Changes to the Public Procurement Rules in Scotland Consultation - Analysis of the Responses

Enforcement and monitoring

The consultation paper noted that Article 83 of the Public Procurement Directive, Article 99 of the Utilities Directive and Article 45 of the Concessions Directive require that one or more organisations in Scotland should monitor how the procurement rules are being followed and publish the results of any monitoring. There is also a requirement for public contracts and utilities contracts to be reported on every three years to the European Commission.

Options

The Scottish Government has to make a choice on how to meet these requirements and which organisation(s) should be nominated to carry out monitoring. It would be possible to create a new public body although this would require new resources to establish. Another option would be to use and develop existing functions, for example, the Single Point of Enquiry (SPoE).

Q58 Do you agree or disagree that the monitoring and enforcement body for Scotland should be the Scottish Ministers, acting through the existing Single Point of Enquiry? Please explain your answer.

Sixty-nine respondents agreed and 18 disagreed that the monitoring and enforcement body for Scotland should be the Scottish Ministers, acting through the existing Single Point of Enquiry. A further four respondents provided a neutral answer. Seventy-two then provided additional comments in support of their response.

Of those agreeing with this proposal, over half noted that it would be sensible to use the Single Point of Enquiry as it is already an established body, or that it would make the most of the existing expertise and resources rather than channel new resources into a new body. While this was supported across almost all sub-groups of respondent, around half of those supporting this option were local authorities.

However, the responses to this question demonstrate concern from some respondents over the issue of independent scrutiny, with some of those agreeing with the proposal also noting the need to separate the monitoring and audit role from that of giving advice and information. A small number of respondents wanted to see an independent scrutiny body or an ombudsman or tribunal to be put in place. For example, one local authority respondent wondered how judicial independence would be managed if a complaint was made about a procuring body which formed part of central government. As noted by one local authority agreeing with this proposal: "We think it shouldn't be the SPoE in its current form. There would need to be a clear separation of responsibilities between its existing and proposed roles in order to reflect the fundamental new areas the body would require to be responsible for."

Most of those disagreeing and providing commentary in support of their response also commented that there would be a conflict of interest if there were not a separate body or noted the need for a body separate from Ministers to avoid conflict of interest. One third party organisation suggested a separation of powers with a tribunal with statutory powers to carry out investigations.

Two representative bodies of private organisations noted the monitoring of compliance would be needed.

Three representative bodies in the private or professional sectors also suggested a role modelled on the Federal Procurement Ombudsman in Canada, and provided information on how such a body could be structured and its remit.

Remedies Directives

The consultation paper noted that the Regulations that will transpose the new Directives will also need to give effect to the associated EU directives on remedies. These Directives are given effect in the existing Public Contracts (Scotland) Regulations 2012 and Utilities Contracts (Scotland) Regulations 2012 by Part 9 Applications to the Court in each of the Regulations.

There needs to be a continued availability of a remedies regime. In setting out the provisions for remedies the Scottish Government could copy the approach taken in the existing Regulations, although some stakeholders have previously asked for a different approach to be taken in Scotland.

Q59 Do you agree or disagree that we should simply copy the provisions on applications to the court from the existing 2012 Regulations? Please explain your answer.

Of the seventy-five respondents providing an answer to this question, more agreed (43) than disagreed (25); while seven provided a neutral response. Agreement and disagreement with this proposal came from across most sub-groups. Sixty-six respondents went on to provide commentary to support their response.

Of those agreeing that the Scottish Government should simply copy the provisions on applications to the court from the existing 2012 Regulations, most commented that the current system appears to be working or that it would be a waste of resources to create a new approach. A small number also commented that the existing system is understood well. There were concerns from one or two respondents that there would be an increase in challenges and appeals, thus creating delay in contract awards, if a new review body is established.

Of those providing a neutral response to this question, there was once again, reference to the Federal Procurement Ombudsman in Canada, and the need for a similar approach of an ombudsman to be adopted in Scotland. A small number of organisations were less concerned about the approach to be adopted, and simply noted a need for a robust and speedy system that offers a balance between providing remedies and ensuring the flow of contracts. There were some references to the low level of court action in comparison to the volume of public procurement activity.

Many of those disagreeing with the proposal noted the need for an additional review body in the dispute process that sits below the court.

A small number noted the need to move to a faster or improved system of remedies solutions, with some respondents commenting that the current process can be lengthy. In line with this, a small number of respondents commented that a new system could make things more simple and less time consuming.

Once again, there was a degree of concern that the current legal process can deter SMEs from making a challenge, with some comment that some suppliers have little confidence in the impartiality of the current process.

The Remedies Directives make specific provision for the establishment of an independent review body that reviews complaints regarding compliance with EU procurement law. The Scottish Government is considering the establishment of an administrative review body with statutory powers to act as the first point of escalation for complaints.

Q60 Do you think there is a need for a review body which sits beneath the national courts?

Fifty respondents agreed there is a need for a review body which sits beneath the national courts, 26 disagreed. Five respondents provided a neutral view and neither agreed or disagreed. Sixty-two went on to provide additional commentary in support of their response.

Of those in agreement with this proposal, a key theme was that this would resolve issues more quickly and effectively and reduce the need to use Sheriff Courts. A small number of respondents referred to the need for an ombudsman. There was also some reference to this being of benefit for lower value contracts and / or SMEs. There was also a preference from some statutory organisations for a tribunal rather than an administrative review body.

However, there were a number of qualifying comments made by respondents, which included;

• This needs to be a faster option than using the Sheriff court.
• This needs to be able to discourage speculative or malicious challenges.
• It might simply add another layer of bureaucracy and reduced inefficiency, particularly if there is still recourse to Sheriff court for a number of challenges.
• It would need sufficient powers to ensure it can deliver binding decisions.

A key theme from respondents, primarily from local authorities, opposed to the setting up of a review body that sits under the national courts was that the existing provision works well and has a clear defined process to be followed.

Some of the qualifying commentary from those in favour of this proposal was echoed by respondents not in favour, namely, that this could result in delays and increased costs, that there could be an increase in unnecessary challenges or appeals or that it would add another layer of bureaucracy. Some local authorities also noted that Sheriff courts currently offer the required level of expertise and scrutiny which would not be available from a new review body.

Question 61 then went on to ask,

Q61 If so, do you think the review body should be established as a tribunal within the Scottish tribunals system?

Seventy-two respondents provided a response to this question. Views were relatively mixed, with 35 respondents in favour, and 29 against the establishment of a review body as a tribunal within the Scottish tribunals system. Eight respondents provided a neutral response, neither in favour nor against this proposition.

Some of those who had not agreed with the establishment of a review body at the previous question still opted to provide a response at this question.

Forty-eight respondents provided commentary in support of their response.

Those in favour of this proposal noted a number of benefits, the key one being that this would provide quicker decision making. Alongside this, other benefits included that it would be less bureaucratic, it would be cheaper than using the court process, that it would be more accessible to businesses and might help to increase SME engagement in the procurement process overall. It was also seen to be a means of developing specialist expertise within the procurement process.

Regardless of whether respondents were in favour of this proposal or not, there were some calls for further consultation. There were also some queries in relation to the set up and composition of the review body, and the powers that this body would have.

There were some concerns over the potential this could create for an increased number of challenges to the procurement process, or that this could be expensive to set up.

The key comment emerging from those against this proposal was that the current system works well enough and that this change is not needed.

Question 62 went on to ask about another option that could be considered;

Q62 Or do you think it should take some other form, for example, a Scottish Procurement Ombudsman?

Seventy-five respondents opted to provide an answer to this question. As shown in the following table, 49 said 'no', compared to 18 who said 'yes'. Eight respondents gave a neutral answer. Among those responding, a far higher number of local authorities responded 'no' than 'yes' (21 compared to one who said 'yes').

Question 62: Do you think it should take some other form, for example, a Scottish Procurement Ombudsman?

	Yes	No	Other	No reply
Local authority (27)	1	21	1	4
Executive Agencies and NDPBs (13)	1	4	2	6
NHS (6)	-	5	-	1
Other statutory organisation (11)	1	5	-	5
Third sector / equality organisation (20)	1	2	-	17
Private sector organisation (18)	6	3	1	8
Representative body for third sector / equality organisations (12)	2	1	2	7
Representative body for private sector organisations (9)	2	2	1	4
Representative body for professionals (6)	-	3	-	3
Union (5)	-	-	-	5
Housing / Care (4)	3	1	-	-
Other (2)	1	-	1	-
Individuals (7)	-	2	-	5
TOTAL (140)	18	49	8	65

Fifty-three respondents went on to provide additional comments.

The key comment from those replying 'no' to this question was that they would prefer the option of a tribunal established within the Scottish tribunals system, created by the Tribunals (Scotland) Act 2014.

Five respondents, mostly local authorities, commented that existing channels should be utilised as a defined process is already in place; another five - again mostly local authorities - commented that the option to complain via the Scottish Public Sector Ombudsman already exists; and a small number noted that the existing process has the necessary expertise to perform this role. Other concerns noted by those replying 'no' included:

• This would be too costly to set up.
• This could lead to an increase in challenges or appeals; with some concern that these could be spurious and expensive.
• That this is not needed or not appropriate.
• This would simply add another layer of bureaucracy.
• A concern that there are a wide range of ombudsmen across the UK; and interpretation of the rules they are monitoring varies a lot, leading to a lack of cohesion in decision-making.

A small number of respondents also noted there needs to be further consultation and more information provided before a decision can be taken; for example, more information on the proposed powers.

While most sub-groups were represented among respondents replying 'yes' to this question, a significant number were from representative bodies and organisations in the private sector. Key reasons given in support of this, each by small numbers of respondents were that this is a proportionate approach to reduce the risk of excessive legal fees to public bodies, that it would provide a more specialist approach or that it would enable faster decision-making.

Three organisations outlined a number of roles that could be undertaken by a Scottish Procurement Ombudsman and these included:

• Being an independent review body to act in cases of non-compliance, and having powers to impose penalties in respect of non-compliance.
• Having statutory powers to require information in relation to procurement.
• Driving good practice in public sector procurement.
• Having the power to impose sanctions required by Remedies Directive.

However, some of these respondents noted that more consideration is needed before a decision can be taken. A small number of respondents commented that while they had no specific preference, they would like to see a robust and speedy process in place.

Summary : Enforcement and monitoring

There was majority agreement for:

• A monitoring and enforcement body for Scotland which is the Scottish Ministers, acting through the existing Single Point of Enquiry (SPoE). There were concerns over the issue of independent scrutiny and a conflict of interest, with some calls for the separation of a monitoring and audit role from that of giving advice and information.
• The Scottish Government to simply copy the provisions on applications to the court from the existing 2012 Regulations. There was some perception that the current system works well and that additional resources should not be spent on creating a new approach. Overall, a need was defined for a robust and speedy system.
• A review body that sits beneath the national courts. There was a perception that this would need to have sufficient powers to ensure binding decisions can be delivered and to avoid the need to still have recourse to the Sheriff court. However, there were some comments that the current system works well and has a clearly defined process to be followed.

Views were relatively split as to whether the review body should be established as a tribunal within the Scottish tribunals system.

There was a perception that this would provide quicker decision making and be cost efficient in comparison to the court process, although there are also concerns that this could lead to a higher number of challenges. There were again comments that the current system works well and does not need to be changed.

There was limited support for this to take some other form, for example, a Scottish Procurement Ombudsman, with 49 respondents against this option, and only 18 for.

Across these questions, there were some concerns that there could be an increase in the number of challenges and appeals if changes are introduced, and some comments that the existing structures work well and additional resource should not be spent in creating changes to the system.