Construction Procurement Handbook

Guidance for public sector contracting authorities on the procurement of construction works.

This document is part of a collection




To publicise a procurement procedure for the award of a public contract.

Adjusted average price

The adjusted average price is the average of all the tender prices provided excluding the highest tender price.

Abnormally low tender

A tender price which is less than the estimated value by a margin which requires explanation.

In particular, any tender that:

  • Is more than 15% lower than the adjusted average price; and
  • Exceeds the proximity margin, that is more than 1% lower than the lowest qualifying price;

Will be deemed to be potentially abnormally low, and will be excluded from the competition unless the tenderer satisfactorily explains the aspects that appear abnormally low.


The point at which the client accepts that bidder’s offer to perform the contract.



An individual or organisation which submits a tender in a public procurement procedure (see also Economic Operator)


Assesses the compatibility of human ergonomics and technical ability with the sequencing and logistics associated with constructing the design on site.

Building Information Modelling (BIM)

BIM is a collaborative way of working that facilitates early contractor involvement, underpinned by the digital technologies which unlock more efficient methods of designing, creating and maintaining our assets.

Business case

The business case is a test of the viability of the project and contains the justification for the project including value for money and why it should be done now.


The buyer is someone in a client organisation who is authorised to make purchases on its behalf.



Individuals or organisations who have notified the client of their interest in being invited to tender in a public procurement process.


A candidate or bidder’s notification of disagreement with the client’s decisions and/or conduct in a public procurement procedure.


Information sought by one party of the other in a public procurement process to ensure the bid is compliant and capable of acceptance.


The organisation which is buying the goods, services or works.

The client is rarely a single person, even on relatively small projects. Within the client, there are likely to be a number of groups and individuals with an interest in, or control over the project.

Competitive dialogue

A formal procedure under the Public Contract (Scotland) Regulations 2015 The Competitive dialogue procedure is a pre-qualification process. Short-listed candidates are invited to take part in a dialogue process during which the nature of the project may be discussed and possible solutions may be developed. When the dialogue process is complete, final tenders are invited.

Competitive dialogue with negotiation

A formal procedure under the Public Contract (Scotland) Regulations 2015


Characteristics of the procurement procedure and/or project particulars requiring specific time for consideration.


Procurement procedures must not deviate from relevant legislation and guidance. Bids must not deviate from procurement procedures.


Consultants are those individuals or companies providing construction services to a project. These include architects, project managers, engineers, cost consultants, surveyors acousticians etc. Consultants are distinct from contractors who are generally, in construction, the companies who build the asset.

The tasks might include:

  • Providing advice on setting up and defining the project.
  • Developing and co-ordinating the design.
  • Preparing production information and tender documentation.

Contract administration.


A contract is an agreement between two or more parties which creates or intends to create legally binding obligations between the parties to it. In Scotland this can be verbal or written and is formed by an offer and an acceptance.

Contract management

The client's arrangements after contract award for ensuring contract performance.

Contract notice

The advertisement which invites bidders for a contract.

Contracting authorities

Contracting authorities is defined in Regulation 2(3) of the Public Contract (Scotland) Regulations 2015 as the state, a regional or local authority, body governed by public law or association formed by one or more such authorities or bodies


Bidder awarded the public contract and obliged to perform the requirements. Also means individuals or firms whose purpose is to build or demolish.

Common procurement vocabulary (CPV)

Taxonomy of classification to standardise how contracting authorities convey procurement requirements across the EU.


The standards of capacity and capability required by the client before tenders are invited/evaluated.

The criteria that are used to evaluate the compliance of market approach responses. These include measures to assess how well competing responses meet requirements and expectations such as criteria to shortlist or rank suppliers. All evaluation criteria must be clearly stated in the request document.



The plan for the construction of the physical object which will deliver the client's requirements.

Design and build

Design and build is a project delivery strategy used to deliver a project in which the design and construction services are contracted by a single entity known as the design–builder or design–build contractor

Design Quality

Design quality is a combination of functionality (how useful the facility is in achieving its purpose); impact (how well the facilities creates a sense of place: and build quality (performance of the completed facility).

Design quality is about much more than style or appearance – it incorporates the key requirements of the stakeholders, functionality, whole-life value in relation to maintenance, management and flexibility, health and safety, sustainability and environmental impact. It is not merely subjective; it can defined and measured.


Economic operator

Another term for an individual or company which may participate in a procurement. (see also Bidder)

European Single Procurement Document (ESPD)

European Single Procurement Document. A self-declaration form used in public procurement procedures by public buyers and businesses in the EU and mandated for use in Scotland.


The process of marking candidates’ and bidders’ responses to the requirements at both selection and award stages.


Candidates and bidders can be excluded from participating in public procurement procedures if they fail to meet certain legislative requirements or others which are at the client’s discretion.


Form of contract

The agreement between client and contractor (or consultant) setting out respective rights, obligations and remedies relating to the purpose of the contract.


A procurement framework is an agreement between one or more clients and one or more consultants or contractors to enable procurement of a repeat need without knowing the related timing or quantities.


Gateway Review

A short, focused review of a programme or project carried out at key decision points in its lifecycle by a team of experienced practitioners, independent of the programme or project team.


Procurement categories are divided into goods, services and works. Goods (also known as supplies) are physical commodities which in construction terms may contribute to the construction of a built asset. In general terms they may include, eg, tables, chairs, computers, pencils etc, in construction they may be bricks, bags of sand, tins of paint etc. The EU defines public supply contracts as "...contracts having as their object the purchase, lease, rental or hire-purchase, with or without an option to buy, of products. A public supply contract may include, as an incidental matter, siting and installation operations."


Innovation partnership

These partnerships are intended to enable clients to call for bids without pre-empting the solution where the requirement cannot be delivered by the current options available to the market.

Intelligent client

A client which has experience of and the necessary expertise to conceive, develop and deliver a construction project for the optimum combination of time, cost and quality.



Where the client obtains goods, works and services that it cannot provide by itself.


“Most economically advantageous tender”. All awards of contracts should be made on this basis, it requires that the evaluation takes account of the quality and price of the tender against the requirement and not just the price or the quality.



Official Journal of the European Union, a virtual publication containing all procurement procedures for the award of public contracts estimated to be above the relevant monetary thresholds, and some below-thresholds ones.

Open procedure

A formal procedure under the Public Contract (Scotland) Regulations 2015. The open procedure does not include a pre-qualification stage and allows any interested party to bid for the contract.


Objective benefits produced by the output of a construction project and the use of a built asset.


Direct products of a project or organisation’s activities. For example, the built asset delivered by contract performance.


Prior information notice

A prior information notice (PIN) is a means of giving advance notice of forthcoming procurements; it can also be used as a call for competition.


The technical manner in which a procurement is conducted often dictated by legislation.


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.

Procurement (Scotland) regulations 2016

Regulations which give effect to the Procurement Reform (Scotland) Act 2014.

Procurement journey

Guidance provided by Scottish Procurement on the procurement of goods and services.

Procurement Reform (Scotland) Act 2014

The Procurement Reform (Scotland) Act 2014 introduced measure to promote the Scottish Procurement Model.

Procurement strategy

The plan for procurement of contracts which will deliver the built asset. This will cover all stages of the project, all natures of contract and how the market is to be engaged.

It is also the term used to describe the legislative requirement for a contracting authority to show how it intends to carry out regulated procurements.

Proximity margin

In abnormally low tender identification. The proximity margin shall be limited to a minimum value of £1,000 and a maximum value of £100,000.

Public bodies

A Scottish public body is an organisation created by the Scottish Government or Scottish Parliament which receives all or, or a significant portion of its funding from the Scottish Government.

Public Contract (Scotland) Regulations 2015

This instrument revokes and replaces the Public Contracts (Scotland) Regulations 2012 and gives effect in Scots law to Directives 2014/24/EU; 89/665/EEC; and 2007/66/EC

Public Contract Scotland

An online purchasing system for use by the public sector in Scotland



In a restricted procedure a bidder may qualify to be invited to tender.

Qualification may also refer to a proviso or caveat tabled by a bidder seeking to change the client’s requirements.


An objective measurement of performance against a national, international or an officially-recognised, sector-specific standard or benchmark. In procurement evaluation processes this is often combined with price and used as the basis for deciding which tenderer to award a contract to.

Quick quote

An online system provided on Public Contract Scotland portal for taking low value, low risk contracts to market.


Regulated procurement

Any procurement whose estimated value is at or above the thresholds set out by reference to the Procurement Reform (Scotland) Act 2014


What is to be delivered under a contract as set out in the contract documents.

Restricted procedure

A formal procedure under the Public Contract (Scotland) Regulations 2015


Risk is an uncertain event or condition that can have a negative or positive impact on the output and outcomes of a project. Risk is generally assessed, quantified and either retained or allocated to the contractor/consultant.


Scottish Public Finance Manual

The Scottish Public Finance Manual (SPFM) is issued by the Scottish Ministers as applicable guidance to the Scottish Government (SG) and other relevant bodies on the financial and procedural governance for handling and reporting of public funds.

Scottish Capital Investment Manual (SCIM)

The Manual provides guidance on the cyclical process of project development from inception at the service planning stage, to post project evaluation of service benefits realised once a new building is occupied. The guidance not only covers issues around investment appraisal, financial (capital and revenue) affordability and procurement, but also the project management and governance arrangements required to support the development of such programmes and projects.


The process by which bidders’ capacity and capability is evaluated to determine whether or not they can be invited to bid or have their bids evaluated.


The process by which candidates which have been excluded from a procurement process can demonstrate that they have taken action to remedy and areas which were the cause of their exclusion.

Senior Responsible Owner (SRO)

Owns the Business Case and is the primary risk taker

  • Accountable for the effective identification, quantification, management and communication of benefits throughout the project
  • Typically accountable for the realisation of benefits. In major projects this is not always practical so accountability may be devolved to the Programme Director


Services are intangible products such as the intellectual expertise provided by architects, IT specialists, engineers etc.

Services is also the collective noun for the equipment that provides heat, light, power, water and drainage to a building.


The technical detail of what is required and the standard to which it is to be provided.

It is a description of requirements and standards to which the goods, works or services should conform. Also known as a statement of needs, a statement of requirement, an operation requirement or a brief. Its purpose is to present prospective suppliers with a clear, accurate and full description of the organisation’s needs, to enable them to propose a solution to meet them.

Standing Orders

The Local Authority’s rules and procedures that govern its activities, including procurement of goods, works and services.

Standard conditions

Documents published by specialist organisations intended to provide consistent basis upon which the client and contractor (or consultant) can form a contract.


A period following the decision to award a contract to a tenderer during which any bidder may challenge the process resulting in a stay of award.


An alternative name for the tender submitted by bidders.


Any individual or company providing goods, services or works to a client.



The formal bid for the specific contract submitted by the supplier.


The individual or company bidding for the contract.


A monetary point equal to or above which certain procedures and rules must be found. In Scotland thresholds are set by reference to the Procurement Reform (Scotland) Act 2014 and the Public Contract (Scotland) Regulations 2015.


Value for money

The prime objective of Scottish Government procurement policy, defined as the optimum combination of quality and price to meet the client’s business requirements.



The means by which criteria are objectively ranked and scored according to that rank.

Whole life cost

The systematic consideration of all relevant costs and revenues associated with cost of an asset, including the design, construction, management, maintenance and decommissioning.


The EU defines works as the outcome of building or civil engineering works taken as a whole which is sufficient in itself to fulfil an economic or technical function. In other words this is the construction of a built asset such as a road, an office block or school. Those that have a value exceeding the current threshold defined by the EU rules will be subject to European tendering requirements. Standing Orders may have different values covering works, services or supplies.



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