SME access to public contracts

We are working to improve access to public contracts for SMEs, the third sector and supported businesses.

This is a key part of our approach to meeting the sustainable procurement duty.

Measures include the following.

Procurement support and advice for SMEs

We have put in place a set of tools, policy support and guidance to simplify procurement processes and increase access to information and opportunities.

Public bodies are required to advertise all regulated procurement opportunities on the Public Contracts Scotland website, making it easier for SMEs to find and win contracts.

Regulated procurements are contracts of values of £50,000 and above for goods and services and of £2 million and above for works.

Public bodies are also required by law to ensure that their procurement practices are open to SMEs, the third sector and supported businesses.

We fund the Supplier Development Programme which runs events and works with partners to help SMEs and third sector organisations win work and grow their business.

And we continue to develop our collaborative procurement strategies to take account of the potential impact on and ease of access for SMEs and third sector organisations. This includes splitting larger requirements into smaller lots, making it easier for smaller firms to bid for work.

Figures show that almost 80% of public sector contract awards now go to SMEs.

Project Bank Accounts for construction projects

Our Project Bank Account model for construction projects ensures that payments to subcontractors - many of whom are SMEs - are prompt and protected.

Instead of money owed to subcontractors reaching them through the main contractor's bank account – where it can be delayed – they get it through the PBA.

Third sector support

From 2016-2022, we funded the Partnership for Procurement (P4P) programme which provided specific support for third sector organisations wishing to form consortia to bid for public sector contracts. Funding for P4P ceased on 30 June 2022, with a view to incorporating the services provided within a revised business support contract for the third sector from May 2023

We also provide support and training for third sector organisations linked to the Just Enterprise third sector contract

Removal of the option for public contracts to be awarded on the basis of lowest cost

We have removed the option for higher value public contracts (i.e. those defined by the Public Contracts (Scotland) Regulations 2015) to be awarded on the basis of lowest cost or price only.

Our statutory guidance selection of tenderers and award of contracts makes it clear that this approach should also be applied to award criteria for contracts defined in the Procurement Reform (Scotland) Act 2014, which are between £50k and the Public Contracts (Scotland) Regulations 2015 threshold.

Reserving contracts for supported businesses

Public bodies are able to reserve contracts for Supported Businesses under the public procurement rules in Scotland.

A public body is able to reserve contracts to Supported Businesses whose main aim is the social and professional integration of disabled or disadvantaged persons, and where at least 30% of the employees are disabled or disadvantaged persons.

We are making it easier for public bodies to contract with supported businesses through a multi-lot, multi-supplier framework for the provision of commodities reserved for supported businesses.  The framework runs until 9 December 2021 2022, and covers the following goods and services:

  •  furniture and associated products
  •  document management services
  •  personal protective equipment and uniforms
  •  signage

Further information:

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