated added-value and the mutual benefits will encourage others to do the same.
Consider innovation as a standard KPI and ensure innovation is on the agenda at performance reviews.
Innovation is a two-way process. Your Organisation should be equally active in exploring innovative ideas which will help your suppliers improve their performance and service delivery.
Performance Review Meetings provide both your Organisation and the supplier with an opportunity to:
The Performance Review Meeting standard agenda template can be completed by both your Organisation and the supplier in advance of the meeting. This will provide a structure to the meeting.
You should hold at least one review annually for suppliers identified under the segmentation process as requiring ‘medium level’ supplier management. Hold two review meetings for ‘high level’ suppliers.
A Review Meeting Template is available here, and a meeting agenda example is laid out below:
Quickfire Guide
This agenda can be amended to suit your personal preferences:
|
Agenda Item |
Description |
|
Introduction and Opening Remarks |
Introduce attendees. Recognise special or new guests. Provide any opening remarks that are pertinent to this meeting such as current events, organisational changes, etc. |
|
Review of Action Items |
Each Performance Management Review meeting will produce some follow up action items for your supplier, your Organisation or both. These should be documented and followed up at the next Performance Management Review meeting. |
|
Supplier Performance
|
Performance against SLA/KPIs/Scorecards should be reviewed and discussed, and any performance concerns raised. This will be a quick review if all deliverables are being achieved. Any "below plan" performance will demand more discussion and most likely recovery action plans. These plans should be managed operationally and reviewed at the next Performance Review meeting. |
|
Customer Performance
|
The supplier can raise any customer performance issues. For example these may be impacting their ability to fulfil their contractual obligations. |
|
Key Improvement Areas/Opportunities
|
All opportunities for improvement should be explored. Once identified, action plans should be agreed. Areas to be explored should include: current performance issues, cost, process, Sustainable Procurement, Corporate and Social Responsibility, innovation/value add. |
|
Supplier Presentation |
The supplier should provide a business overview, including example financial information, strategy, overarching objectives, etc. |
|
Meeting Summary and Review of Action Items |
Round up of meeting and confirm next meeting date. |
Benchmarking costs against the suppliers’ competitors is a recognised way to avoid cost ‘creep’ and ensure best value. Benchmarking can be done throughout the life of the contract. It can be used for:
You now have a manageable amount of data to go out into the market place with.
This will not cover every aspect of the potential scope of supply. You may need to add items such as bottle-neck and specialised items. The aim is to gain an estimation of the market rates.
You should inform your existing supplier that you are planning to perform a benchmarking exercise before you go out to the market place.
Benchmarking is generally an informal process. The Management Information Hub is a good source of information, as is the internet in general. You can also contact a number of suppliers directly.
It is important to ensure that the recipients of any requests understand it is a benchmarking exercise. It is not a business opportunity. The request should be simple enough for the suppliers to provide information without having to spend a great deal of time doing so.
You can now compare the results of your benchmarking exercise. For example, enter all costs into a spreadsheet to determine the price difference between your existing supplier and the market rates. You can now determine where the incumbent supplier sits against the best, worst and average market rates.
If you are happy with where the incumbent supplier’s pricing fits in comparison to market rates, this shows the supplier is competitive and no further action need be taken.
If you are not happy then invite your supplier to a meeting. Give them the opportunity to explain why they are not competitive against the current market rates. You must not divulge the competitors’ names or pricing information.
If the supplier is willing to accept their prices are not in line with market rates then this will be a cost reduction for you. If however, the supplier is unwilling to negotiate a reduction, initiate your escalation process and include as an agenda item at the next Review Meeting.
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Persuading stakeholders to implement change can be difficult. This is particularly true if there are no absolute, cast-iron guarantees to support the proposal. Therefore you must consider how to show the potential benefits of an embedded Contract & Supplier Management (CSM) model.
The guidance below and the linked templates should help you build the necessary business case / justification.
Quickfire Guide
Another approach is to consider the risks and missed opportunities of not focusing on CSM, for example:
Consequently, CSM is unlikely to be effective unless the parties move from a transactional to a relational model. This could actively encourage and develop close working relationships and resulting mutual benefit(s).
The success of the relationship between an organisation and suppliers/service providers depends on the extent to which there is:
You need to build the relationship outside of the traditional constraints of a performance-based contract. A 'we are in this together’ approach should be fostered. This will encourage open communication and maximise service and cost efficiencies.
To succeed, build on small success: when a pattern of small successes has been achieved, proposing a more ambitious CSM plan becomes less daunting. This is because you have proven results to refer to.
Instead of leaping into the unknown, it becomes the expansion of an already successful process. Initial small successes are a recognised option to create awareness and buy-in for the larger initiative. Small projects are likely to be the best way to gain the support necessary for broader, organisation-wide embedded CSM model adoption.
The selection of small project(s) is important. It should be contracts or services not in crisis and which have scope for improvement. It is even better if it is a contract or service where stakeholders have voiced concerns or expressed a desire to seek improvements.
Once the contract/service has been agreed, a small cross-functional team should be created under a nominated contract manager who will own and manage the small project.
As laid out in more detail throughout the CSM guidance, the nominated cross- functional team should:
Once the desired outcomes are agreed, your nominated contract manager should ensure maintained focus within both organisations until they have been achieved and delivered. The results should be used to demonstrate the untapped potential open to a focused CSM approach.
The Business Case Template, found at the bottom of this page contains some ideas you may wish to include and should help lay out the business case. Your Organisation may have a standard template to use.
Managing the supplier contractual relationship requires a discrete set of responsibilities and activities. As a result this should be the responsibility of a nominated member of staff. An organisation should consider how to ensure that:
These considerations should be built into the commodity/service specification and/or the terms and conditions of the contract.
Your Contract Manager should be engaged early in the process. This will ensure they engage early with stakeholders and determine the appropriate contract service level requirements and Key Performance Indicators. Service level and KPI requirements should have been included in the tender documentation.
Please go to the Roles and Responsibilities station for more information.
Determining the resource required to manage the contract portfolio/supplier base is not an exact science. Very often it is subjective.
Any organisation planning to transition Contract and Supplier Management responsibilities to an embedded CSM team, must estimate the resource required. You should invest time too realistically and pragmatically plan required resources.
Some resource planning options are laid out below.
Resource planning for a new CSM team often depends upon the judgement of an experienced manager. You should provide enough information for an experienced manager to make an initial estimation of the extent of work required i.e. to manage the volume of Leverage, Routine, Strategic and Bottleneck suppliers.
A decision may be made to start with a small selection of critical and/or problematic suppliers. Then you may gradually incorporate more contracts/suppliers with additional resource coming on board as appropriate.
The Resource Planning Tool, found at the bottom of this page, is taken from a particular Scottish public sector organisation’s successful proposal to transition from a traditional ‘let & forget’ model to a CSM model (and is indicative only). For the avoidance of doubt, this organisation absorbed the workload into the existing headcount by reallocating/re-prioritising responsibilities and eliminating non-value add activity.
Quantification / segmentation is the most accurate methodology of estimating the resource required to manage the contract / supplier portfolio. Applying this methodology allows you to allocate limited resources where they are most needed and helps target best value improvements. It is however, still an ‘estimation’ as many factors can affect the resource requirements, such as:
Please refer to the Segmentation station for guidance
For Care and Support Services processes must not duplicate those of the Care Inspectorate.
The care manager is the role which has overall responsibility for ensuring the care and support for an individual is achieving the desired outcomes.
You need to identify the strategic positioning of your contract. The Strategic Positioning Tools found in the Develop Commodity/Service station can assist you in doing this.
Regardless of how formal a commodity/service strategy is, or is not, there is always thought and decision making on:
A straightforward way of assessing the potential level of CSM required is to consider the:
The Kraljic Matrix – Supply Management Positions Tool, which can be found at the bottom of the page, allows you to record all CSM activities for each segment. There are some examples pre-populated in this document which can be deleted/amended as required and to suit your organisation.
The output from the Resource Planning Tool can be input into this tool.This document helps you segment your contract portfolio into four categories (Leverage, Strategic, Bottleneck, Routine). This will allow your organisation to record the extent of work involved in managing each category. This includes frequency of performance review meetings and frequency of Management Information, etc.
For further guidance on Segmentation, please visit the Segmentation station.
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You can award the contract once you have followed the stages outlined in the previous stations. You should also obtain the internal approvals that your organisation's governance requires.
The contract documentation should be collated and finalised to reflect the successful tenderer’s submission and agreed terms and conditions.
Where required, the documentation must be signed in duplicate by the appropriate authority levels in both the contracting and tenderer's organisations.
You should consider who you need to inform when a contract has been awarded and the information they require.
For example:
notify stakeholders and users of the contract award, providing them with: timescales; details of the contract; and any migration considerations.
If using PCS-Tender, the Contract Award must be activated on this system. This activation does not generate correspondence to the tenderers. As a result you must issue the Contract Award Notice on Public Contracts Scotland.
Please note in all cases below, "days" are calendar days and not working days. The final day must however be a working day in Scotland.
The Contract Award Notice is a public announcement of the public procurement exercise outcome.
The publication of a Contract Award Notice is mandatory for ALL regulated procurement exercises i.e. those where the estimated value is £50k or over (excluding VAT).
The Contract Award Notice must be despatched no later than 30 calendar days after the contract or framework agreement award date. This also applies when a mini competition has been held for a Framework Agreement and the value is £50k or more for goods and services.
Contract Award Notice(s) must be published on the Public Contracts Scotland (PCS) portal. Contract Award Notices published via PCS will contain all of the mandatory information required.
For Dynamic Purchasing Systems, Contract Award Notices do not need to be published for each and every award. These can be grouped together and published on a quarterly basis within 30 calendar days of quarter end.
The Contract Award Notice should not include any information which would:
When running a procurement exercise, there may be circumstances where you wish to award some lots and not others.
For example:
To support this, in Public Contracts Scotland (PCS), you have the capability to award selected lots through separate award notices.
The process in PCS is:
The Public Contract Scotland (PCS) Contracts Register module 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.
When you publish a PCS award notice an entry is automatically made in your contracts register. Your organisation will need to make the decision whether to make the contracts register publicly viewable or not.
PLEASE NOTE: if you do not use PCS for producing a contract register, you must still produce a publicly available one.
The PCS contracts register will pull through the contract value from your contract award notice. You should always be as open and transparent as possible when completing this field. This field can be manually amended but all relevant amendments have to be manually duplicated in the Scottish Procurement Information Hub (there is no integration between the two systems for manual amendments).
Even if you withhold the contract value from a contract award notice, this does not provide an exemption from the Freedom Of Information (Scotland) Act 2002 (FOISA). To withhold under FOISA, the information would have to, or be likely to cause substantial prejudice. Also 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.
Debriefing is a way of helping suppliers to improve their competitive performance, which in turn produces benefits to procuring organisations.
Unsuccessful bidders have a right to know the reasons for their rejection. Feedback should be provided in writing and it is good practice to provide face to face debriefing where possible. If this is deemed appropriate, you need to make sure enough time and resource is given to the debriefing process.
Assist bidders to improve their performance. A debriefing should cover the positive aspects of their bid and suggest areas for improvement for unsuccessful bids. Bidders can then address these issues and improve their competitiveness in future bids;
Offer unsuccessful bidders the opportunity to provide feedback to you on the tender process. This will help with continuous improvement of the process;
Establish and maintain a reputation as a fair, honest and ethical customer. This will help to ensure that high quality bidders will be encouraged to submit tenders.
You should chair the debriefing whilst their User Intelligence Group (UIG) members or end-users can provide guidance and/or assistance.
Where a formal debriefing meeting is deemed appropriate, this may involve representatives from both operational areas of the process and procurement professionals. This will ensure the debriefing is carried out by experienced and fully trained personnel. You should ensure that technical/operational representatives understand their role in the debriefing and follow these guidelines:
Quickfire Guide
A face-to-face debriefing meeting is not essential in cases where the unsuccessful tenderer has already been provided with written feedback. However this may help unsuccessful tenderers improve their competitive performance for the future.
A debriefing must take place within 30 days of the request by a bidder for further information on reasons as to why their bid was unsuccessful.
The Evaluation Matrix is a tool that can be used to evaluate submitted bids and identify the one that provides the best value for money. The matrix allows you to score and weight supplier’s responses against the predefined award criteria.
Whilst the evaluation is a key part of determining the outcome of your procurement exercise, you must remember that the outcome of any evaluation is ultimately dependent on the award criteria and weightings that you choose. Therefore, it is key that this criteria accurately describes your need and any minimum requirements that stakeholders need.
The workbook is split into two main worksheets – price and quality criteria. The price criteria worksheet considers the whole life cost of the project in terms of acquisition, operating and end of life costs.
To maintain the integrity of the process, it is best practice that members of the evaluation panel do not assess both the quality/technical elements and the commercial elements of the tender.
The model was developed in conjunction with statisticians and has been confirmed as fit for purpose in most procurement exercises. However, as you will be aware, the Procurement Journey does not cover works contracts and we would not recommend it for this use. If you require any further information on the evaluation of works contracts, you should consult the Construction Procurement Handbook.
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You should complete the price/commercial evaluation of tenders.
To enable an easier comparison, you should include a price schedule (or use the commercial envelope if PCS-Tender is being used). This should include a breakdown of the product/service areas for bidders to complete.
The evaluation should identify and compare all the costs and benefits' which can be quantified in monetary terms.
In order to achieve the Most Economically Advantageous Tender (MEAT) you can select from several costing models to support your procurement exercise. This ensures that the evaluation is more than simply a “price for price” comparison.
It is important to differentiate between whole life costing and lifecycle costing. Further helpful information can be found in Additional Resources.
You] may find the Supplier Cost Drivers Checklist useful when developing a pricing schedule. This document can be found at the bottom of the page.
Price/financial evaluation criteria should include:
•Whole life cost comparisons
•Quantifiable financial benefits arising from the technical evaluation (e.g. speed, fuel or electricity consumption, coverage, shelf life etc.)
•Fixed or variable pricing
•Cost of components, spare parts, consumables and servicing
•Risk analysis and financial appraisal (for major contracts of strategic importance, especially those of an innovative nature
Focuses on social and environmental impact rather than cost.
Life cycle impacts help the user identify and assess impacts. For example, it may help to focus attention on the disposal phase before the procurement is carried out. This would allow your organisation to build end-of-life management requirements into its performance clauses for successful contractors and its own internal management procedures
Every product and service has a ‘life cycle’ or number of stages it goes through from:
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