Public procurement - reserving contracts for qualifying organisations: SPPN 2/2026

Purpose

This note should be read alongside SPPN 1/2025 (Reserving contracts for supported businesses) and provides advice on reserving contracts for certain health and social care services to qualifying organisations.

SPPN status

This SPPN is not to be construed as legal advice or a substitute for such advice and should not be read as such. Contracting authorities should seek their own legal advice in relation to any questions and issues they may have.

Key points

This note contains information regarding the following: 

• background and definition of a qualifying organisation

• identifying qualifying organisations 
• services for which contracts can be reserved for qualifying organisations 
• action required to ensure organisations remain compliant with legislation 

Background and definition of a qualifying organisation

The ability for contracting authorities to restrict participation in a tender exercise for health and social care services to qualifying organisations is a new power. The power is conferred by section 16 of the Care Reform (Scotland) Act 2025, which inserts a new regulation 76A (Reserved contracts for certain services) into the Public Contracts (Scotland) Regulations 2015 (“the 2015 Regulations”). 

Regulation 76A of the 2015 Regulations states:  

A contracting authority may reserve to qualifying organisations the right to participate in procurements for the award of a public contract or framework agreement exclusively for a service, or more than one service, from a list of specified categories. 

Regulation 76A(5) defines a qualifying organisation as follows:

(a) an organisation must exist solely to provide benefits for society or the environment. It is the responsibility of the contracting authority  to determine whether a bidding organisation has demonstrated the requirement that it exists solely to provide benefits for society or the environment. 

(b) the definition requires that the organisation is neither-

1.  established by an enactment, nor
2.  subject to control by a person established by an enactment.

(c) the organisation’s profits (if any) must not be expended except by way of-

1. reinvestment with a view to providing the benefits for society or the environment that the organisation exists to provide, or
2. distribution to the community that the organisation exists to provide benefits to.

Organisations will need to meet all parts of the definition to be considered a qualifying organisation for the purposes of reserved contracts for the services specified in regulation 76A(4)(c). In practice, qualifying organisations will include (but may not be limited to) charities, voluntary organisations, social enterprises, and registered social landlords, but will not include other public sector organisations, agencies, or non-departmental public bodies. Buyers should conduct due diligence to determine if organisations meet the three-part definition. 

Buyers should also note that this three-part definition defines qualifying organisations solely for the purposes of procurements to which regulation 76A applies. This does not change the existing definition of a third sector organisation laid out in the Procurement Reform (Scotland) Act 2014 (“the 2014 Act”) with regard to the Sustainable Procurement Duty.

When exercising the power to reserve contracts under regulation 76A, contracting authorities should act in accordance with the principles of procurement, as laid out in regulation 19 of the 2015 Regulations, treating economic operators equally and without discrimination, and acting in a transparent and proportionate manner.

Identifying qualifying organisations 

Buyers should carry out market research as part of their sourcing strategy to proactively determine whether their particular regulated procurement exercise is suitable to be tendered under reserved contract procedures. There are a number of ways in which a buyer might go about doing so. 

The Office of the Scottish Charity Regulator (OSCR) publishes and maintains the Scottish Charities Register, considers applications from organisations seeking to become charities, and monitors charities and their work to encourage their compliance with the Charities and Trustee Investment (Scotland) Act 2005. Buyers can consult the Scottish Charities Register to determine whether a Scottish organisation is a charity. For charities based in England and Wales, buyers can consult the UK Charity Commission's register of charities, and for Northern Ireland, the Charity Commission for Northern Ireland.

Buyers may also wish to conduct checks via other relevant organisations including the Office of the Regulator for Community Interest Companies (CIC), Scottish Council for Voluntary Organisations (SCVO), Financial Conduct Authority (for cooperatives) and the Scottish Housing Regulator.

Organisations should be able to self-identify as qualifying organisations where they meet the three-part definition, and should be able to provide relevant evidence to support this. Supporting evidence may include membership or registration with the aforementioned regulators and authorities, and/or reference to the organisation's annual published accounts, Articles of Association, Governing Document, or other such constitutional documentation that governs the organisation.

The Scottish Government's official national portal for advertising public sector contract opportunities, Public Contracts Scotland (PCS), allows buyers to search specifically for third sector organisations that could possibly deliver their contract. Buyers should note that this functionality is based upon the definition of a third sector organisation laid out in the 2014 Act with regard to the Sustainable Procurement Duty, and as such, caution should be exercised when considering its use for procuring the services which can be reserved for qualifying organisations under regulation 76A.

It is important to note that PCS relies on organisations self-declaring whether they are a third sector organisation, and therefore does not constitute evidence in its own right that a supplier is a qualifying organisation in terms of the legislation. Buyers will need to carry out their own due diligence to satisfy themselves the definition has been met. 

Services for which contracts can be reserved for qualifying organisations

The CPV codes for the services for which contracting authorities are able to restrict participation in a tender exercise to qualifying organisations specified in regulation 76A(4)(c) as follows:

• 75200000-8 - Provision of services to the community
• 75231200-6 - Services related to the detention or rehabilitation of criminals
• 75231240-8 - Probation services
• 79611000-0 - Job search services
• 79622000-0 - Supply services of domestic help personnel
• 79624000-4 - Supply services of nursing personnel
• 79625000-1 - Supply services of medical personnel
• codes in the range beginning with 85000000-9 and ending with 85323000-9, covering health and social work services
• 98133000-4 - Services furnished by social membership organisations
• 98133100-5 - Civic betterment and community facility support services
• 98200000-5 -  Equal opportunities consultancy services
• 98500000-8 - Private households with employed persons

Codes in the range beginning with 98513000-2 and ending with 98514000-9, covering home help, household, and domestic services.

Regulation 76A(7) confers upon Scottish Ministers the power to change this list of CPV codes (as well as the meaning of qualifying organisation). Buyers should therefore check for any future amendments to regulation 76A or subsequent SPPNs on this subject. 

Action required to ensure organisations remain compliant with legislation

Contracting authorities should familiarise themselves with the services provided by qualifying organisations and consider, when planning a procurement exercise, if a contract or framework agreement (or a lot within a framework agreement) could or should be reserved. This will be a local decision, which should be made with regard to a range of responsibilities including the Sustainable Procurement Duty, ethical commissioning and procurement principles (currently in draft as per SPPN 7/2021), and the benefits of a mixed market approach to health and social care delivery.

Dissemination

Please bring this SPPN to the attention of all relevant staff, including those in agencies, non-departmental public bodies and other sponsored public bodies within your area of responsibility.