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Procurement

PROCUREMENT

Contents:

Scope

Key Points

Background

Mandatory Guidance

Delegated Purchasing Authority

Separation of Duties

Use of Consultants

Shared Services

Prompt Payment

Electronic Purchasing Card

Further Guidance

Scope

1. This section gives general guidance on procurement and the use of the Electronic Purchasing Card (ePC) to all organisations to which the Scottish Public Finance Manual (SPFM) is directly applicable.

Key Points

2. "Procurement" is the process of buying goods, services and works from external suppliers. The procurement process begins when a need to buy something is identified and will generally end after the contract is awarded. Contracts must be awarded through genuine and effective competition unless there are exceptional reasons to the contrary.

3. Delegated Purchasing Authority (DPA) is distinct from financial authority and other organisations to which the SPFM is directly applicable should adopt procedures consistent with those in the core Scottish Government (SG).

4. There should be clear separation of budgetary authority and procurement authority. In addition, there should be an appropriate separation of duties within the purchasing cycle between staff who approve orders, those who receive goods, services or works and those who authorise payment. Similarly, comparable arrangements for the separation of duties should be put in place for the ePC by operational areas.

5. The SG Consultancy Procedures should be regarded as relevant good practice guidance by all organisations to which the SPFM is directly applicable.

6. All invoices should be paid in accordance with the guidance on timing of payments in the Expenditure and Payments section of the SPFM.

Background

7. "Procurement" is the process of buying goods, services and works from external suppliers. The procurement process begins when a need to buy something is identified and will generally end after the contract is awarded. Contracts must be awarded through genuine and effective competition unless there are exceptional reasons to the contrary. All procurement activity should be focussed on the delivery of value for money; conducted to high professional standards, in accordance with relevant guidance and to the relevant legal requirements; and overseen by appropriately trained and authorised staff. However, where a contract does not exist and there is a need to buy low value goods and services operational areas can use their ePC to purchase directly from the supplier.

Mandatory Guidance

8. The Scottish Government (SG) Procurement Policy Manual provides guidance on the rules that apply to core SG staff who are involved in procurement activity. Adherence to the policies set out in this manual is mandatory for core SG staff, and for any other entities (e.g. relevant SG Executive Agencies and SG sponsored bodies) whose procurement is managed by the Scottish Procurement and Commercial Directorate (SPCD) on a shared service basis.

9. The Scottish Procurement Policy Handbook is mandatory for all other organisations that fall within the scope of the SPFM. The Handbook should be read in conjunction with the Procurement Journey (a toolkit providing practical guidance on procurement procedures) and other guidance issued by SPCD, including Scottish Procurement Policy Notes (which provide updates on legal and procurement policy developments) and Construction Policy Notes (which provide guidance on policy relating to the conduct of construction projects and contracts).

10. The Construction Procurement Manual (managing or delivering construction / works projects) is mandatory for all organisations to which the SPFM is directly applicable.

11. The SG Consultancy Procedures is mandatory for core SG staff involved in the use of consultants.

Delegated Purchasing Authority

12. SPCD is responsible for the scheme of Delegated Purchasing Authority (DPA) within the core SG. Staff must not enter into a contract for goods, services and works and oversee the process leading up to and including the award of a contract and, any subsequent contract changes without the necessary written authority provided by the SG's Director, Commercial and Procurement. DPA is distinct from financial authority and other organisations to which the SPFM is directly applicable (including separate accounting entities within the Scottish Administration) should adopt procedures consistent with those in the core SG - and set out in the Scottish Public Finance Manual.

Separation of Duties

13. There should be clear separation of budgetary authority and procurement authority. Budget holders should have authority to commission orders by specifying their requirements and providing budgetary authority for the expenditure. The authority to purchase (DPA) and ultimately place that order should be in separate hands. In addition, there should be an appropriate separation of duties within the purchasing cycle between staff who place orders, those who receive goods, services or works and those who authorise payment. Separation of functions should be designed both to provide necessary safeguards against impropriety or unethical practice and to ensure achievement of value for money.

Use of Consultants

14. The use of business and management consultants can only be justified where the required knowledge and expertise is not available in-house. The SG Consultancy Procedures should be regarded as relevant good practice guidance by all organisations to which the SPFM is directly applicable. Specific prior approval levels for the SG, SG Executive Agencies and SG sponsored bodies are as follows:

  • SG: contracts up to £10,000 approved by a Deputy Director, between £10,000 and £50,000 approved by the relevant Director General and over £50,000 approved by the Cabinet Secretary for Infrastructure and Capital Investment, and Cabinet Secretary for Finance, Employment & Sustainable Growth.
  • SG Executive Agencies: contracts up to £10,000 approved by a member of the senior management team, between £10,000 and £50,000 approved by the Chief Executive and over £50,000 by the Cabinet Secretary for Infrastructure and Capital Investment and Cabinet Secretary for Finance, Employment & Sustainable Growth.
  • SG sponsored bodies: contracts over £100,000 approved by a Chief Executive.

Shared Services

15. A Procurement Shared Service has been established for Central Government organizations’ in Scotland.  Sharing services is a key theme of the Scottish Government’s strategy to make more efficient use of resources in the delivery of key objectives and outcomes.  The Procurement Shared Service has been developed in conjunction with a number of Central Government organisations’ with the principles of collaboration and collective governance at its core.  Three types of service have been developed:

  • The Fully Managed Service (FMS) provides comprehensive support on all aspects of procurement including tendering, contract management, policy and compliance;
  • The Fully Managed Service ‘Lite’ provides the Fully Managed Service to organisations with a low level of procurement spend; and
  • The Contracting Service operates on a call-off basis and is designed to provide assist organisations with individual procurement projects.  It can also be utilised to cover gaps in capacity.

If you are interested in finding out more information /signing up please contact Central Government Procurement Shared Services:

Contracting Services Manager - Patricia Malloy

Fully Managed Service Manager - Sandra McLaughlin

Prompt Payment

16. All invoices should be paid in accordance with the guidance on timing of payments in the Expenditure and Payments section of the SPFM.

Electronic Purchasing Card

17. The SG employs the Electronic Purchasing Card (ePC) to pay for low value goods and services that are not on contracts and the transaction is less than £5,000 excluding VAT. The use of ePC provides an efficient and effective method of paying for goods and services and reduces the costs associated with the raising, authorising and receipting the large volume of low value Purchase Orders, invoices and payments. The policy regarding the use of the card is detailed in the link below.

Further Guidance

18. Detailed guidance on procurement and related issues can be obtained from SPCD.

Links:

Scottish Government Procurement Policy Manual

Scottish Procurement Policy Handbook

Scottish Government Consultancy Procedures

Construction Procurement Manual

Major Investment Projects

Procurement Journey [A toolkit providing practical guidance on procurement procedures.]

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 Page Published / Updated: June 2015