Policy Forum by 33bB93K3

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									PUBLIC PROCUREMENT POLICY FORUM
TUESDAY 22 SEPTEMBER 2009

Attendees:
Paul McNulty, Scottish Procurement Directorate (Chair)
Douglas Bell, Advanced Procurement for Universities and Colleges
Stephen Connor, Advanced Procurement for Universities and Colleges
Colin Elliot, Stirling University
Jim Godfrey, Dumfries & Galloway College
Barry Graham, Central Government Centre of Procurement Expertise
Lesley Horne, Association of Directors of Social Work Contracts and Commissioning
Group
Jessie Laurie, Scottish Procurement Directorate
Ian Kelly, Strathclyde Police
Collette May, Scottish Procurement Directorate
Stacy McDonald, Strathclyde Fire & Rescue
Iain Moore, Scottish Procurement Directorate
Kate Nutt, Office of Government Commerce
Eileen O’Neill, VisitScotland
Owen Paterson, Scotland Excel
Mark Richards, Scottish Government Legal Directorate
Liz Thomson, Procurement Scotland
David Wares, Scottish Prison Service

Speakers:
Alistair Kerr, Momentum
Rod Turnbull, Remploy

Apologies:
Gordon Beattie, Greater Glasgow and Clyde NHS
John Cosgrove, Fife Council
Neil Dickson, VisitScotland
Ashley Gould, Highland Council
Jim Miller, NHS National Services Scotland

1.     Paul McNulty opened the meeting and thanked Members for attending. He
confirmed that the minutes from the meeting on 10 March 2009 had been agreed in
correspondence and published on the Scottish Procurement Directorate (SPD)
website.

Actions from meeting on 10 March 2009

2.     Iain Moore gave an update on the action points arising from the 10 March
meeting:
    SPD acknowledged that work on the policy issues in relation to lowest
        price/MEAT was outstanding. This would be progressed as soon as resources
        allowed.
    To date, SPD had received no suggestions from Members on ways of
        improving the dissemination of information on legal decisions.
       Following the discussion on responsible purchasing at the previous meeting,
        SPD agreed to consider whether to invite a supplier to present at a future
        meeting of the Forum. This would be considered under Agenda Item 8 –
        future discussion topics for the Forum.
       SPD was grateful for comments submitted by Members on the draft standstill
        guidance. These comments would be taken into account in revising the
        guidance.

Policy Update – SPD

3.      Iain Moore said that the following Scottish Procurement Policy Notes (SPPN)
had issued since the 10 March meeting:

       SPPN 2/2009 – Promoting the involvement of SMEs in public contracts –
        “six simple steps”.

4.      Douglas Bell said that the “six simple steps”, although reinforced by the
Procurement Capability Assessment, had not had the desired impact. In his view, the
Suppliers’ Charter should be re-energised and the list of public bodies which have
signed up to the Charter should be updated. In addition, Public Contracts Scotland
(PCS) should be publicised more widely to ensure that suppliers recognise that it is
free and make more use of it.

5.      Lesley Horne said that in the care context, smaller organisations were not well
equipped to compete against larger organisations even though the services they
provided could be of higher quality than those provided by larger organisations. Ian
Kelly said that smaller organisations were often naïve about the tender process and
did not properly read the tender documentation. There was a need for further training
for SMEs.

6.      Paul McNulty said that work was ongoing on a supplier communication
strategy. SPD would also be undertaking further work on the standardisation of PQQs
and the development of a central database of PQQs. Kate Nutt said that the
Department for Business, Innovation and Skills (BIS) was developing a training
package for SMEs and the Office of Government Commerce (OGC) was organising a
number of events for suppliers and procurers. OGC would be happy to share this
material with SPD.

       SPPN 3/2009 – Second consultation on implementing the EU Remedies
        Directive.

7.      Iain Moore said that SPD was grateful for comments received from Policy
Forum Members in response to the consultation on the Remedies Directive. About 20
responses had been received. All comments would be analysed to determine the final
version of the implementing regulations. SPD was arranging 5 training courses for
public bodies on the changes introduced by the Remedies Directive. These would be
delivered at the start of December and would be free of charge.

       SPPN 4/2009 – Public Contracts Scotland – advertising contracts £50,000 and
        above.
        SPPN 5/2009 – Developments on PCS – quick quote and tender mailbox.

8.      Iain Moore said that there was an expectation that contracts of £50,000 and
above should be advertised on PCS. David Wares said that the Scottish Prison
Service (SPS) advertised all contracts over £20,000. In his experience, advertisement
on PCS could result in a large number of expressions of interest, some of which were
not well directed. Paul McNulty said that SPS’s experience was consistent with the
feedback he had received and had led to the introduction of the quick quote facility.
This provided a full audit trail for quotes sought for low value, low risk contracts.
Kate Nutt confirmed that it would be mandatory for public bodies in England to
advertise contracts above £20,000 on the portal being developed by OGC.

9.      Paul McNulty said that SPD was in discussion with the Scottish Government’s
Construction Forum about the need for a higher threshold for construction contracts,
given the significantly higher thresholds for works contracts in the EC Procurement
Directives. Barry Graham suggested that once agreed, it would be appropriate to
review the threshold for construction contracts within 12 months of its
implementation.

        SPPN 6/2009 – Business continuity – pandemic flu and key supplier
         management

10.      Iain Moore said that SPPN 6/2009 included a draft letter for use in
determining the impact of absences as a result of pandemic flu on key suppliers’
ability to fulfil contracts. Ian Kelly and Leslie Horne confirmed that plans were
already in place within their organisations but that contingency measures would
depend on the number of staff affected and the status of transport infrastructure.
.
11.      Iain Moore said that the template standstill letters on the SPD website had
been revised to make clear that these should not be used for procurement exercises
starting on or after 20 December 2009. New template standstill letters would be
published for use in procurements to which the new standstill rules introduced by the
Remedies Directive apply. Leslie Horne said that it would be helpful for guidance on
the new standstill rules to address their application to Part B services contracts.

12.     Iain Moore said that the Scottish Government was revising its statutory
guidance under the Freedom of Information (FOI) legislation. The FOI Unit was
reviewing SPD’s 2004 guidance on the handing of FOI requests relating to tender
exercises, which would in future form part of the statutory guidance. The statutory
guidance would be published shortly for consultation. Action: SPD to circulate a
link to the consultation document, once published.

Best Practice Update – SPD

13.    Collette May said that work was under way through the National Best Practice
Working Group to review the Scottish Public Procurement Toolkit and to publish an
enhanced version on the SPD website. SPD was also leading work to develop an
abridged version of the Toolkit for use in low value procurements.
14.    It was hoped that the majority of Procurement Capability Assessments (PCA)
would be completed by the end of 2009 and that a report would be submitted to the
Public Procurement Reform Board (PPRB) next year. Douglas Bell said that it may
be necessary to refine the PCA next year.

15.    Collette May said that the Contract and Supplier Management Group was
developing materials and tools. Work was also ongoing to develop a guidance on
framework agreements.

16.     The Business Conduct Guidelines had been circulated to Members for their
comments. SPD was considering how best to launch the Guidelines and whether it
would be appropriate to secure PPRB endorsement and launch the Guidelines with a
new version of the Suppliers’ Charter. Ian Kelly said that the Guidelines should be
endorsed by PPRB. Barry Graham said that the Guidelines may cut across the
Scottish Government Finance Manual. Collette May said that she would seek advice
from Human Resources to ensure that the Guidelines were consistent with the
Manual. It was important that HR staff and procurement staff were aware of the
Guidelines. David Wares said that in his view the Guidelines strayed too far into HR
policies and that some organisations might have difficulty signing them off because of
this. Douglas Bell said that it would be helpful to include a link to the Guidelines in
future iterations of the PCA.

17.     Barry Graham asked for an update on the benefits tracking system. Collette
May said that Procurement Scotland would be taking this work forward. Douglas
Bell said that it would be useful to map all of the boards/groups in place across the
programme and the key initiatives being taken forward nationally.

Roundtable policy update – Members

18.     Douglas Bell asked about progress on work to develop consistent business
planning across the procurement Centres of Expertise. Paul McNulty said that the
issue needed to be re-visited. Action: SPD to provide an update at the next
meeting of the Policy Forum.

19.    Ian Kelly commented on the use of ‘staged decline’ where bids submitted
were not to specification. It was appropriate, in these circumstances, to notify
tenderers that their bids did not meet the specification and would not therefore be
evaluated further. This ensured that tenderers were made aware at an early stage that
they were being eliminated from the competition and why. Mark Richards said that it
was important for public bodies to be sufficient clear about the reasons for eliminating
a tenderer from the competition.

20.     Liz Thomson asked whether Members had any examples (aside from in the
construction context and in the Scottish Government led CBiP piloit programme) of
the use of community benefits clauses. Procurement Scotland was considering how
they could incorporate such clauses in collaborative contracts. Lesley Horne said that
she would be happy to share examples of community benefits in social care.

21.     David Wares said that SPS was considering how to deal with approaches from
third sector organisations seeking to deliver projects within prisons. Lesley Horne
said that such approaches were common in social care and posed a problem for local
authorities wanting to take advantage of projects but at the same time ensure genuine
competition. She said that the forthcoming joint SPD/JIT guidance on social care
procurement would be welcome since no guidance had been issued since August
2008.

22.    Stacy McDonald said that a report on the establishment of the fire Centre of
Expertise would be submitted to the Governance Board in October. It was hoped that
the Centre of Expertise would be in place by the start of the next financial year.

23.     Jim Godfrey said that smaller institutions often did not engage with national
policy and best practice initiatives and that communication with less mature
procurement teams needed to be considered. It was important that guidance issued by
SPD was proportionate and catered to smaller institutions.

EU Update – Kate Nutt, OGC

24.     Kate Nutt said that the new Energy Labelling Directive sought to expand the
scope of labelling beyond household goods and to establish minimum performance
levels for goods covered by the Directive. The Directive would mandate public
bodies to buy goods of a certain standard where above a €15,000 threshold.
Negotiations on the Directive were being led by the Department for Environment,
Food and Rural Affairs. OGC would prefer the threshold in the new Directive to be
consistent with the thresholds in the Procurement Directives. It would also prefer the
Directive to apply to Central Government only.

25.     The new Prompt Payment Directive sought to address poor payment practices
across Europe. Negotiations on the Directive were being led by the BIS. The
Directive would mandate public bodies to pay invoices within 30 days. In OGC’s
view, the same requirement should be made of private bodies. Iain Moore said that
the First Minister had given a commitment in June 2009 that the Scottish
Government’s standard terms and conditions would be amended to require all
contractors within the supply chain to pay their sub-contractors within 30 days of a
valid invoice. The standard terms and conditions for the supply of goods and services
had been updated on the Scottish Government’s website. SPD was working with
colleagues in the Construction Policy Unit in relation to works contracts. SPD would
issue a SPPN in due course asking other public bodies to adopt the standard clause.
Mark Richards said that it would be possible for public bodies to extract the principles
outlined in the standard clause and incorporate these in their contracts.

26.     Kate Nutt said that the Defence and Security Procurement Directive was
adopted on 21 August 2009. The Directive applied to the procurement of equipment
for military purposes and procurement relating to national security. It introduced a
tailored procurement regime with, for example, higher thresholds, the potential for
framework agreements to operate for 7 years and a negotiated procedure with a Prior
Information Notice. The UK had 2 years to implement the Directive; the Ministry of
Defence was in the lead.
27.     The European Commission was developing new guidance on social issues.
OGC had commented on an early draft of the guidance and met with the Commission
to discuss social issues. The final guidance was not yet available.
28.     A recent infraction case had focussed on how bodies entitled to use a
framework agreement were specified in the agreement. In the Commission’s view, it
was not sufficient to state that a framework agreement could be used by the ‘whole
public sector’. It was necessary to list recognised classes of bodies. OGC had
amended its standard wording and would issue guidance in due course. Owen
Paterson said that it would be helpful to have clarity on this issue. Scotland Excel’s
understanding was that there needed to be a reasonable assumption that bodies listed
in a framework agreement would actually use the agreement. Kate Nutt said that
there had been several infraction cases relating to development agreements.

29.   Chinese Taipei joined the GPA in July 2009. This meant that all bids from
Chinese Taipei should be treated in the same manner as bids from European
companies. One of the key issues for the next meeting on the GPA is the ‘buy
American’ legislation.

30.     The Office of Fair Trading (OFT) had published the findings of its
investigation into collusion within the construction industry. OGC had worked with
OFT on guidance for purchasers which was available on OFT’s website:
http://www.oft.gov.uk/shared_oft/business_leaflets/general/Information-Note2.pdf.
David Wares asked if SPD would issue a SPPN on the impact of the findings on
future procurements. Paul McNulty said that SPD would consider the need to issue a
SPPN. Action: SPD to consider the need to issue a SPPN on the findings of the
OFT’s investigation.

31.     Kate Nutt said that OGC was discussing with Ministry of Justice and BIS
colleagues provisions within the Bribery Bill which are designed to increase the
corporate conviction rate by encouraging companies to come forward if they become
aware that an offence has been committed. OGC was also considering whether the
current situation under the procurement Regulations is proportionate for corporate
entities convicted of certain offences under Article 45 of Directive 2004/18/EC. The
difficulty is that such companies are prohibited permanently from bidding for public
contracts, which is not the same for individuals, who can tender once their convictions
have become ‘spent’.

Guidance on the completion of contract notices

32.    Stephen Connor said that Advanced Procurement for Colleges and
Universities (APUC) had developed guidance on the completion of contract notices to
encourage a consistent approach to publishing contracts within the education sector
and ensure that colleges and universities provided all the information required. The
guidance mirrored the format of contract notices on PCS. It had been checked by
external lawyers. Paul McNulty said that SPD would consider if the guidance should
be adapted for generic use. He asked members to submit any comments on the
guidance to SPD in correspondence. Action: Members to submit comments on the
guidance. SPD to consider if the guidance should be adapted for generic use.
Sustainable Procurement Action Plan

33.    Iain Moore said that work was ongoing to finalise the Scottish Sustainable
Procurement Action Plan. The Plan outlined 10 steps to sustainable procurement and
required public bodies to produce their own delivery plans outlining how they will
achieve the 10 steps. The Plan would emphasise that purchasers cannot achieve the
10 steps in isolation; it is essential that they have backing from within their
organisations. The Plan also incorporated DEFRA’s ‘quick wins’ and linked with the
PCA. Stephen Connor said that he would be interested to see how the final Plan
linked with standard Environmental Management Systems.

Future discussion topics for the Forum

34.   Barry Graham circulated a paper which raised the key issues for the Policy
Forum going forward. These included:

        how to identify future discussion topics, both for the short-term and longer
         term;
        how to raise the profile of the Policy Forum and better communicate
         benefits/outputs;
        how to encourage support for the Forum and ensure that Members gain from
         their participation.

35. As there was insufficient time to consider these issues in detail, further
discussion was postponed until the next meeting of the Forum. Action: SPD to
include this on the agenda for the next meeting.

Use of reserved contracts – Alistair Kerr, Momentum and Rod Turnbull,
Remploy

36.     Alistair Kerr and Rod Turnbull gave a presentation on supported businesses.
The Scottish Parliament was the first organisation in the UK to let a reserved contract.
There were 3 framework agreements in Wales which were reserved for supported
businesses, for the provision of furniture, signage and IT. OGC was similarly seeking
to establish framework agreements for IT re-cycling, furniture and document
management.

37.    There were 23 factories in Scotland which met the definition of a supported
business. It would be possible to pull together a document mapping the supported
business market in Scotland. Work was ongoing to examine the potential for
supported businesses in Scotland to work together on preparing bids. Much work by
supported businesses was through sub-contracting.

38.    The meeting discussed the potential for BASE/Remploy to be involved in the
National Public Procurement Conference and Exhibition and the potential for using
PCS to raise awareness about supported businesses and capture supported business
opportunities. The meeting also discussed whether it would be possible to require
prime contractors to use reserved contracts to deliver contracts.
Any other business

39.     Members sought information on whether it is possible to exclude companies
suspected of involvement in organised crime from tender exercises. Iain Moore said
that SPD was in discussion with the Organised Crime Task Force about this issue and
offered to provide an update at the next meeting. Action: SPD to provide an update
at the next meeting.


Scottish Procurement Directorate
September 2009

								
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