Part 2 – Specific guidance for use where a public body is procuring a care and support service – the procurement process
7. Key stages of the procurement process – introduction
7.1 The second part of this best-practice guidance focuses on the procurement of care and support services.
7.2 Detailed consideration of other methods of securing services is outwith the scope of this guidance. The following chapters are therefore only relevant where a public body has either decided to, or is required to, procure a service from an external service provider.
7.3 Where a public body is procuring a care and support service, the commissioning cycle diagram in chapter 5 of this guidance envisages four stages to that procurement whereby public bodies should:
- stage 1: analyse individual needs, intended outcomes and service providers
- stage 2: plan the procurement process and develop the service specification
- stage 3: do the procurement exercise and award and manage the contract
- stage 4: review the arrangements and individual outcomes
7.4 Chapter 8 focuses on the first stage (analysing individual needs). It is worth noting that much of the information described will likely be routinely collected by a public body as part of its wider commissioning process, to inform procurement strategies, and/or to support statutory and local performance indicators and contract management. Information is also available from public bodies' finance systems. Public bodies should make use of all existing information in their analysis.
Rules specific to the procurement of care and support services
7.5 As mentioned in part 1 of this guidance, the quality or availability of care and support services can have a major impact on the quality of life and health of people who might use these services and also their carers. Also, many of these services are being increasingly personalised to better meet people's needs. For these reasons, these services are often purchased differently to other services that generally apply to public procurements and human rights and equality principles.
7.6 Chapter 8 also introduces the specific public procurement rules that apply to care and support contracts (including those that apply at different contract value/threshold levels) and which public bodies should familiarise themselves with before taking forward a procurement exercise.
7.7 In summary, the Public Contracts (Scotland) Regulations 2015 provide for the 'light-touch' regime that applies to the procurement of certain health or social (including care and support) and some other services where these have a value equal to or greater than £663,540. See Annex 7 which describes the range of health or social care services covered by that regime. This guidance is concerned with those services that are principally care and support in focus.
7.8 Chapter 8 describes the procedures for handling lower-value procurements for these types of care and support services and which are regulated by the Act.
7.9 These rules which are described in the context of the key stages of the procurement process as illustrated in the commissioning cycle diagram in chapter 5 and are the main focus of the following chapters.
8. Stage 1 of the Procurement Process - Analyse
8.1 This chapter highlights that effective planning should be carried out before any procurement process begins. This planning should include consultation with stakeholders, those who might use the services, and their carers (see chapter 6), about what is needed and the available budget. It should also include early market engagement to understand the solutions that might be available and to understand how a requirement can best be met.
This chapter also describes the main procurement rules that apply, at different thresholds, where a public body is procuring a care and/or support service.
Quality and cost considerations before procuring
8.2 In accordance with regulation 76(9) of The Public Contracts (Scotland) Regulations 2015, a public body may now also take account of some other issues when procuring these services including:
- the quality of the service
- the continuity of the service
- the affordability of the service
- the availability and comprehensiveness of the service
- the accessibility of the service
- the needs of different types of service users
- the involvement of service users
8.3 This is not an exhaustive list and there may be other considerations that a public body may also take account of and which are relevant on a case-by-case basis.
8.4 The Public Contracts (Scotland) Regulations 2015 confirm that a public body is not able to award a contract on the basis of lowest price only. This includes contracts for health or social care services that fall within the scope of those Regulations. This means that, in accordance with regulation 76(10) of The Public Contracts (Scotland) Regulations, contracts for these services must be awarded on the basis of both quality and price.
Application of the rules - Thresholds and other considerations before procuring care and support services
8.5 A public body should first consider the total value of a care and support contract. This includes, where appropriate, any option for an extension of the contract. More detail on valuing contracts is in regulation 6 of the Public Contracts (Scotland) Regulations 2015.
8.6 The table below summarises the rules that apply to care and support contracts at different threshold levels. It should be referred to when reading the following paragraphs 8.8 to 8.18.
|Equal to or greater than the £663,540 threshold specified in the Public Contracts (Scotland) Regulations 2015and as amended by the Public Procurement etc. (EU Exit) (Scotland) (Amendment) Regulations 2020|| Light touch provisions in the Public Contracts (Scotland) Regulations 2015 apply. Must be advertised on Public Contracts Scotland (PCS) and for onward transmission to the UK Find a Tender service (FTS) or the EU Tenders Electronic Daily (TED) depending on the start date of the procurement process or whether it is a European Structural and Investment Fund (ESIF) project:
|£50,000 – £663,539.99||May award without seeking offers, but should consider the principles of procurement where relevant. For contracts over £50,000, a contract award notice must be published on PCS and certain other rules apply (see paragraph 8.12).||May choose to seek offers: in which case all provisions of the Procurement Reform (Scotland) Act 2014 apply|
|Below £50,000||Non-regulated procurement|
8.7 The specific rules that apply to the procurement of care and support contracts at these different threshold levels are described in more detail below.
Specific rules for care and support contracts under the Public Contracts (Scotland) Regulations 2015
8.8 For contracts or framework agreements with a value equal to or greater than £663,540, all of the 'light-touch' provisions (described in regulations 74-76 of the Public Contracts (Scotland) Regulations 2015) apply. Specifically, the following applies. Public bodies must:
- publish a contract notice or prior information notice (PIN) as a call for competition (unless it is a direct award without competition) on PCS for onward submission to FTS (or TED where applicable)
- publish a contract award notice
- continue to follow a process that ensures the observance of the principles of procurement
Also, regulation 58(1) and 58(3) of the Public Contracts (Scotland) Regulations 2015 require that a public body must consider whether any of the mandatory exclusion grounds referred to in those regulations apply in respect of the potential service provider.
Specific rules for care and support contracts between £50,000 and £663,540 - award with advertising
8.9 For contracts or framework agreements with a value of £50,000 or more, but less than £663,540,a public body should decide, on a case-by-case basis, whether or not to seek offers in relation to the proposed contract.
8.10 The flowchart at Annex 6 provides some illustration of the sort of things that might be considered by a public body when deciding whether to seek offers for contracts of this value. A number of factors may influence this decision, as explained below, but are not limited to:
- the estimated value of the contract
- the application of the procurement rules, procurement policy and benefits and risks to people who use services and service delivery
- application of local financial regulations and standing orders
- the specifics of the sector concerned (for example, the size and structure of the market and commercial practices)
8.11 Where a public body chooses to seek offers in relation to a contract, then as with all contracts with a value of £50,000 or more, it must be advertised on the Public Contracts Scotland (PCS) website. All of the provisions of the Act will apply in that case.
Specific rules for care and support contracts between £50,000 and £663,450 - award without advertising
8.12 For contracts of this value, a public body may choose to award care or support contracts, or framework agreements, without seeking offers in relation to the proposed contract. This is consistent with the provisions of section 12 of the Act and this best-practice guidance should be read together with that. Under the Act, there are some provisions that still apply when a public body chooses to award without advertising. These are:
- section 23(2) of the Act: a public body must publicise a contract award notice on PCS
- section 27 and section 28 of the Act: a public body must consider whether any of the mandatory exclusion grounds referred to in the Procurement (Scotland) Regulations 2016 apply in respect of the potential contractor/service provider
- section 35 of the Act: a public body must keep and maintain a register of contracts (a 'contracts register')
And more generally:
- section 15 of the Act: a public body which expects to have significant procurement expenditure (equal to or greater than £5,000,000) in the next financial year must, before the start of that year:
a) prepare a procurement strategy setting out how it intends to carry out regulated procurements or
b) review its procurement strategy for the current financial year and make such revisions to it as the authority considers appropriate
- section 18 of the Act: a public body which is required to prepare or revise a procurement strategy in relation to a financial year must prepare an annual procurement report on its regulated procurement activities as soon as reasonably practicable after the end of that financial year.
8.13 In addition to these minimum requirements, a public body, when not seeking offers in relation to a proposed contract, should also consider, where applicable:
- the general duties (section 8 of the Act)
- technical specifications (section 30 of the Act)
- charges for participation in the procurement process (section 31 of the Act)
Specific rules for care and support contracts below £50,000
8.14 Care and support contracts, or framework agreements, with a value below £50,000 are not regulated under the Act. As a matter of best practice a public body should however consider following a procurement process that is proportionate to the value of the contract.
Rules covering other services (i.e. those services that are not principally health or social or care and support) and which are also covered by the 'light-touch' regime
8.15 Albeit not the main subject of this best-practice guidance, there are some other services covered by the 'light-touch' regime that are not health or social care. Schedule 3 of the Public Contract (Scotland) Regulations 2015 also describes those services. The 'light-touch' rules also apply to these other services for contracts equal to or greater than £663,450. Any procurement below the threshold for these services is regulated by the Act.
Procurement staff should note how these other services (i.e. non-health or social or indeed, care and support) are managed. The 'light-touch' rules apply to contracts equal to or greater than £663,450. See paragraph 8.8 for the main rules applying at that level. For contracts between £50,000 and £663,450 - and unlike for health or social services contracts (including care and support) of the same value - there is no bespoke provision which allows general exemption from advertising these other services. This means that contracts of that value for these services are subject to the full provisions of the Act. Contracts below £50,000 are not regulated by either the Act or Regulations.
8.16 The principles of procurement apply to all relevant procurement activity regardless of value. This includes the principles of equal treatment and non-discrimination, and transparency and proportionality which should be adopted by a public body when running a competition.
8.17 It is the responsibility of an individual public body to decide whether, and at what level, advertising is required taking account of the procurement rules.
8.18 A public body is largely free to decide to use the procurement procedures, tools and techniques of its own choosing where procuring a health or social care services contract. That said, as a matter of best practice, it is likely it will want to follow a procurement procedure that is proportionate to the value of the contract and to take account of some fundamental considerations (for example Fair Work First and other matters described in more detail in the statutory guidance which support the Act).
Analysis - Establishing individual needs and intended outcomes
8.19 As a matter of best practice, a public body should have a local commissioning strategy and/or service(s) plan which establishes strategic and individual needs and determines what type of service should be put in place to meet those needs and deliver the intended outcomes. A public body should ensure that there is clarity about:
- the needs to be met and the outcomes to be delivered by the service taking into account requirements of the public sector equality duty
- how people who use services and their carers will be involved in defining their needs, expressing their wishes and choices and influencing the design of the service
- what positive outcomes the service is intended to deliver
- what choice and control the service will provide for people who use services
- how the service will meet the National Care Standards
- how the service will contribute to the public body's organisational objectives
Analysing existing arrangements for delivering the service
8.20 A public body should review its existing arrangements for delivering the service with a view to:
- identifying if and how the service needs to change in order to meet individual needs and intended outcomes
- considering afresh the application of the procurement rules to the public body's existing arrangements and future proposals
- evaluating existing arrangements for delivering the service against best value principles
8.21 Evaluating existing arrangements for delivering the service against best value principles will require a public body to consider:
- whether the service is effective and of good quality
- what it costs and whether it is cost-efficient
- whether it promotes equal opportunities
- whether it contributes to sustainable development
8.22 A public body should assess whether the service has met specified key performance indicators and other contractual requirements. It should seek feedback from people who use services and their carers and review other information relating to the quality of the service, including information from contract management and service review and information from the regulatory bodies, including any complaints about the service.
Budget and anticipated contract value
8.23 When a public body is considering budget and anticipated contract value it may take the following into account:
- the balance between small/short-term funding and larger/long-term funding
- whole-life costs, including set up, running and decommissioning costs
- the cost of meeting all regulatory requirements
- additional costs related to location (for example rurality)
- the complexity of the service
- training and continuing development of staff
- potential costs of staff transfers under TUPE Regulations
- additional costs of inflation
- any commitments to three-year funding cycles (or longer) where appropriate
8.24 A public body should also consider whether its own systems (for example, the operation of different administrative systems) and practices contribute to service providers' costs and, if so, whether modifications can be made.
8.25 A public body should assess if, and how, a service needs to change in order to meet individual needs and intended outcomes and consider how it can be improved. It should also assess the need for service continuity.
Considerations when attaching a value to care and support contracts
The direct award of a contract or framework agreement considered to be below £663,540 might be challenged on the basis that the legitimate value of the contract (or contracts awarded under a framework agreement) actually exceed the thresholds in The Public Contracts (Scotland) Regulations 2015 and that the procurement should, as a result, have been conducted in accordance with those Regulations.
Attaching a value to a contract (or contracts awarded under a framework agreement) for care and support services can be subject to a number of variables. A public body should consider first whether the contract is a public contract - i.e. is the awarding body a contracting authority as described in The Public Contracts (Scotland) Regulations 2015 and should, where relevant, also consider the SDS points set out in chapter 6 of this guidance.
For public contracts, ordinarily, where a contract is one of a series of similar contracts, the value of each must be aggregated to determine the estimated value. The care and support landscape is however complex and the needs of those receiving the services also needs to be carefully considered. This includes ensuring compliance with self-directed support legislation and, in particular, assessing the full range of contract types available to deliver individual care provision.
All of this means that a public body should also take account of the key considerations described in chapter 4 of this guidance and which a public body should ordinarily be thinking about when procuring a care and support service. Linked to this is advice also about determining the type and duration of a contract. Ultimately though, a public body should take its own legal advice when seeking to attach a value to a contract in a complex care and support context.
8.26 A public body should undertake research and hold discussions with potential service providers in order to map the market for the particular service. It should take into account service providers which already deliver services locally or more widely to particular care groups and in-house service provision. It should also assess whether other service providers and/or new providers are likely to be interested in delivering the service and might have the capability and capacity to do so. It should consider if there is a need to stimulate and/or shape the market, for example to promote interest from providers with specialist expertise or encourage the growth of social enterprise/community business models. In doing so, it should continue to ensure compliance with the procurement rules, e.g. by ensuring that it does not distort competition or prevent the equal treatment of bidders.
8.27 Prior Information Notices can be used to give prior notification of a requirement to the market.
8.28 As part of its analysis, a public body should consider:
- capability - is the market capable of meeting the requirement?
- capacity - are there enough service providers with sufficient capacity to deliver the service?
- maturity - is the market ready to deliver what is required?
- competitiveness - what is the anticipated level of interest from service providers?
- culture - will delivery of the service require cultural change?
- how the market is structured - will delivery of the service require service providers to work together in a new way?
- how secure the market is - how will future arrangements impact on the security of the market and/or services?
8.29 A public body should also take account of the policy and approach adopted by its organisation to the delivery of services in-house.
8.30 Comprehensive analysis of the market and the early engagement with potential service providers can provide valuable information on developments in service delivery which can be used to inform the service specification. It enables the public body to understand the number, type and size of potential service providers and to take account of this in determining future arrangements for service delivery. It also enables the public body to identify any barriers to the involvement of potential service providers in the procurement process.
8.31 Guidance on developing Strategic Commissioning Plans highlights the need to incorporate a market facilitation plan which is described as:
'Based on a good understanding of need and demand, market facilitation is the process by which strategic commissioners ensure there is diverse, appropriate and affordable provision available to meet needs and deliver effective outcomes both now and in the future.'
8.32 It should present a picture of current supply and demand, what that might look like in the future, and how a public body can support and intervene in the market to deliver this vision. It should set out a clear direction and bring together and analyse a range of data and information. This should include a strategic needs assessment, contract monitoring information, the views and preferences of supported people and the current state of the market (including market gaps). This analysis should be set out in such a way that it supports providers and potential providers to develop their business plans. A public body should do this by engaging with providers throughout the process, sharing intelligence on trends and costs. This dialogue should cover how the public body might structure, support and intervene in the market through investment and disinvestment allowing for planned growth and retraction.
8.33 Further information on market analysis is in the Procurement Journey which is the electronic procurement guidance linked to PCS - the Scottish Government's main advertising portal for all public contracts in Scotland above £50,000. Further advice on market facilitation will also be available from the Scottish Government Community Health and Social Care Directorate.
8.34 At the analysis stage, a public body should determine what resources are available for delivery of the service. Financial planning is essential to ensure that service specifications are realistic in specifying requirements and outcomes which can be delivered within the available budget and should be informed by a public body's analysis and benchmarking of costs. A public body should consider what funding it can commit to the delivery of a service and for what period of time. In particular, consideration should be given to the anticipated size and shape of service contracts in light of the promotion of self-directed support and any growth in direct payments.
Equality Impact Assessment (EQIA)
8.35 The public sector equality duty set out in the Equality Act 2010 specifically requires public bodies to assess new or revised policies and practices on people with different protected characteristics, taking into account the three needs of the public sector equality duty:
- to eliminate discrimination
- advance equality of opportunity
- foster good relations between people with different protected characteristics
The protected characteristics are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.
8.36 Public bodies may also wish to consider the integration of human rights considerations into their impact assessments to help them to meet their obligations under the Human Rights Act 1998. Further information about how to conduct equality impact assessments is available on the Equality and Human Rights Commission (EHRC) website.
8.37 Information gathered during the 'analysis' stage should inform the public body's appraisal of the options for service delivery, including:
- in-house provision
- shared services
8.38 Although consideration of other methods of securing services is outwith the scope of this guidance, it is worth noting that:
- Local policies and procedures for the procurement of care and support services should set out the principles and rationale for selecting providers, including in-house provision. Provision of a service by an arm's length body may be deemed to be 'in-house' in certain circumstances.
- Contracts between a public body and other public bodies (including shared service delivery vehicles) for the provision of services are, in certain circumstances, exempt from the procurement rules.
- A public body should seek legal advice/consider regulation 13 of the Public Contracts (Scotland) Regulations 2015 to establish whether an exemption from the public procurement rules may apply.
8.39 In appraising the options for service delivery, a public body should take into account:
- the timing, cost and nature of the requirement
- geographic location and/or rurality
- whether relevant expertise exists within the public body or another public body
- the potential for innovation
- whether there is a market of capable service providers
- the views of people who use services and their carers
- the views of service providers, their staff and trade unions
- the benefits and risks to people who use services and service delivery
- regulatory requirements relating to services and workforce
9. Stage 2 of the Procurement Process – Plan
- 9.1 This chapter focuses on the planning stage of a procurement exercise. It is essential that a public body develops a comprehensive procurement plan (that is, an individual plan which lays out the direction of how a particular procurement exercise should be organised in order to align with procurement policy) and build in adequate time for the completion of the exercise. In particular, a public body should allow for an appropriate lead-in period prior to commencement of the contract.
Procurement procedures described in the Public Contracts (Scotland) Regulations 2015
- 9.2 For many care and support services contracts, a public body may use the procurement procedures, tools and techniques of its choosing. It will likely want to follow a procurement procedure, as a matter of best practice, that is proportionate to the value of the contract and to take account of some fundamental considerations (for example, the principles of procurement where relevant and Fair Work First).
- 9.3 When doing so, a public body may choose to adapt or streamline one of the procurement procedures described in the Public Contracts (Scotland) Regulations 2015 (see paragraphs below). If it decides to do so, it is not obliged to follow the detailed procedural requirements set out in those Regulations. A public body should therefore not refer to the Regulations in the tender documentation issued to participants, as this may create an expectation that the detailed procedural requirements will be followed. In all cases, a public body should ensure that the procurement process is described accurately and clearly and then adhered to.
Developing a procurement plan
9.4 At the planning stage, a public body must decide how the service will be put in place and develop the service specification. A public body should develop a procurement plan which describes:
- the introduction and description of the purchase (considering the purpose, critical nature of it and any sensitivities etc.)
- whether it is advertising the requirement and awarding the contract or framework agreement by competition, extending an existing contract or making a direct award without competition
- the reasons for that decision
- the procurement process (for example, open procedure) that will be followed and relevant timescales
- how it can be demonstrated that the procurement exercise will be fair, transparent and non-discriminatory, i.e. compliant with procurement legislation
- the roles and responsibilities of staff involved in the procurement process
- the applicable governance arrangements and approval process
- how and when it will communicate its intentions to people who use the service and also their carers and proposals for their involvement in the procurement process
- how it proposes to handle fair working practices
- how the service specification will be developed with the involvement of people who use the services and also their carers and service providers in its development (including any opportunities to contribute to economic, social and environmental wellbeing and to reduce inequality)
- the type and duration of the proposed contract or framework agreement, available budget and estimated contract value
- research of the supplier market to identify current suppliers providing the same or similar service and any spend analysis available
- risks identified that may impact on the progress of the procurement
- anticipated benefits and outcomes
- what criteria will be used to select service providers and award the contract or framework agreement (including whether award criteria or performance indicators should include equality considerations)
- what transitional arrangements will apply if an existing service transfers to a different service provider
- how the contract or framework agreement will be managed
- how the relationship between the public body and service provider(s) will be managed
- arrangements for reviewing the service
- what action it proposes to take at the end of the contract term
- how the procurement exercise will be evaluated
9.5 Examples of individual procurement plans can be found in the Procurement Journey.
Advertising the requirement and awarding a contract or framework agreement by competition
9.6 A public body should decide, on a case-by-case basis, whether or not to advertise the requirement and award a contract or framework agreement by competition. A number of factors will influence this decision, as explained below and illustrated in the flowchart at Annex 6.
- application of the procurement legislation, procurement policy and risk of legal challenge
- application of local financial regulations and standing orders
- benefits and risks to people who use services and service delivery
Identifying care and support services
Schedule 3 of The Public Contracts (Scotland) Regulations 2015 confirms those services that are health or social care and which includes care and support services.
Where a contract includes a mix of services, the categorisation of the contract into a care and support contract will likely depend on whether the majority of the cost of the contract is for those services. Where the cost is made up of more than 50% of those services, then the contract will be a care and support services contract and vice versa. For contracts valued between £50,000 and £663,540 where the cost of the services is evenly split (i.e. 50-50), the contract is deemed to be a care and support services contract.
Application of the procurement rules to a contract or framework agreement for care and support services
9.7 At the analysis stage, a public body should consider the procurement rules that apply at different threshold levels as described in chapter 8. That chapter makes clear that contracts or framework agreements with a value of £50,000 or more but less than £663,540, a public body should decide, on a case-by-case basis, whether or not to seek offers in relation to the proposed contract and in accordance with section 12 of the Act.
9.8 Such decisions should also take into account the principles of procurement which include:
- treating economic operators equally and without discrimination
- acting in a transparent and proportionate manner.
9.9 A public body should also consider if national or local policy requires them to advertise and compete a contract. Advertising and competition may not be required, for example, where:
- advertising the contract at the current time would result in the loss of a linked service, for example, where the separate competitive tendering of a housing related support service would result in the withdrawal of the accommodation currently provided for people who use services and those units of accommodation could not be replaced
- it is possible to extend an existing contract under the scope and terms of that contract
Risk of legal challenge for breach of the procurement rules
9.10 A public body should assess the risk of legal challenge if it decides not to advertise the requirement and proceeds to award the contract or framework agreement without competition. A legal challenge may have serious implications for procurement activity and future service delivery. For example, for a 'light-touch' contract with a value of at least £663,540, if a court grants an ineffectiveness order together with damages, legal costs and/or compensation, this may divert monies from service provision and may cause significant disruption and uncertainty to people who use services. Also, standstill rules apply to care and support contracts of that value. The relevant legislation is part 3 of the Public Contracts (Scotland) Regulations 2015.
Application of legal remedies to contracts and framework agreements services covered under the 'light-touch' regime
9.11 The award of a contract or framework agreement for one of these services may be challenged on the basis that a public body has failed to ensure publication of the contract opportunity on the Find a Tender Service (or Tenders Electronic Daily where applicable) and follow a procedure sufficient to ensure observance of the principles of procurement. In relation to a contract or framework agreement worth at least £663,540 such a challenge would be pursued as a commercial action.
Community benefit requirements
9.12 The use of community benefit requirements provides a method of including economic, social and environmental matters in contracts that do not conventionally have these requirements as defined or measured outcomes. They provide a means by which new and innovative ideas concerning social issues can be inserted into contract specifications while ensuring value for money in their delivery.
9.13 Section 25 of the Act requires a public body to consider community benefit requirements for all contracts valued at £4 million or more. This value will be subject to review. Chapter 4 of the Procurement Reform (Scotland) Act 2014: statutory guidance provides guidance on community benefits, which includes:
- defining the appropriate community benefit requirements through stakeholder engagement
- what to say in the contract notice and contract award notice
- circumstances where community benefit requirements would not be relevant or proportionate
- reporting of expected and achieved benefits
9.14 A public body should consider community benefit requirements even if these contracts are not in excess of £4 million or where these are not covered by the Act.
Application of local financial regulations and standing orders
9.15 In deciding whether to advertise the requirement and award the contract or framework agreement by competition, a public body must ensure that it complies with local financial arrangements and standing orders.
9.16 These will typically refer to the requirements of the Public Contracts (Scotland) Regulations 2015 in respect of contracts worth at least £663,540. These should also establish local requirements for advertising contracts of different values. A public body should ensure that its local financial arrangements and standing orders comply with this guidance and legal requirements.
Benefits and risks to people who use services and service delivery
9.17 As described in chapter 6, a public body should analyse the benefits and risks to people who use services, and also to service delivery, of advertising the requirement and awarding the contract or framework agreement by competition. For existing services, this will require consideration, through consultation with people who use services and their carers, of the impact that any change in service provision or provider will have on:
- people who use services and their carers
- continuity of care
- the quality of the service and the outcomes delivered
- the cost of the service
- the market
- the workforce
9.18 This analysis may suggest that, where a public body is satisfied with the quality of a service and that best value is being achieved, the existing service provider should continue to deliver the service. If a public body's contract with the existing service provider includes an extension option that is within scope, the contract may be extended for the specified period. In the absence of an extension option, any decision by a public body to renew (or 'roll forward') its contract with the existing service provider must be compliant with public procurement legislation. Legal advice should always be sought in respect of any procurement decisions.
9.19 Alternatively, the analysis may suggest that the requirement should not be advertised at the current time and that a staged approach should instead be adopted. If a public body decides to adopt a different timetable for advertising the requirement, it should describe this in relevant procurement documents and set out how it intends to move towards competition in the future.
Contract renewal or direct award without competition
9.20 Where a public body decides to renew an existing contract, or to award a new contract without competition, it should ensure that:
- its decision is based on sound and objective business reasons and that this is fully documented
- its decision not to award the contract or framework agreement by competition is permissible (see threshold diagram at paragraph 8.6) and compliant with the public procurement Regulations and the principles of procurement
- its decision is consistent with local financial regulations and standing orders and local policy and procedures for the procurement of care and support services
- it is able to demonstrate that best value has been achieved
- the decision is subject to regular review (e.g. a decision not to advertise and tender a contract because of its low value will need to be reviewed should the total sum to be paid under that contract increase)
The renewal of an existing contract is likely to involve negotiation between a public body and service provider about aspects of service delivery, the outcomes required and the costs.
9.21 The competitive procedures which a public body may choose to follow, broadly, where it has chosen to compete a care and support services contract are:
- open procedure
- restricted procedure
- competitive procedure with negotiation
For further information on the procedures, please refer to the Public Contracts (Scotland) Regulations 2015 and guidance in the Procurement Journey.
9.22 A public body may seek a long-term (for example, over a period of 10 or 20 years) strategic partner or partners to redesign and achieve major changes in the delivery of a service and/or the use of resources. For example, it may decide to work with a service provider or providers to determine what could be provided across a range of services within the available resource, rather than tendering for particular services. In this situation, the choice of strategic partner(s) should be on the basis of a transparent and competitive process in accordance with the public procurement rules.
Public Social Partnerships (PSPs)
9.23 PSPs are strategic partnering arrangements, based on a co-planning approach, through which the public sector can work with third sector organisations to share responsibility for designing services based around service user needs.
9.24 A PSP typically comprises three stages:
- third sector organisations work with public sector purchasers to design a service
- a consortium of third sector organisations, which may also involve the public sector, conduct a short-term pilot, helping to refine service delivery parameters and maximise community benefit
- if the service is deemed successful, commissioners then need to consider the most appropriate approach to sustaining the PSP. This could involve a competitive tendering process but other methods of securing service delivery should also be considered
9.25 The Scottish Government published guidance on developing and running Public-Social Partnerships in July 2011.
Developing the service specification
9.26 The service specification is critical when procuring a care and support service contract as it provides detailed information to potential service providers about the public body's requirements. It describes what type of service a public body wishes to purchase in order to meet individuals' needs and the standards and outcomes that the service is required to deliver. The service specification will subsequently form part of the contract between the public body and service provider(s). A public body should ensure that service specifications are sufficiently flexible to take account of redesign and innovation, particularly where the contract will be for a longer duration. Any changes which are subsequently made to the contract may otherwise constitute material changes and may require the contract to be re-tendered.
9.27 Wherever possible, service specifications should be outcome-based. This encourages a public body to focus on the results it wants the service provider to achieve, instead of prescribing in detail how the service should be delivered. It gives the service provider greater flexibility to develop services (in consultation with people who use services) which meet individuals' needs, propose innovative solutions and direct resources.
Service specifications for certain social care services, for example home care services, can be very prescriptive about the tasks to be carried out by the service provider within the specified time. A public body should consider the extent to which task and time-based specifications will result in a service which achieves the desired outcomes for people who use services. Where task and time based specifications are deemed appropriate, these should be written in such a way as to ensure that the time allowed for the specified tasks is sufficient to provide a good quality of service, achieve the desired outcomes for people who use services and give a service provider flexibility to respond to immediate and changing needs.
9.28 Service specifications should make specific reference to the National Care Standards (which apply to registrable services) and the national health and wellbeing outcomes and integration indicators. Service specifications should also state the public body's expectations in relation to the personalisation of services.
9.29 In addition, a public body should ensure that service specifications:
- support the priorities contained in its procurement strategy
- are realistic in specifying requirements and outcomes which can be delivered within the available budget
- are developed in consultation with people who use services and service providers
- consider all aspects of the service and highlight, for example, whether premises will be required
- identify delivery requirements, including eligibility criteria and access to other services
- incorporate, insofar as relevant and proportionate, equality and human rights standards
- identify responsibilities and risks and determine who has responsibility for those risks
- incorporate key performance indicators and describe the mechanism for measuring performance and managing the contract
9.30 A public body should ensure that people who use services are involved in defining their needs and the outcomes they require and that their views inform the development of the service specification. It should also be proactive in involving service providers in the development of the service specification, whilst ensuring that they do not gain a competitive advantage in the subsequent procurement process. Under regulation 42 of The Public Contracts (Scotland) Regulations 2015 (prior involvement of candidates or tenderers) public bodies must take appropriate measures to ensure that competition is not distorted by a tenderer where that tenderer has been involved in the preparation of the procurement. Caution must therefore be exercised to ensure that service providers which are involved in the development of the service specification do not have an unfair advantage in any tendering process.
A public body should not assume that an existing service specification will reflect future requirements. Specifications which are already in use should be reviewed and updated to ensure that these are fit for purpose.
Also, a public body must ensure that there is no conflict of interest which could distort competition or prevent the equal treatment of bidders. This may include where individuals have a direct, or indirect, financial, economic or other personal interest which might be perceived to compromise their impartiality and independence of the procurement process.
Determining the conditions for participation
9.31 A public body must determine at the planning stage what criteria it will use to select potential service providers and what criteria it will use to evaluate tenders. The mandatory exclusion grounds must be applied and a public body may also choose to apply discretionary exclusion grounds, selection criteria and award criteria. Where it is appropriate and proportionate to apply other selection and award criteria, these can enable a public body to select service providers which are capable of delivering the service and to eliminate those which are not capable of delivering that service. These criteria can help clarify the conditions for participation and help a public body to consider the degree to which potential providers will meet the specification for service delivery and provide best value. A public body should:
- where it is appropriate to do so, use set selection and award criteria which are relevant and can be objectively measured and are non-discriminatory
- consider the involvement of people who use services and their carers in developing any criteria, preparing questions for use in interviews with potential service providers, and the nature and level of support they will require
- develop an evaluation template which clearly states the selection and award criteria and the scores and any weightings that will be applied
- disclose the selection and award criteria, and an indication of the scores and any weightings that will be applied, to potential service providers in the contract notice or contract documents
- establish a process for selecting potential service providers and evaluating tenders and agree the timescales and resources required for each stage of the process
- establish whether specialist input, for example from legal or finance teams, will be required and at what stage of the process
Distinguishing between selection and award criteria
9.32 Where a public body chooses to apply selection and award criteria, it should ensure that there is a clear distinction between them. This applies whether assessment of a service provider's suitability to deliver the service and assessment of the service provider's proposals for delivering the service are assessed in two separate stages (as in the restricted procedure) or at the same time (as in the open procedure). Further information on selection and award is available in the Procurement Journey.
Selection criteria: evidencing capability and experience
9.33 Where used, selection criteria may, for example, include:
- track record (relevant experience and expertise)
- provider capability/capacity
- policies and procedures
- awareness of National Care Standards (where applicable)
- non-subjective references, including from other public bodies
- skilled and competent workforce (including registration requirements and staff training/learning)
- business probity
- financial viability
9.34 A public body should have regard to relevant information held by the regulatory bodies in relation to registration, inspection, complaints and enforcement activity in order to inform the assessment of a service provider's track record, quality of provision and/or capability.
9.35 A public body may ask potential service providers to submit recent inspection reports relating to similar services which they deliver within the same geographic area and similar services provided in other geographic areas. A public body should consider asking for copies of previous inspection reports and outcomes of other regulatory activities, for example enforcement notices and complaint information and action plans. A public body should also take into account improvement action taken by service providers in response to inspection reports.
9.36 A public body should also ask potential service providers to submit a statement which summarises the quality grades of all of their registered services within the service category and geographic area. Account should be taken of the quality grading of these services. Where a public body considers that prior experience of service delivery within a registration category is essential, consideration should be given to how to apply quality grades in decision making. Caution should be exercised in using quality grades as a threshold, as the relevance of individual reports to the service in question is likely to vary.
9.37 It is important to note that some potential service providers may not have experience of delivering registered services in Scotland and may therefore be unable to submit inspection reports or details of quality grades. To allow for this, a public body should invite service providers to submit reports from other regulators or other evidence of their track record in delivering similar services. Where the Public Contracts (Scotland) Regulations 2015 or principles of procurement apply, a public body must not limit eligibility to Scottish-established service providers.
9.38 A public body could analyse the financial position of potential service providers and determine the level of risk that it would represent to the public body, having regard to the contract requirement and value.
9.39 Care should be taken to ensure that any selection criteria relating to financial viability are proportionate to the contract in question, do not unreasonably exclude SMEs or third sector service providers and genuinely reflect ability to perform the contract.
Single Procurement Document (SPD)
9.40 Mandatory exclusion grounds must be applied to care and support services, and a public body can also choose to apply the discretionary exclusion grounds, selection criteria and award criteria. A public body can choose to use the SPD in respect of exclusion grounds and selection criteria, and it is a matter of best practice to do so.
Award criteria: evaluation of a service provider's tender
9.41 While not required, award criteria can enable a public body to assess a service provider's bid to deliver the service in question. They must be relevant and proportionate to the particular requirement and should therefore be determined on a case-by-case basis. Award criteria may, for example, include:
- understanding service requirements and implementation proposals
- achieving outcomes for people who use services
- staffing structures and how these have been calculated to meet the needs of the people that use services group
- proposals for service improvement/development
- proposals for monitoring and evaluating service delivery outcomes and user satisfaction
- whole life costs
9.42 A public body should award a contract or framework agreement on the basis of the tender which represents best price quality ratio. In doing so, a public body should determine how it intends to evaluate quality and cost or price and whether, for example, it intends to apply a minimum pass mark to an individual technical question. A public body should consider inviting people who use services to contribute questions which can be put to potential service providers at interview. Any questions must be relevant to the contract outputs and outcomes and the contract award criteria established for the procurement process. These must also be objective and agreed and disclosed to service providers in advance. These should be evaluated, scored and be objective.
9.43 A public body should also determine the appropriate best price quality ratio for the particular procurement. For example, it may be appropriate for a tender for equipment to be conducted on the basis of 30% quality, 70% cost if the equipment meets manufacturing quality standards. However, when procuring care and support services, greater emphasis should be placed on quality rather than cost or price. In this instance, it might be appropriate, for example, to use a ratio of 70% quality, 30% cost.
9.44 Where a public body applies award criteria, a public body must make this available to potential service providers in advance as part of the requirement to publish in the contract notice the conditions for participation. It cannot score with reference to other factors or change the award criteria without communicating this to the tenderers and this may require a fresh tendering period. A public body should ensure that it clearly specifies the information it requires to allow a valid comparison of unit costs and to ensure that, for example, there is clarity about whether bids include the cost of potential staff transfers under the TUPE Regulations.
Use of e-auctions as part of the tender evaluation process
9.45 E-auctions are compatible with procurement law, subject to certain pre-conditions. The e-auction stage of the evaluation process allows tenderers to submit new prices/values throughout each phase of the auction. When the e-auction closes, the contract must be awarded on the basis of the result of the auction - no further evaluation or clarification is allowed.
9.46 Legislation does not preclude the use of an e-auction as part of the tender evaluation process for care and support services. However, its use is not appropriate in the context of social care procurement. This is because of the risk that an e-auction's focus on reducing costs will impact on the quality of care that can be delivered for the amount bid. E-auctions should not, in any circumstances, be used as part of the tender evaluation process for the procurement of care and support services.
Social issues in public procurement
9.47 It is possible to incorporate social issues in public procurement as award criteria provided that doing so offers a value for money outcome, complies with legal requirements and is directly related to the subject matter of the contract. It is important that social issues are considered at the planning stage and built into the procurement process. The Scottish Government has published guidance on this in SPPN 8/2012 - Equalities: Duty to consider award criteria and conditions in relation to public procurement.
Taking account of resources which service providers are able to bring to bear in delivering the service
9.48 Where the availability of resources, for example a building, has a bearing on a service provider's ability to perform the contract, it may be assessed as part of the evaluation of the quality of the service being offered.
9.49 A public body can consider whether or not it will accept variant bids, i.e. whether it will allow service providers to propose an alternative solution to that set out in the service specification. Where a public body chooses to allow variant bids, it must disclose this.
9.50 Variant bids can be useful because these allow service providers to suggest innovative ways of meeting a public body's requirements and delivering the outcomes in the specification. However, a public body should set out clear parameters within which such variants may be made, that is, which areas may be varied. All variant bids should be evaluated using the same criteria as the standard bids and compared on a like-for-like basis.
9.51 A public body should also consider whether to allow potential service providers to set out options in relation to different TUPE scenarios within its tenders. If so, it should provide clear directions to tenderers to ensure that bids can be compared on a like-for-like basis.
9.52 A public body may choose to indicate the available budget for delivering the service in question, specify the outcomes desired and invite providers to submit proposals for achieving the outcomes within the resources available. Stating an indicative budget ensures that service providers' tenders for delivering the service are affordable. This may be appropriate if, for example, a procurement exercise fails and the public body moves to negotiation with service providers. In other circumstances, stating an indicative budget may make it difficult for a public body to assess that the service represents value for money.
Establishing a timetable for the procurement process
9.53 To ensure that suppliers and service providers have sufficient time to respond to any advertisements published on FTS (or TED where applicable) and on PCS, a public body should take into account the complexity of the tender and the resource implications for service providers and should consider allowing additional time, where appropriate.
9.54 Where a public body advertises a contract or framework agreement for care and support services below £663,540, it should ensure that any timescales are compliant with legislation and where relevant, are realistic and take into account the complexity of the tender and the resource implications for service providers. This is particularly important if there is an expectation that service providers will submit consortia bids to allow discussions between service providers to take place.
9.55 In determining the start date of the contract, a public body should take into account any process and timescales for registering a care service where this involves a new service or change in the registration of a service. In all cases, a public body should seek to observe the timescales it has set for decision making.
Determining the type and duration of the contract
9.56 A public body's policies and procedures for the procurement of care and support services should identify an appropriate range of contracting mechanisms and provide a rationale for selecting different mechanisms, based on best value, the need for service continuity and desired outcomes for individuals. Individual procurement plans (see diagram at paragraph 2.25) should describe the type and duration of the proposed contract or framework agreement.
9.57 A public body should determine the most appropriate contractual mechanism on a case-by-case basis and ensure that suitable contracts are in place with all providers delivering care and support services.
9.58 Contracts will typically comprise a number of documents:
- the general terms and conditions which set out the obligations of the public body and service provider
- schedules, including the service specification, which set out the specific details of the services to be provided and the arrangements for their provision
9.59 Contracts for care and support services have traditionally required specific activities to be undertaken at specific times, with payment contingent upon inputs (resources) and outputs (service levels). The success of a contract has been determined by the extent to which the service provider has delivered the prescribed service. Contracts should be outcome-based. Outcome-based contracting is designed to shift the focus from activities to results. The success of a contract is determined by the extent to which the service provider can demonstrate progress towards achieving the specified outcomes. An outcome-based contract should include:
- the outcomes to be achieved - these must be realistic and take account of external factors which might impede progress
- clear performance expectations and measures
- key milestones which indicate progress and dates for achieving these
- monitoring arrangements which ensure performance is being achieved
9.60 In addition, all contracts should be:
- clear, concise and written in plain English
- complete and unambiguous - contracts should set out the obligations of the parties in a way that does not allow for differing interpretations of what is required
- comprehensive and consistent - there should be no contradiction of requirements or approach (a public body should ensure that all the documents which comprise the contract support the achievement of the required outcomes)
- flexible - contract conditions should be adjusted to take account of provider requirements for example, frequency of payment to smaller providers to maintain cash flow (but care must be exercised if conditions are amended after a competition as this would have the effect of distorting that competition)
- detail shared risk - contracts should seek to reduce both the impact and the likelihood of risk within acceptable levels and to define what each party must do to make this possible
- contain appropriate equalities and human rights clauses
9.61 Contracts should also make appropriate provision for dealing with poor performance.
Unlike framework agreements there are no explicit limits in public procurement law on the duration of a contract, although excessively long contracts may be open to challenge on the grounds that they are designed to distort markets/competition. Contract duration should be determined on a case-by-case basis, taking into account the public body's requirements and the needs of the people who use the services. Contracts should be subject to a review of service delivery at appropriate intervals.
A public body may decide to award contracts of longer duration, where necessary, to ensure continuity of service for people who use the services. It is possible to frame contracts in a way which would allow the service provider to continue to provide a service to a person who uses the service for an extended period. For example, it may be appropriate to specify that the service provider should (subject to satisfactory performance) provide continuous support for that individual for as long as support is required.
9.62 Decisions about contract duration should also include consideration of the importance of having a skilled, engaged and stable workforce in social care. Frequent re-tendering may have adverse implications for staff morale and conditions of service and can lead to the loss of highly motivated staff. Local authorities may, where appropriate, take a three-year (or longer) approach to funding, offering service providers the necessary stability to retain and train their staff and to plan for service development. It is, however, recognised that short-term funding may be appropriate in certain circumstances in order to encourage innovation in service delivery and respond to the changing needs of local communities.
9.63 It is also possible to provide that a contract will (subject to satisfactory performance) be extended by a certain period of years. Any option to extend the contract must be made clear at the outset in the contract notice. A public body should consider whether the circumstances make it appropriate to award a contract of longer duration (rather than providing an extension option), thereby offering itself and service providers greater certainty.
9.64 It might be appropriate to include price adjustment clauses in service contracts of longer duration, for example over two years. Price adjustments clauses determine the parameters for adjusting price (upwards or downwards) during the term of the contract. The inclusion by a public body of 'no-fault' termination, or break, clauses and successor body clauses in contracts of longer duration can provide flexibility in the event of a change in the public body's requirements.
Clauses relating to transitional arrangements
A public body should include clauses which specify the arrangements that will apply in the event that a service is transferred to a different service provider, including lead-in, exit and handover clauses. For example, consideration should be given to identifying the requirements on the incumbent service provider to transfer information such as care plans to the new provider.
9.65 A public body should also include a clause requiring the incumbent service provider to provide information about staff, conditions and costs to potential service providers during a procurement exercise. This allows a potential service provider to assess the staffing and financial implications of TUPE transfers prior to submitting its tender.
Determining the transitional arrangements that will apply
A public body should determine the transitional arrangements that will apply when a new service is established or if an existing service transfers to a different service provider. As part of the planning process, it should address:
- the timescale and arrangements for the service transfer
- how it will communicate the outcome of the procurement exercise and the transitional arrangements to people who use the services and their carers, service providers and relevant staff within their own organisation (including assessment and care management staff)
- what information will be provided to people who use the services and their carers about SDS, including direct payments and arrangements for dealing with applications additional support arrangements for people who use the services and their carers during the transition period
9.66 A service provider also has a legal obligation to notify people who use services about care service cancellation.
9.67 A public body may have legal obligations under the TUPE Regulations where it is outsourcing a service or bringing a service back in-house, in which case it should seek legal advice on the application of the Regulations to the particular circumstances. In all cases, public bodies should consider the potential impact of staff transfers under the TUPE Regulations:
- on continuity of support to people who use services and their carers
- on the cost of delivering the service
- on the affected workforce
It should also consider what action they will need to take to facilitate the exchange of information between service providers or the transfer of staff should the TUPE Regulations apply.
Other issues for consideration at the planning stage
9.68 At the planning stage, a public body should also consider:
- how the contract will be managed
- how the relationship between the public body and service provider(s) will be managed
- arrangements for reviewing the service
- how the procurement process will be evaluated
Some of these issues are considered in detail in the following chapters.
10. Stage 3 of the procurement process – do
10.1 This chapter highlights that the purpose of this stage of the procurement process is to implement the agreed procurement plan and to secure services that will deliver the identified outcomes for people who use those services and also their carers.
Communication with people who use services and their carers
10.2 Having finalised and agreed the procurement plan, a public body should communicate its intentions to people who use the services and also their carers/representatives. It is important that a public body provides clear and unambiguous information at this stage and that this information is tailored to the particular audience.
10.3 In these communications a public body should explain:
- how long it will take to decide who will provide the service
- what will happen at different times in the process
- how people who use the services and their carers will be involved in the process
- who will make the final decisions and how these will be made
- (where appropriate) why there may be a change in service provider
- how service provision may change as a result of the procurement process
A public body should also provide contact details for further information.
10.4 A public body should ensure that people who use services and also their carers have help to understand the process and what, if anything, they are being asked about. It should also ensure that these people have sufficient time to consider how they might be affected and to formulate their views before having to respond.
10.5 A public body should consider whether to hold an open day, or workshop, for potential service providers in order to provide additional information about their requirements and to explain how the procurement process will operate. This might not be possible in every procurement exercise because of the level of resource required, but where there is a market interest in the service this approach, where proportionate can be helpful to engage the market in innovative service redesign.
10.6 Electronic tendering enables a purchasing body to manage the procurement process online. It reduces the paperwork involved in tendering exercises, provides an electronic audit trail and allows a public body to provide a faster response to questions and points of clarification during the tender process.
10.7 A public body should ensure that potential service providers are given full instructions on how to access and respond to tender documentation online.
10.8 A public body should determine, at the planning stage whether they will broadly follow one of the procedures in the Public Contracts (Scotland) Regulations 2015 where a public body is competing a requirement for care and support services. A public body should then decide what procedure to follow. Further information on the procurement processes and tender procedures can be found in the Procurement Journey.
10.9 Details of the exclusion and selection process and the Single Procurement Document (SPD) can be found in the Procurement Journey.
Evaluation of tenders
10.10 Tender documentation should provide tenderers with background information about the services required, as well as setting out the detailed requirements. Tender documentation will typically comprise instructions to tenderers with the conditions to participate. Information on the tender process and evaluation of tenders can also be found in the Procurement Journey.
10.11 For the procurement of care and support services a public body should consider whether it is appropriate for people who use services and their carers to be involved in decision making, through, for example, participation in site visits and interviews with service providers or representation on the evaluation panel. The participation of these people must be consistent throughout the process. For example if they are involved in interviews with service providers, they must participate in all of the interviews arranged with service providers. Care must be taken, when involving people who use services and also their carers in the evaluation of tenders, to ensure that they:
- understand the evaluation process and are clear about their role in it
- understand the criteria against which tenderers are to be evaluated
- understand their obligation to be objective and impartial and to treat tenderers equally
- understand issues relating to the commercial confidentiality of service providers
- are able to commit the necessary time
- receive appropriate training and support
10.12 The involvement of people who use services and their carers in decision making should be considered on a case-by-case basis. It may, for example, be appropriate to involve them in the evaluation of tenders for the delivery of a discrete service for a small number of individuals.
Contract award decision
10.13 Specifically in relation to the procurement of care and support services, on the award of a contract or conclusion of a framework agreement, public bodies should communicate the outcome of the procurement exercise to people who use services and also their carers.
10.14 A service provider should notify people who use services of a cancellation of a care service's registration and any arrangements which are to be put in place to ensure that those who use its services and their carers receive an ongoing and similar service. It would be appropriate for this to be done in collaboration with the public body. A public body should also communicate the outcome of the procurement exercise to any existing service providers that have chosen not to tender.
10.15 A contract award notice must be published on PCS for regulated contracts and must be sent to the Find a Tender Service (or Tenders Electronic Daily where applicable) for contracts or framework agreements with a value equal to or greater than £663,540 no later than 30 days after the contract award or conclusion of the framework agreement. Where notices have been grouped it will be 30 days from the end of each quarter.
10.16 Full details of the evaluation process and contract award procedures can be found in the Procurement Journey.
10.17 It is important that this stage of the procurement process is managed successfully to ensure minimum disruption to people who use services and their carers. This will require close co-operation between different teams within a public body and between it and service providers.
10.18 This is particularly important where the outcome of the procurement exercise involves the transfer of an existing service to a new service provider. This is because there is some potential for the transfer process to be demanding and consume significant amounts of staff time. A public body should facilitate the transfer of accurate, up to date information to the new service provider and ensure that the handover arrangements are appropriate and fully implemented.
10.19 Service providers will need to satisfy the Care Inspectorate that it can adhere to the Public Services Reform (Scotland) Act 2010 and Regulations and also meet the relevant National Care Standards. The Care Inspectorate can take up to approximately six months to register a new care service. This depends on a range of issues, including provision of a competent application and the complexity of the service being provided.
10.20 Where an existing service provider seeks to deliver a new service under the existing registered care services, this should be discussed with the Care Inspectorate. It may be possible to vary the registration to include the new contract. However, consideration would need to be given to:
- the current conditions of registration
- the size of the service management and staff support arrangements
- client group and needs of those people who use services
- transferability of staff across the service
- staff skills and training
- the aims and objectives of the service
10.21 If a service provider applies to cancel its registration, it is legally required to state whether notice has been given to those people who use the services and their carers about the changes to its service and how their needs will be met if the application to cancel is approved by the Care Inspectorate. A public body should provide the necessary support and information to a service provider to enable it to meet its legal obligations.
10.22 A public body which is outsourcing a service or bringing a service back in-house will have to meet its legal obligations under the TUPE Regulations. It should, in all such cases, seek legal advice on application of the TUPE Regulations. In other cases involving the transfer of an existing service, a public body should consider whether it needs to take any action, for example to facilitate the exchange of information between service providers, should the TUPE Regulations apply.
The opening chapters of this part of the guidance describe the types of things that a public body may consider at key stages of a procurement exercise. Specifically, those chapters describe some considerations for attaching a value to a contract, contract duration, reviewing contracts, handling of transitional arrangements and communication with people who use services and their carers and also contract award.
Chapter 8 describes the specific public procurement rules that apply to health or social (and including care and support services) contracts. It highlights the rules that apply and at what levels. In doing so, it describes the circumstances where a public body may award a regulated contract with a value of £50,000 or more, but less than £663,450, for a care and support service without seeking offers and in accordance with section 12 of the Act.
Chapter 8 also makes clear that a public body should seek advice from legal and/or procurement specialists about the application of the procurement rules, as this will vary depending on the type and value of a contract.
Although not the main subject of this guidance, chapter 8 also briefly touches on the rules that apply to some other services (i.e. not principally health or social, or care and support, in focus) but that are subject to the 'light-touch' regime.
11. Stage 4 of the Procurement Process – Review
11.1 This chapter highlights the importance of reviewing the ongoing procurement process. A public body should ensure that appropriate arrangements are made for:
- managing the contract (or call-off contracts under a framework agreement)
- managing the relationship between the public body and service providers
- reviewing the service
- preparing for the end of the contract, including the possibility of early termination
Depending on the value and complexity of the procurement, a post-project review may be undertaken to consider any lessons learned and take these into account in any future planning. Further information on post project reviews can be found in the Procurement Journey.
Such arrangements should, in turn, inform the ongoing development of local commissioning strategies.
Managing the contract
11.2 The purpose of contract management is to:
- ensure that the service is delivered as agreed to appropriate quality standards and is providing value for money
- allow a public body to manage any risks which may impact on a service provider's ability to deliver the service, or to deliver it to the required quality
- ensure that the correct administrative procedures are followed, for example in the event of a change to the contract or to put into effect a price adjustment
11.3 Every contract for care and support services should be managed by a nominated member of staff ('contract management officer'). In a collaborative setting, public bodies should determine which public body will take the lead in managing the contract. A public body should ensure that there is clarity about the distinction between:
- contract management (the responsibility of the public body)
- service management (the responsibility of the service provider)
- the role of the care manager (who has overall responsibility for ensuring that the totality of care and support for an individual is achieving the desired outcomes)
11.4 Service specifications (which form part of the contract) should incorporate key performance indicators and describe the mechanism for measuring performance. In order to evaluate performance, public bodies should consider all potential sources of information on the delivery and quality of the service, including:
- views expressed by people who use services and also their carers in questionnaires, meetings and focus groups and through peer inspection (views of diverse groups of users should be heard, where possible, to ensure that the service is meeting diverse needs)
- reports submitted by a service provider
- self-assessment by a service provider
- meetings with service providers
- planned and unannounced visits
- feedback from their frontline staff
- the records of those who use services
- review of compliments, complaints and serious incidents
- information from the regulatory bodies, including inspection reports, complaints and enforcement
11.5 A public body should ensure that the approach adopted to reporting is proportionate and seeks to minimise demands on service providers for information about the delivery of the service. The frequency and level of reporting should be informed by a risk assessment and may increase in certain circumstances, for example if a complaint is made about the service. The reporting arrangements might be built into the service specification and/or the terms and conditions of a contract.
11.6 A public body should avoid duplicating information which is collected by and is available from the regulatory bodies. This can be achieved through the development of Memoranda of Understanding and regular discussions between the public body and the regulatory bodies. In some areas, contract management officers routinely attend the Care Inspectorate's post-inspection feedback sessions with service providers.
11.7 Contract management officers should present information gained through contract management in regular reports to senior managers. In order to fulfil their role, they should:
- prepare and issue reports summarising their actions, identifying any significant issues and detailing the conclusions that they have reached
- consider the consistency of their conclusions with those arising from the work of the regulatory bodies
- clearly identify the nature and grounds for any concerns and the action that is required to secure improvement
- consult service providers on the factual accuracy of all reports
- communicate regularly with service providers and ensure that emerging findings are discussed at an appropriate level within their organisations
11.8 Contract management arrangements should identify what will happen in the event that the service is not being delivered as agreed, or, the agreed quality standards are not being met. For example, these should describe the process for agreeing the necessary improvements (where appropriate, in discussion with the Care Inspectorate) to the service and the timescales that will apply. The contract itself should specify the circumstances in which the public body has a right to terminate the contract (for example, insolvency, service failure, loss of registration).
Relationship between a public body and service providers
11.9 The success of the relationship between a public body and service providers depends on the extent to which there is:
- mutual respect and trust
- a joint understanding of the roles played and challenges faced by each partner
- openness and excellent communications
- a joint approach to managing delivery
11.10 Managing the contractual relationship with service providers comprises a discrete set of responsibilities and activities and should be the responsibility of a nominated member of staff. A public body should consider how to ensure that:
- roles and responsibilities are clear
- relationships are equal and reporting arrangements are fair and proportionate
- the relationship is championed at senior levels in the public body and provider organisations
- information sharing is encouraged
- its processes do not duplicate those of the Care Inspectorate
- concerns about the relationship, from either party, can be discussed frankly
- the relationship allows for long-term strategic issues to be considered as well as issues relating to the day-to-day delivery of the service
This might be built into the service specification and/or the terms and conditions of the contract.
Reviewing a service
11.11 The purpose of a service review is to identify any improvements that need to be made to the care and support received by people who use services and their carers and/or to the service as a whole. Individual services should be reviewed at regular intervals to determine if the service is:
- meeting quality standards and delivering the right outcomes for people who use services and their carers
- responsive to current demand and potential future need
- in line with a public body's strategic objectives and those of its partners, as described in local commissioning strategies
- continuing to provide value for money
11.12 Service reviews for individual services should consider the quality of service delivery and any issues that the public body is aware of through managing the current contract. A public body should benchmark the quality and cost of the service against similar services and consider the extent to which different arrangements could achieve the desired outcomes. It should involve service providers and people who user services and their carers in identifying changes that would improve the way the service is delivered and the outcomes for people using the service.
11.13 A public body should work with the service provider to agree the actions required to implement the changes identified by the service review. These should be set out in an action plan which allocates responsibility for the agreed actions and the relevant timescales for their implementation.
11.14 A public body and the service provider should agree how information about the changes will be communicated to people who use services and their carers. If significant change is proposed, a public body should consider if it can be delivered under the current contractual arrangement. If 'material' changes are made to an existing contract, such as an extension beyond the advertised scope of the contract, the effect is to establish a new contract: (regulation 72 of the Public Contracts (Scotland) Regulations 2015). In this situation, a public body should determine if the service should continue to be procured from an external service provider and, if so (and subject to the value of the contract), whether or not the contract must be advertised and subject to competition.
11.15 A public body and a service provider should consider ways in which service improvement can be incentivised. Incentives can be provided through recognition of good outcomes for people who use services and their carers and positive reviews, both of which enhance a service provider's reputation.
Link to local commissioning strategies
11.16 Contract management and service reviews should, in turn, inform the ongoing development of strategic commissioning plans. Both should encapsulate the views of a public body, service providers and people who use services and their carers about existing arrangements for delivering the service and changes that could be made to improve outcomes for them.
12. Evaluating Procurement Activity
12.1 This chapter highlights the importance of evaluating a procurement exercise and scrutiny. A public body should evaluate each procurement exercise to determine what worked well and areas which could be improved in future procurement exercises. Its evaluation should consider:
- the difference (if any) in the quality of the service and outcomes for people who use services and their carers
- the total cost of the exercise to the public body, including staff costs
- the total savings achieved on contract value
- the effectiveness of their assessment (at the planning stage) of the benefits and risks to people who user services and service delivery
- the effectiveness of its communication with, and the involvement of, people who use services and their carers
- the impact of the exercise on people who use services and their carers
- the impact of the exercise on the market
- to what extent it helped to meet the requirements of the public sector equality duty
- the impact of the exercise on the workforce
- the learning for any future procurement activity
12.2 To inform its evaluation, a public body should collate feedback from all staff involved in the procurement process, other teams within the public body, service providers and people who use services and their carers.
12.3 A public body should refer to the Procurement and Commercial Improvement Programme which enables them to assess its procurement capability against common criteria and standards, to identify where best practice already exists and where improvements can be made.
12.4 Healthcare Improvement Scotland (HIS) is a statutory body, part of NHS Scotland, that works with healthcare providers to drive and support improvements in the quality of healthcare, and empower patients and the public. HIS does this through a combination of evidence-based standards and guidelines, a scrutiny and assurance approach, and quality improvement implementation support.
12.5 The Care Inspectorate regulates and inspects care services in Scotland to make sure that these meet the right standards. If services are found not to be good enough the Care Inspectorate will help them to improve. It offers advice, guidance and suggestions to help services reach the highest standards. The Care Inspectorate can issue recommendations for improvement and requirements for change and check these have happened. The Care Inspectorate wants to make sure services safeguard people, that these are well-managed, well-led and make a positive impact on people's lives, based on their needs, rights and choices.
12.6 As part of their wider powers the Care Inspectorate and Healthcare Improvement Scotland are able to scrutinise commissioning plans and make recommendations in its joint reports.
12.7 Audit bodies also have regard to a public body's compliance with procurement obligations.
These final parts of Section 2 describe those elements that a public body may consider at the review and evaluation stages of a procurement exercise.
That is, depending on the value and complexity of the procurement, stakeholders may wish to conduct a post-project review in order to consider any lessons learned and take these into account in any future planning.
Also, individual services should be reviewed at regular intervals to determine if the service is:
- meeting quality standards and delivering the right outcomes for people who use services and their carers
- responsive to current demand and potential future need
- in line with the public body's strategic objectives and those of its partners, as described in local commissioning strategies
- continuing to provide value for money