Contract and Supplier Management

The purpose of Contract and Supplier Management is to work closely with suppliers and internal customers to:

  • minimise the total cost of ownership and
  • maximise supply chain efficiencies throughout the life of the contract.

Contract and Supplier Management should result in contract procedure and process improvements.  It should also increase Procurement Function knowledge and experience, which can then be used to benefit future contracts.  This can be done by:

Relationships

developing and managing constructive and transparent relationships with suppliers

Execution

ensuring the contract is successfully executed.  Includes meeting all special conditions relating to the performance of the contract which may cover economic, innovation-related, environmental, social or employment-related conditions

Value for money

maximising value for money from suppliers and contracts

Monitoring & improvement

providing a formalised system of monitoring, managing and continuously improving the supplier and the Organisation’s performance against the contract

Roles and responsibilities

ensuring that all parties recognise and understand their contractual roles and responsibilities

Compliance

monitoring overall compliance to Key Performance Indicators and Service Level Agreements.  Implementing improvement plans in the event of underperformance.  Leveraging supplier expertise in pursuit of cost and efficiency gains

Improved benefits

realising additional savings and benefits and sharing them appropriately

Supply Chain

effectively managing the prompt payment of the supply chain

Innovation

providing a focus for development of initiatives and innovations

Continuous improvement

driving continuous improvement

Lessons learned

identifying lessons learned to inform future contract terms or strategies

Efficiency

developing supplier relationships to maximise efficiency.  Collaborate towards common goals and reduce waste, environmental or social risks

Strategic goals

support the achievement of strategic goals, such as attracting Community Benefits through the contract

Sustainable procurement

monitoring Sustainable Procurement benefits through the life of the contract and ensuring that targets are met

Community benefits

monitoring Community Benefits achieved vs anticipated

Care should also be taken to manage the risks to changes in contracts e.g. you may require to retender if there is substantial modification.  

Vision

Organisations should use the four quadrants of the balanced scorecard in a consistent manner. This will allow measurement of a supplier’s performance across all organisations and / or sectors using that supplier.

Contract and Supplier Management should:

  • ensure that the service/contract is delivered to the required standards
  • provides value for money;
  • proactively identify and manage any risks which may impact on a supplier’s service delivery / fulfilment of the contract requirements;
  • improve and develop contract and supplier performance across organisations, sectors and nationally. A consistent approach will maximise efficiencies and promote adding value across the supply base;
  • appropriately influence supplier activity and decisions, improving value for money, over and above cost savings;
  • ensure the contract is effectively administered, for example from a change management perspective.

You should frequently aim to improve your own and supply base performance by various techniques.

Continuous Improvement

There are a number of formal and informal continuous improvement methods. These range from: full continuous improvement programmes; to organisational collaboration; and improved internal and external communication.

One of the key continuous improvement tools used in the Scottish Public Sector is the Procurement and Commercial Improvement Programme (PCIP).  This is designed to drive forward best practice and develop procurement activity.

Contract and Supplier Management can be considered successful when:

  • the arrangements for service delivery continue to be satisfactory to both parties, and the expected business benefits and value for money are being achieved or exceeded;
  • the supplier is efficient, co-operative and responsive;
  • the Organisation understands its obligations under the contract;
  • there are no surprises;
  • there are no disputes;
  • professional and objective discussions over changes and issues are straightforward and easily managed;
  • efficiencies are being realised;
  • the Organisation’s procurement department contract and market knowledge improves, and benefits future contracts.

Definition and Importance

Definition

Contract Management and Supplier Management differ.

Supplier Management refers to activities across a supplier’s whole portfolio of contracts. These activities are normally more strategic, longer term activities. Some examples could be:

Contract Management applies to the specific contract for the good(s) or service(s) being procured. For example:

However, although different, Contract Management and Supplier Management are linked. It is very difficult to perform effective Supplier Management if basic Contract Management disciplines are not in place. It would be difficult to discuss strategic partnerships, innovation or joint ventures if you do not understand the supplier's contract details. You need to understand how the supplier is performing day to day.

Effective Contract Management is therefore necessary for successful Supplier Management

Importance of Contract Management at Board/Senior Management Level

An effective Contract Management strategy should be a high priority for Chief Financial Officers (CFOs) or Chief Operating Officers (Accounting Officers) and Senior Management Teams.

Effective contract management is necessary for an efficient and compliant business. Contracts must be managed: especially those which deliver services, provide infrastructure or third-party essentials.

Central functions of an Organisation’s Contract Management strategy should include:

  • complying with corporate governance regulations;
  • managing risk;
  • eliminating or reducing cost (not by impacting supply chain efficiency or profit);
  • maximising revenue streams.

Managing the contract information, obligations and the contract life-cycle are critical to meeting compliance regulations. This means that the entire process needs to be sponsored at an executive level. This includes:

  • contract creation;
  • clarity of final agreement;
  • electronic contract management system; and
  • integration of contract data with back-end systems and contract performance reporting.

The above need to be rolled-out to your entire organisation (for at least the most critical/high impact contracts).

Robust Contract Management will reduce risk to your Organisation. This includes issues such as Conflicts of Interest and Fraud.

Your Organisation must consider these areas as a vital part of its governance. You must ensure all appropriate measures are taken to prevent, identify and remedy conflicts of interest and include measures to combat fraud, throughout the life of the contract.

Contract Management for Joint Procurements

If entering a joint procurement exercise with one or more public sector organisation, you must have already agreed the legal status and requirements of such an exercise.

A “lead” authority may have been agreed at strategy stage.  Legally they are responsible for forming the contract with the awarded supplier(s).

Alternatively a truly “joint” exercise may be initiated.  Here procurement conduct is  carried out in the joint name(s) of the participating organisations. 

In either case, the organisations each remain responsible for meeting their contractual obligations.

Where you have determined only part of the procurement will operate as a joint exercise, the organisations will be jointly responsible for those activity areas declared  as joint. Each organisation will retain sole responsibility for the activities carried out on its own behalf.

All of the above factors determine the subsequent approach to contract management. Although considered at Strategy Development stage, when deciding subsequent practical considerations these must remain a factor when determining the operational approach such as:

  • who is responsible for contract management;
  • how Key Performance Indicators (KPIs) will be managed and communicated; and
  • the reporting / communication network  needed between your organisations and the supplier(s). 

Benefits

Both you and the supplier should be motivated and enabled to deliver additional value. This should be done within legal limits and over and above that specified in the original contract, e.g. not simply extending the expenditure. The process should deliver benefits such as:

Routes of engagement

provide formal routes of engagement at different levels of management. This allows opportunities for improvement at senior levels

Supply costs

ensure supply costs are contained and minimised, and that opportunities for improving cost effectiveness and efficiencies are explored and progressed e.g. packaging, service level definition

Deliver business needs

proactively ensure that the business needs under the contract are delivered.  Ensure both customer and supplier’s obligations are understood and managed. Reduce reactive ‘incident resolution activity’ to minimise the cost of failure and of managing the relationship

Issue resolution

promote proactive issue resolution.  Ensure clear escalation paths exist within both organisations

Standardisation

Use a standardised approach for a number of suppliers/customers.  This will embed operational efficiency, consistency and quality

Consistency

limit the number of people involved. This ensures process consistency and communication. It ensures the right people are involved in the right activities at the right time with the right information

Improvements

encourage the supplier to improve their product or service in ways which provide additional value to the customer and to future customers.  Promote efficiencies within both organisations which will develop the skills of the employees and help the supplier’s staff to deliver a better service.

Data Protection

Organisations should build into their contract management activities sufficient checks.

This includes ensuring suppliers are meeting their Data Protection Legislation obligations. If these obligations are not being met, you should take urgent remedial action with the supplier to address issues and risks.

More detailed information can be found in Additional Resources.

Consideration must also be given to Planning, Sustainable Procurement and Risk Management throughout this stage of the Procurement Journey.

Contract Mobilisation and Implementation

This section outlines the process and activities involved when implementing a new contract.  This is to ensure:

  • supplier(s) have all the information they require to plan user’s  migration  to the new contract
  • Organisations have all the information they require e.g. suppliers’ contact details, information on the goods/services available from the contract
  • continuity of supply

Contract implementation consists of two distinct phases:

Migration

the movement of organisations to a new contract post 'go-live'

Mobilisation

the process of moving from contract award to 'go-live', i.e. the point when a user can actually buy from the contract

NB Some steps in the process may be done at the same time.

This mobilisation process is a guide to help plan activities between contract award and go live. The timescales for each of the stages should be amended to reflect your own specific procurement exercise.

Consideration must also be given to Planning, Sustainable Procurement and Risk Management throughout this stage of the Procurement Journey.

The Contract Implementation Plan document listed below will assist you in Framework Agreement / Contracts, Roles and Responsibilities, Framework Agreements / Contract Management Strategy and how customers can engage. 

Any documents you need are listed below

Contract Award

Before proceeding with your Contract Award you must ensure you have received, reviewed and approved the most up-to-date supporting documents referred to in the selection stage response e.g. certificates.

You should now be at a stage where you have identified the successful tenderer(s). From a fraud awareness perspective, the following checks should be made before progressing to the next stage.

Checklist

Checklist

Contract Award Readiness Checklist

Before a Procurement Officer awards a contract they should check the following points:

Action

Checked?

Who was involved in the tender award process?  Have there been any changes in staff from those involved during the tender evaluation?

 

Did any of the tenderers drop out of the process and decide not to proceed with the tender?  Consider if an unknown agreement was made.

 

Review the list of proposed suppliers/sub-contractors to be used by the successful bidder?  Did these organisations also bid directly for the tender exercise?  Such circumstances can lead to a pre-determined outcome as it would be irrelevant who was awarded the work.  This may identify cartel operating.

 

 

 

 

 

Blank rows are provided for your use e.g. to add additional checklist items.

Contract Award Recommendation Report

You should prepare a Contract Award recommendation report.  This should be endorsed by the User Intelligence Group (UIG) prior to receiving approval to proceed by the appropriate authority level within your Organisation.

Quickfire Guide

Quickfire Guide

Recommendation Report Contents

The report should contain reference to the following:

  • Summary of the process to date

  • Ensure any decisions for supplier disqualification have been fully documented and that the paperwork is available for inspection

  • Recommendation of award & request for approval

  • Selection Stage evaluation results (if not contained within previous report)

  • Technical & commercial evaluation (including any whole life costing) together with details of any clarifications conducted benefits and savings available

  • Details of any risks still present and mitigation plans

  • Sustainability considerations (life-cycle costing, social, economic and environmental)

  • Cyber Security Considerations

  • Considerations in relation to Community Benefits in procurement exercises equal or greater than £4M

  • Details on how the tender outcome will meet the requirements identified in the Commodity/Service Strategy

Once you have obtained approval you can notify both the successful and unsuccessful tenderers of the outcome, and they should be notified as soon as possible.

Information provided to tenderers must, where applicable, include the grounds for any decision:

Consideration must also be given to Planning, Sustainable Procurement and Risk Management throughout this stage of the Procurement Journey.

Remedies

Remedies provide legal solutions to bidders/potential suppliers as a result of procurement law breaches by public bodies or utilities.

This includes:

  • stopping entering into a contract or concluding a framework agreement if a court proceeding notice has been issued and served
  • changes to remedies/penalties for the most serious breaches of the procurement rules.  This includes:
    • ineffectiveness orders (orders which cancel a contract or framework agreement)
    • shortening the duration of a contract or framework agreement
    • imposing a financial penalty on the public body concerned
    • time limit changes for bringing court proceedings

Further information can be found in part 3 of the Public Contract (Regulations) 2015. Alternatively, guidance and advice can be sought from your organisations legal department. 

Pre-Contract Award Checklist:

  • Have you received the most up-to-date supporting documents referred to in the selection stage response e.g. certificates?
  • Was the Standstill Notice sent to all tenderers?
  • Were there any candidates concerned and if so was the Standstill Notice sent to them?
  • Has the standstill period actually passed?
  • Were any concerned tenderers or candidates not notified electronically? If so, 15 day standstill applies.

The contract documentation should be collated and finalised to reflect the successful tenderer’s submission and agreed terms and conditions. The documentation must be signed in duplicate by the appropriate authority levels in both the contracting and tenderer's organisations.

It is important to include the Fair Work practice commitments from the successful tenderer’s bid as standard Contract & Supplier Management criteria in the contract terms, including any agency or sub-contractor workers.

 

It is also important to include terms, which will apply to any new members to the workforce during the delivery of the contract.

You must consider who you need to inform when a contract has been awarded and the information they will require e.g. notify stakeholders and users of the contract award providing them with timescales, details of the contract and any migration considerations. Many organisations have a governance process which requires internal approval to be obtained before the contract is awarded to a supplier.

If utilising PCS-Tender, the Contract Award must be activated on the system. Please note that this does not generate correspondence to the tenderers and this should still be issued by the Procurement Officer.

The Contract Award Notice must now be created on PCS 

 

Clarification

This section provides guidance on how to conduct post tender clarifications and negotiation, where appropriate.

It is important that any discussions at this stage are fully documented.

Tender Clarifications

The objective at the clarification stage is to clarify the tenders as submitted.

Tender, or bid clarifications may become necessary during the evaluation of tenders. For example, where there are aspects of the bids that are unclear or contain minor errors.

You should consider whether an aspect of a bid seems ambiguous it might be prudent to request clarification.  


For example:

If the tender has asked for services to be completed daily and a bidder responds that the services will be completed seven times per week, you should seek clarification that the services are indeed completed once per day.


Clarification may also be sought from bidders on matters of quality performance or particular terms and conditions of contracts.

In seeking clarification, all communications with bidders must be properly recorded so that an audit trail is maintained. If PCS-Tender is being utilised, clarifications  can be recorded on the system in the messaging area.

Negotiations in relation to price, essential aspects of the tender or other areas where bid improvements may be possible must not take place as part of the clarification process.

You should give all bidders who meet the tender requirements the same opportunity to engage in tender/bid clarification. You must avoid unfairness or the impression of unfairness to bidders.

Before awarding the contract you should ensure you receive the most up-to-date supporting documents referred to in the selection stage response e.g. certificates.

Post-Tender Negotiation (PTN), where it is practiced by an organisation, should be handled as a separate exercise from Tender Clarification.

Points to Consider

You should examine tenders to ensure bidders:

  • are not making fradulent claims

  • have delivered similar types of work, if they have claimed to do so.

In doing so the following points should be considered:

Legitimacy

Are the claims made in the tender submissions legitimate and verifiable?

Scope

If bidders are inexperienced in the type of work being tendered, tenders may appear excessively high or abnormally low. In both cases you should ensure that suppliers have understood the scope of the requirement

Interference

Have there been any perceived or obvious attempts to influence/interfere with the process?

Price discrepancies

Are there similar tenders with a large price discrepancy between different bidders?  This could suggest collusion.  Are there tenders with large price discrepancies from bidders who have worked in the same industry for some time? This could again suggest collusion.

Exclusions

Was anyone involved who should have been excluded as part of the selection process?

Conflict of Interest

Should a conflict of interest have been identified earlier in the process? Have conflict of interest declarations been examined and ratified?

Tone

Read and digest the tone of emails. Do they appear over friendly or allude to additional meetings either professionally or socially? Information is often exchanged during a visit or a social event: you should always maintain an audit trail of all correspondence

Submission

Were all tenders submitted on time and delivered in the prescribed manner? Examples of tenders being sent via a person within the tendering organisation could constitute a breach of protocol and should be examined

Late tenders

Were late tenders accepted and if so was there a legitimate reason?

Abnormally Low Tenders

Where tenders appear abnormally low for the offered supplies and services, you are required to clarify the price or costs proposed..

These clarifications may relate, in particular, to the following:

  • the cost of the manufacturing process of the goods provided
  • the proposed technical solutions or any exceptionally favourable conditions available to the bidders
  • the originality of the supplies or services proposed by the bidders
  • the bidder's compliance with applicable obligations in environmental, social or labour law
  • the bidder's subcontracting arrangements
  • whether the price or costs take into account the grant of subsidies

Note: if it is found that the tender is abnormally low due to an environmental, social or employment law obligation breach the tender MUST be rejected.

Post Tender Negotiation

Post Tender Negotiation (PTN) should not be confused with 'tender' or 'bid clarification'.

Tender clarification is contact between the buyers and the bidder(s) to clarify aspects of the tender which are ambiguous or irregular.

PTN may be used to refine and improve bids from the preferred supplier(s) This is to ensure that prices, delivery or associated terms of the contract are competitive.  PTN is undertaken in open and restricted procedures as part of a competitive tendering process.

The potential areas for negotiation will differ for every contract but typical topics might be:

  • the terms of payment
  • quality of goods or services
  • supply and cost of spare parts
  • earlier delivery or completion dates
  • warranties and guarantees
  • documentation requirements
  • expediting and inspection procedures
  • maintenance and support
  • repair or after sales service
  • compensation for failure to meet specified requirements (e.g. of delivery, quality etc.)
  • Sustainable Procurement
  • possible Community Benefits
  • procedures for remedial action for unsatisfactory service

The list is not meant to be exhaustive.

Quickfire Guide

Quickfire Guide

Post Tender Negotiation

Before engaging in PTN, the following criteria must be met:

  • there must be a considered and soundly-based prospect of improving value for money
  • it must be in line with your internal governance and approval policies
  • trained and experienced purchasing staff must conduct negotiations
  • the negotiations must be fully documented, so that there is a clear audit trail.

A clear audit trail must be available so that it can be seen that the PTN was conducted in a fair manner.  The records should show:

  • the justification for PTN
  • the approval for PTN (at a suitably senior level of management)
  • the aim of the negotiation
  • the precise record of all exchanges, written and verbal
  • the approval for the award of contract

PTN must not:

Trade suppliers against each other

become any form of 'Dutch Auction': unfairly trading off one bidder against another by using the lowest tender to seek a reduction in costs from the other bidders.

Distort competition

allowing a bidder a chance to improve its offer.

Create bias

make changes which would result in a contract being awarded on terms more favourable to a particular bidder.

Adjust the specification

accept reduced prices achieved by adjusting the specification in a manner more favourable to a particular bidder. There is a risk that such an adjustment could have led to a different outcome in the competition even if the price was reduced commensurately.

Be used automatically

be used in all procurements.

 

When carried out in an atmosphere of openness and mutual trust negotiations can strengthen relationships with suppliers.

PTN must be a controlled and documented process.

The activities at this stage must be undertaken in a way that supports the Principles of Procurement.

Consideration must also be given to Planning, Sustainable Procurement and Risk Management throughout this stage of the Procurement Journey.

Any documents you need are listed below

Negotiation Process

(file type: doc)

Evaluation

The Freedom of Information Act (Scotland) 2002 has led to an increase in the amount of tender evaluation and contract award documentation being publicly released. It is your responsibility to ensure any procurement process can withstand scrutiny.

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

It is the responsibility of your Organisation to make sure that these requirements are met.

The tender evaluation criteria must be disclosed to tenderers. The assessment must be clear and robust, providing a full justification and audit trail for the resulting award decision.

Consideration must also be given to Planning, Sustainable Procurement and Risk Management throughout this stage of the Journey.

Issue Documents

This section provides guidance about the tender stage of the procurement process and the necessary documentation.

Timescales for each procedure differ and are outlined in their respective stations.

Quickfire Guide

Quickfire Guide

Issuing Documents Criteria

Access to the tender Procurement Documents must be:

  • On the internet;
  • Unrestricted;  
  • With full direct access;
  • Free of charge.

.  These documents must be accessible from the date of publication of a Contract Notice.

For the Restricted Procedure only suppliers who have passed the procedure selection stage will be allowed to tender.

As with all aspects of the Procurement Journey, the activities at this stage must be carried out in a carefully managed manner that supports the Principles of Procurement

It is your responsibility to ensure the above requirements are met.

Guidance on conduct is therefore contained within the subsequent Issue Documents stations.

Consideration must also be given to Planning, Sustainable Procurement and Risk Management throughout the following stages of the Journey.

Develop Documents

This section of the Procurement Journey provides guidance on the following:

If you use Public Contracts Scotland (PCS)

If you decide to use the online SPD (Scotland) Module on PCS (the Module), the selection and exclusion criteria will need to be included  i.e. not in the Contract Notice. 

The default exclusion criteria required for a process valued equal to or above the threshold is provided automatically in the Module. You can choose the selection criteria relevant to the procurement exercise you are conducting.

Care must be taken to ensure consistency between the ITT and the Contract Notice.  If at any point in your procurement process you identify the need to vary from the Contract Notice you may need to cancel the existing notice and republish (which could result in new suppliers coming forward).

If You Use PCS-T

It is necessary to have all of the above documentation created on PCS-Tender, where it is used, before preparing the Contract Notice and advertising requirement on PCS.

Checklist

Checklist

Information to Include in your Tender

This provides a list of documents that can be included in your tender.

Confidentiality

You should not disclose information provided by bidders that has been highlighted as confidential.  This could include but is not limited to technical or trade secrets and the confidential aspects of tenders.

You may wish to consider adding a requirement to ensure your organisation’s confidential information is protected throughout the procurement process.

Fair Work Practices

It is helpful for you to highlight to the market at an early stage any contract requirements.  This includes your approach to addressing Fair Work practices in the procurement exercise. This should be included in the procurement documents, which invite suppliers to participate in the procurement exercise.

The Example Fair Work statements for procurement documents will help you to inform the market.

Data Protection

Organisations should ensure that:

More detailed information can be found in Additional Resources.

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 also consider the guidance within SPPN 02/2020.

The Cyber Security Procurement Support Tool is no longer in use, and the Scottish Government instead advises that organisations implement appropriate cyber assurance mechanisms into their procurement processes.

If you have any questions, please contact:  cyberresilience@gov.scot

Consideration must also be given to Planning, Sustainable Procurement and Risk Management throughout this stage of the Journey.

Route 3 - Develop Strategy

This part of the Procurement Journey is to help you develop commodity/service strategies.

A commodity/service strategy is always required for Route 3 procurement exercises.

If you are unable to estimate the value of a contract that contract will be explicitly made subject to the procurement rules.

The commodity/service strategy should be proportionate to the risk, value and strategic importance of the commodity/service to the Organisation. Consideration must also be given to Planning, Sustainable Procurement (including Fair Work Practices and Climate Change considerations) and Risk Management.

A commodity/service strategy is different from a Procurement Strategy. The Procurement Strategy is a mandatory legislative requirement under The Procurement Reform (Scotland) Act 2014 for an Organisation which estimate the value of its regulated procurement will be equal to or greater than £5,000,000 (excluding VAT) in one year.

Quickfire Guide

Quickfire Guide

Sign Off Points

There are natural break points within the Procurement Journey that can be used as review points for sign off and approval to proceed to the next stage of the process.

Suggested review and sign off points are:

Throughout the Procurement Journey, you will see reference to these sign off points at the relevant sections, as well as documents/templates for your use.  Any review and agreement to the project plan should be in line with your organisation's governance arrangements.

The individual stations under Develop Commodity/Service Strategy provide guidance to assist you in completing the Develop Strategy template at the bottom of this page.

You do not need to use all of the elements contained in this template for your strategy: use the areas which are relevant to your specific procurement exercise.  To save this template in a version that you can edit yourself, click on the template hyperlink below, right mouse click over the "Open File" link and select the option "Save Target As".

Further information on Procurement Strategy requirements is available in Additional Resources.

What If You Don't Use PCS to Publish Your Contract Register?

When developing your commodity/service strategy, you should access the contracts register for your organisation.  This will assist in evaluating existing contract arrangements, including contract value.

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

If you do not use PCS for producing a contract register, you still must produce a publicly available one.

What if You Use PCS-Tender?

If using PCS-Tender, the Buyer should upload the appropriate slides to the appropriate task within PCS-Tender.

Data Protection Regulation (DPR)

Organisations should determine if data processing activities are relevant to your procurement exercise.

Contracts that are currently subject to the Data Protection Act 1998 are also likely to be subject to DPR.

Organisations must ensure:

  • current and future procurement exercises are compliant with DPR.  This includes contracts that began before the legislation came into force
  • all relevant procurement documents make reference to the new legislation.

More detailed information on DPR can be found in Additional Resources

Freedom of Information

Please note that if you withhold the contract value from a contract award notice this information may still be requested from your organisation via the Freedom Of Information (Scotland) Act 2002 (FOISA).

The FOISA equivalent test is set much higher than the Contracts Register i.e. publication would have to, or be likely to:

  • cause substantial prejudice, and
  • the impact to public interest in withholding the information would have to outweigh the public interest in releasing it.

Detailed contracts register user guidance can be found in PCS.

Care and Support Services

For Care and Support Services procurements, Buyers must use Route 3 Develop Strategy stations and sub-stations to develop their service strategy and plan their approach to the procurement. 

Any documents you need are listed below

Project Plan

(file type: xls)

Route 3 Introduction

Route 3 is designed for use by Procurement Officers.  If this does not apply to you, please contact your Procurement Function or Centre of Expertise.

This route of the Procurement Journey provides guidance for regulated procurements for goods and services at the GPA procurement threshold and above.  

Route 3 does not apply to construction (works) or contracts that cover utilities e.g. running tramways. Please refer to the Construction Handbook for guidance.

Contract Notice, Procurement Documents and Contract Award Notice

Contract Notice 

Contract Notices must be used to advertise all Route 3 procedures. Exceptions to this include:

  • use of the negotiated procedure without prior publication (only available in strictly defined and exceptional circumstances)
  • a defined list of Care and Support Services contracts between £50,000 and the light touch regime theshold

The Contract Notice must contain the minimum and specific requirements for your procurement exercise.

Indicative Budget

You may choose to:

  • indicate the available budget for delivering the service in question;
  • specify the outcomes desired
  • invite providers to submit proposals for achieving the outcomes within the resources available.

Stating an indicative budget ensures that bidders' tenders for delivering the service are affordable. This may be appropriate if, for example, a procurement exercise fails and the organisation moves to negotiation with suppliers.

Establishing a Timetable for the Procurement Process

This is particularly important if there is an expectation that suppliers will submit consortia bids to allow discussions between suppliers to take place.

With the exception of the scenarios stated in Contract Notice section above, all Contract Notices must be published on Public Contracts Scotland (PCS). 

PCS is the national advertising portal which provides suppliers with free access to contract opportunities. It guides you:

  • through the process of creating a Notice on its website
  • automatically creates a Notice on the Find a Tender Service

If using PCS-T or the SPD (Scotland) word document,  you must set out the specific requirements and minimum standards for your procurement.  These must be relevant and proportionate and included in your Contract Notice. This is not necessary if using the online SPD (Scotland) Module on PCS as the relevant information is contained within this module.

If Using OJEU/TED:

If your procurement was advertised before 11 p.m. on 31 December 2020 (or is a call off from a Framework Agreement or a Dynamic Purchasing System that commenced before this date) you will receive a PCS alert after you have submitted the Contract Notice for publication on PCS.  You will also receive a separate mail from Tenders Electronic Daily (TED) with your temporary OJEU reference number.

Once your Notice is published in the OJEU, TED will send you a permanent OJEU publication number.  You must retrospectively include your online SPD (Scotland) with this permanent OJEU number if using the PCS Module.

If Using FTS:

If your procurement was advertised after 11 p.m. on 31 December 2020 you will receive an FTS email after you have submitted the Contract Notice for publication on PCS. 

 

Your Contract Notice must contain details of how bidders can access your procurement documentation.

From the date you publish your Notice you must make your Procurement Documents available:

  • on the internet;
  • in unrestricted and full direct access form;
  • free of charge

The Regulations define ‘procurement documents’ very widely.  This includes all documents related to the procurement i.e. including technical specifications, terms and conditions and tender documents to be used at subsequent stages

In practical terms, it is not always possible to have all documents available at the start of your procurement exercise.   Only in an Open Procedure are you required to have  the ITT available from the outset.  For all other procedures you must provide sufficiently precise information.  This will allow bidders to understand the nature and scope of your requirement and decide whether to request to participate.

PCS-T Publication

Procurement documents must not be published in PCS-T until you have received your publication reference number from FTS.

The procurement documents should be published in PCS-T on the same day of whichever of the above events occurs first.

Contract Award 

Contract Award Readiness Checklist

Before a Procurement Officer awards a contract they should check the following points:

Action

Checked?

Who was involved in the tender award process?  Have there been any changes in staff from those involved during the tender evaluation?

 

Did any of the tenderers drop out of the process and decide not to proceed with the tender?  Consider if an unknown agreement was made.

 

Review the list of proposed suppliers/sub-contractors to be used by the successful bidder?  Did these organisations also bid directly for the tender exercise?  Such circumstances can lead to a pre-determined outcome as it would be irrelevant who was awarded the work.  This may identify cartel operating.

 

 

 

 

 

Blank rows are provided for your use e.g. to add additional checklist items.

 

Using PCS

Using PCS

If uploading Procurement Documents to PCS file size restrictions  apply.  These are:

  • 10Mb per document a maximum of 40Mb for the Procurement Officer;
  • 10Mb per document with a maximum of 30Mb for the Supplier

If you are using PCS-T, attachments cannot be added to the Contract Notice on PCS. You must add your documents to PCS-T.

Using PCS-T

Using PCS-T

If you use PCS-T you must provide time limits for the receipt of tenders (bearing in mind statutory minimums).

Mixed Procurement Exercises

Mixed procurements that contain any activity within the scope of the Defence and Security Regulations or the Utilities Directive  must  refer to their relevant legislation. Such procurement exercises do not come under the guidance of the Procurement Journey.

Where a procurement consists of a mix of activities:

Quickfire Guide

Quickfire Guide

Contract Award - Recommendation Report Contents

A Recommendation Report should be used to obtain approval (if required) to award a contract. The report should contain reference to the following:

  • a summary of the process to date
  • ensure any decisions for supplier disqualification have been fully documented and that the paperwork is available for inspection
  • recommendation of award & request for approval
  • Selection Stage evaluation results (if not contained within previous report)
  • technical & commercial evaluation (including any whole life costing) together with details of any clarifications conducted benefits and savings available
  • details of any risks still present and mitigation plans
  • Sustainable Procurement Considerations (life-cycle costing, social, economic and environmental)
  • Cyber Security Considerations
  • considerations in relation to Community Benefits
  • details on how the tender outcome will meet the requirements identified in the Commodity/Service Strategy.

Once you have obtained approval, you can notify both the successful and unsuccessful tenderers of the outcome and they should be notified as soon as possible.

Information provided to tenderers must, where applicable, include the grounds for any decision:

Consideration must also be given to PlanningSustainable Procurement and Risk Management throughout this stage of the Procurement Journey.

Route 3 is not intended to replace training and it is assumed that individuals will have been trained in:

The main objectives of this route are:

Before beginning Route 3, please consider the following:

  • good procurement is not just about buying well but it's often about buying less or, indeed, not buying at all.

Depending on the specifics of your procurement exercise,  the types of questions you might ask of stakeholders before starting your procurement could include:

  • have alternatives to procuring been considered and ruled out?
  • do you have a budget?
  • is there a robust documented business case supporting this procurement?
  • will this expenditure stand up to public scrutiny?
  • has Procurement been involved in the development of the business case? 
  • can Procurement provide support with cost options; enabling flexibility; minimising risk; and/or to inform decisions regarding the way forward?
  • are you aware of opportunities to buy your specific requirements through existing collaborative contracts?  If so, do you know how to access them?
  • can you use output information from the Prioritisation Tool
  • for Care and Support Services, when considering continuing an existing service the Flowchart to Help Decision Making for the Continuation of an Existing Service provides additional guidance;
  • for Care and Support Services, please also refer to Specific Considerations and Rules for CSS Contracts.

Consideration must also be given to PlanningSustainable Procurement and Risk Management  throughout the Journey.

Purchases of goods and services are subject to Freedom of Information requests.

Please be aware that where the term 'commodity' is used within the Procurement Journey this can equally refer to categories of goods and/or services.

Please note that, other than on the final contract, there is no legal requirement for a "wet" signature at any point of the procurement process, however, please check your individual organisation's policy regarding signatures.

You should use Lessons Learned from previous contracts/procurement exercises to inform your new strategy. As you progress through the Journey you should constantly re-inform your strategy with any new information.

There are natural break points within the Procurement Journey.  These can be used as review points for sign off and approval to proceed to the next stage of the process.

Quickfire Guide

Quickfire Guide

Procurement Exercise Review and Approval

Suggested review and sign off points are:

  • at project initiation;
  • after initial Opportunity Assessment;
  • for approval of strategy, including budget;
  • for contract management approach;
  • for approval of Procurement Documents;
  • at Contract Award stage;
  • at implementation stage;

Throughout the Journey you will see reference to these sign off points at the relevant sections with supporting documents.

Any approval and review of the project plan should be subject to your organisation's governance arrangements.

You are now ready to begin Route 3 of the Procurement Journey.

Please ensure this guidance is used in conjunction with the internal governance, policies and procedures for your Organisation.

Any documents you need are listed below

Lessons Learned

The conclusion of any contract is the ideal time to review how well the contract performed.

You should explore lessons learned: these can inform future contract terms or strategies. The Organisation should determine what worked well and any areas which could be improved.

All those involved with the bid and/or contract, both in your Organisation and the bidder Organisations, should be asked for feedback.  This could include a variety of roles e.g. contract managers, procurement officers, logistics, estate managers, etc.

Quickfire Guide

Quickfire Guide

Lessons Learned - Example Questions

Lessons learned could consider, for example:

  • What worked well and what didn't work?

  • What areas of the contract were most important to you and your organisation?

  • Were any innovations implemented and if so, what value-add did they deliver?

  • Were there processes/practices used that could be improved upon or are not needed at all?

  • Can Information and Communications Technology (ICT) systems be used in any way to improve performance?

 

Further examples include:

 

  • the total cost of the contract, including staff costs, and costs which were not anticipated at the planning stage;

  • the total savings achieved on contract value; and

  • any impact of the exercise on the market.

 

Any documents you need are listed below

YOU HAVE NOW COMPLETED ROUTE 3 HOWEVER PLEASE REMEMBER TO CONTINUALLY UPDATE YOUR STRATEGY.