Public procurement - views and experiences: research

5. Conclusions

The purpose of this research was to gain insight into the views and experiences of third sector organisations and new private businesses in relation to public procurement in Scotland, and to help inform future thinking and next steps around the delivery of public procurement by providing a snapshot of recent experiences which provides useful learning for future developments.

The views and experiences of third sector organisations and new private businesses participating in the research were generally consistent. Experiences tended to be similar across these two groups and were more likely to diverge based on the size of organisation rather than the type. Likewise, experiences did not differ much between organisations operating in different geographical areas or across different business sectors other than in relation to very specific issues such as contractual rates; or good practice being highlighted in relation to some local areas. Views among stakeholder organisations consulted during the research were also very consistent with those of the third sector organisations and new private businesses. Across the board, there was a high degree of consensus about the improvements that needed to be made.

The messages coming out of the research were clear. There remains a keen interest amongst third sector organisations and new private businesses in participating in Scottish public procurement. Research participants were able to identify significant benefits of contracting with the public sector, including financial security, favourable payment terms and access to interesting and unique opportunities. Those that are already active participants (on the whole) wish to continue to bid for public contracts, and among those organisations that had not bid for contracts in the past five years there was a keenness to become involved if barriers could be removed or reduced.

Among stakeholders, there was recognition that Scottish Government and the wider public sector have made significant progress in relation to procurement in recent years and there has been continuous improvement and a willingness to drive forward change. However, participants also voiced concerns that this does not always translate down to improvements in implementation at a local level. Organisations representing new private businesses reported that, in their view, despite the implementation of the Sustainable Procurement Duty, the dial has not moved in terms of the value and share of contracts going to SMEs. Meanwhile, the feedback in relation to third sector organisations is that their share of contracts has increased, but not sufficiently quickly.

Action to address the requirements of the Sustainable Procurement Duty in individual procurements is improving but feedback received during this research indicated that there is much work still to be done to improve access for third sector organisations and new private businesses, particularly smaller charities and SMEs. Public sector organisations should move away from structures and processes that treat procurement as a separate function – and procurement departments need to be involved in discussions about contracts well ahead of these getting to the stage of tender briefs being developed. Procurement should be seen as a lever that can contribute to desired policy and practice changes.

It was very clear from the research that there remain significant barriers to the participation of third sector organisations and new private businesses in Scottish public procurement which are being encountered across sectors and geographies. Barriers were highlighted by all participating organisations but seemed to affect small to medium–sized organisations most significantly.

The main barriers to participation included:

• lack of capacity, particularly within small organisations, to participate in procurement processes
• complex procurement processes that require information to be provided that is not proportionate to the contract value
• central procurement systems that are difficult to use
• insufficient early market engagement with potential bidders
• lack of transparency in relation to short-listing of suppliers
• ineffective assessment processes
• insufficient lotting of contracts
• ineffective use of framework agreements
• lack of feedback from public bodies
• short duration of contracts
• low contract value
• onerous terms and conditions
• lack of a robust appeals process for lower value contracts
• conflicts of interest
• buyer and supplier preconceptions.

There remains a need for external organisations to ensure that continued support and guidance is in place for third sector organisations and new private businesses that are interested in bidding for public sector contracts, either on their own or as part of a consortium of bidders. There is also a demand for practical support to build capacity and confidence to participate in public procurement. Such support needs to be sustainably and adequately resourced.

Relationships are seen to be key to good procurement – with less risk aversion and more pragmatic conversations between buyers and suppliers seen as central to this. Research participants reported that national, regional and local conversations are needed – and some highlighted that this is particularly important in relation to legislation on community wealth building. Participants were also keen to see earlier market engagement and better use of tools and flexibilities available.

Research participants identified a number of key enablers to participation which included simple, consistent tendering processes with proportionate terms and conditions; capacity building and effective training and advice for suppliers; improved, user-friendly and streamlined procurement solutions; strong relationships between suppliers and buyers; an independent appeals process for lower value contracts; relevant and timely feedback; and lotting of contracts and more extensive use of frameworks and Quick Quotes.