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Review of Public Procurement in Scotland - Report and Recommendations

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13 Estates, Construction and other Capital Projects

Background

There is in excess of £1bn per annum spent in Scotland by the Public Sector on capital and capital-related projects. It includes expenditure on land, buildings, roads and community-sponsored housing. Also, nearly every project is unique in its content and purpose.

The Scottish Executive has developed a procedure for handling projects of this capital nature. The Gateway Review Process is well documented and distributed and is administered and supported by a professional department within the Scottish Procurement Directorate.

Findings

Although well recognised and understood, the Gateway Process is not consistently applied and utilisation occurs in less than 20% of the situations where it could be implemented.

Also some of the capital expenditure is handled by "technical experts" not all of whom also have procurement expertise.

13.1 Recommendation

The Gateway Process should be a mandatory part of the fabric for all public sector projects of this nature and over a value parameter. Its adoption must not be optional. Where in exceptional circumstances the specific "Gateway" process is not used organisations must substitute a documented equally effective capital project phase procedure. There should also be a central report from the Gateway Unit on the current status of each Gateway project to the relevant Minister.

13.2 Recommendation

Although the special nature of capital projects does not always lend itself to central contracts, the procurement officer principles and potential for delegated authority should still apply. In effect, capital projects not supported directly by the procurement department must still be administered by an individual who has formally delegated authority and who is classified as a "Procurement Officer". This means that the authority to procure delegated to that department and the register of authorised procurement officers for the department should be formally documented.

13.3 Recommendation

A Public Sector Capital Projects Committee should be formally established to share best practice and monitor market conditions and individual contractors. This should include executives and senior managers from across the sector who should, in a collegiate manner, pursue market place optimisation and the spread of best practice for capital projects management.