Scottish Government procurement: annual report 2024 to 2025

Annex C: Case Studies

The following case studies demonstrate how procurement activity during 2024–2025 delivered meaningful economic, social and environmental outcomes across Scotland and internationally. They highlight the practical ways in which the Scottish Government’s procurement approaches support the four national procurement outcomes, enabling improved value for money, innovation, Fair Work, sustainability, community wealth building and enhanced supplier engagement.

These examples reflect the breadth of our work, from major national frameworks to international development initiatives, and showcase how procurement continues to act as a strategic lever to deliver positive impact for people, places and communities.

Civil Engineering (Scotland) Dynamic Purchasing System and Framework Outcome themes: Good for Places and Communities | Good for Society | Good for Business and Their Employees | Open and Connected

1. Title of Case Study

Strengthening Scotland’s Civil Engineering Capability Through a National Framework and Dynamic Purchasing System

2. Summary

In 2024–2025, the Scottish Government launched Scotland’s first Civil Engineering (Scotland) Dynamic Purchasing System (DPS) for projects up to £5 million, building on the 2024 national Civil Engineering (Scotland) Framework for projects between £5 million and £100 million. Together, these mechanisms improve access for SMEs, drive sustainable construction practices and support the public sector’s transition to net zero.

3. Background

• Need/Challenge: public bodies across Scotland require a consistent, efficient and climate-aligned route to procure civil engineering works of varying scales. Existing processes were lengthy, variable and not always accessible for smaller suppliers.
• Procurement Approach: following the award of the national Civil Engineering Framework in March 2024 (projects £5m–£100m), the Scottish Government developed a complementary DPS covering projects up to £5m, ensuring full market coverage across six lots.
• Stakeholders: Scottish Government Collaborative Construction Team, Scottish Futures Trust (SFT), Transport Scotland, framework public bodies, industry bodies via Construction Scotland, SMEs and regional civil engineering suppliers.

4. Delivery and Implementation

• The DPS went live in December 2024, enabling suppliers to join at any time and widening access, particularly for SMEs. Within weeks, 29 suppliers had joined, 20 of which (69%) were SMEs, with more applications in progress.
• Four calls for competition were issued early in the reporting year and two contracts awarded, demonstrating rapid uptake and strong market engagement.
• A detailed Climate Change Plan was required from all applicants, ensuring alignment with Scotland’s net-zero and circular-economy commitments.
• Technical & Professional Ability Workbooks assessed suppliers’ environmental management, quality systems, health and safety, and capability. Financial Standing Workbooks ensured robust commercial assessment.
• Fair Work First compliance, including real Living Wage commitments, was embedded as part of onboarding.
• All applicants, including Directors and key decision-makers, undertook Serious Organised Crime checks via Police Scotland, providing additional assurance for public bodies.
• Public bodies were supported to integrate climate-related requirements into project-level Invitations to Tender, including expectations around carbon measurement, mitigation, materials selection, environmental protection and circular-economy practices.
• Framework suppliers agreed to provide consistent environmental KPIs including fuel use, energy consumption, water usage and waste-to-landfill reduction.

5. Outcomes and Impact

• The DPS provides faster, regionally accessible routes to civil engineering works, enabling local contractors to compete for public sector opportunities.
• Project-level requirements support reduced embodied carbon, improved resource efficiency and protection of local environments.
• The mechanism encourages community benefits, skills development and inclusive employment through Fair Work commitments.

• Requirements for Climate Change Plans and carbon reporting demonstrate how civil engineering procurement contributes to Scotland’s climate duties.
• The Framework and DPS support a whole-system transition to net zero, embedding environmental considerations at every stage of the project lifecycle.
• Collaborative engagement with SFT ensures projects are aligned with forward-looking infrastructure policy.

• The DPS significantly increases opportunities for SMEs by removing barriers associated with fixed-term frameworks.
• Suppliers benefit from early visibility of pipeline, improved consistency of requirements and fairer, clearer evaluation processes.
• Commitment to the real Living Wage and Fair Work principles ensures high-quality employment standards.

• Extensive collaboration with industry bodies, SFT, Transport Scotland and framework public bodies strengthened the design, implementation and continuous improvement of both mechanisms.
• The Scottish Government promoted the DPS and Framework at major events including Procurex, with further outreach planned for Meet the Buyer 2025/26.
• Integration with the Pipeline Forecast Tool helped identify a potential pipeline of 25 civil engineering projects valued at £600 million, strengthening market readiness.
• Quarterly and annual supplier meetings foster transparent performance discussions, shared learning and consistent reporting via balanced scorecards and KPIs.

Improving Transparency and Reducing Reliance on Cash Retentions in Construction Procurement Outcome Theme(s): Good for Society | Open and Connected | Good for Business and Their Employees

1. Title of Case Study

Enhancing Transparency and Reducing Retention Use Through Construction Policy Note (CPN) 1/2024

2. Summary

In 2024–2025, the Scottish Government strengthened transparency and commercial fairness in construction procurement through the implementation of Construction Policy Note (CPN) 1/2024. The policy requires public bodies to publish detailed information on their use of cash retention in construction contracts, supporting better visibility, improved sector-wide understanding, and progress toward the long-term ambition of reducing or eliminating retentions in Scotland.

3. Background

• The challenge: cash retentions have long been used in construction contracts as a mechanism to mitigate performance risk. However, inconsistent practice, limited visibility and financial pressures on contractors, particularly SMEs, highlighted the need for greater transparency and reform.
• Procurement approach: through CPN 1/2024, the Scottish Government introduced a new reporting requirement for all public bodies, mandating the publication of information on the level, use and release of retentions in their construction contracts.
• Key stakeholders: Scottish Government construction policy teams, public bodies commissioning construction works, suppliers and contractors, especially SMEs for whom cashflow is critical.

4. Delivery and Implementation

• Public bodies were required to collect, record and publish information on retentions in accordance with the new policy note.
• The Scottish Government supported implementation through guidance, stakeholder engagement and alignment with wider construction policy reforms.
• Transparency was promoted as a key driver for improving commercial practice, encouraging public bodies to consider alternatives to retentions and to strengthen contract management processes.
• Increased visibility of retention levels and release timescales enables consistent monitoring across the public sector and informs future policy development toward reducing reliance on retentions.

5. Outcomes and Impact

• Greater transparency helps address cashflow challenges for contractors, particularly SMEs, by supporting fairer and more predictable payment practices.
• Improved visibility encourages public bodies to adopt approaches that minimise financial risk to suppliers while maintaining robust contract assurance.

• Transparent reporting fosters accountability in how public money is managed within construction contracts.
• The policy supports improved commercial behaviours and strengthens trust between public bodies and industry.

• CPN 1/2024 promotes system-wide visibility of retention practices, enabling benchmarking, shared learning and sector-wide improvement.
• The transparency measures support the Scottish Government’s long-term ambition to reduce or remove the need for retentions altogether, aligning with broader construction procurement reforms and collaborative work with industry bodies.

Using the Civil Engineering (Scotland) DPS to Accelerate Geotechnical Works for the East Airdrie Link Road Outcome theme(s): Open and Connected | Good for Business and Their Employees | Good for Places and Communities

1. Title of Case Study

Accelerating Delivery and Enhancing Supplier Diversity Through the Civil Engineering (Scotland) DPS – North Lanarkshire Council

2. Summary

In early 2025, North Lanarkshire Council used the Civil Engineering (Scotland) Dynamic Purchasing System (DPS) to procure intrusive ground investigation works under Lot 4 – Geotechnical. The £1.2 million contract, awarded to Soil Engineering Geoservices Ltd, enabled essential early-stage data collection for the East Airdrie Link Road project. The Council reported exceptional support from the Scottish Government team and highlighted clear benefits of using the DPS.

3. Background

• Need / challenge: North Lanarkshire Council required time-critical geotechnical investigations to inform the design of the East Airdrie Link Road, a major infrastructure programme.
• Procurement approach: the Council selected the Civil Engineering DPS to enable a fast, flexible, competitive procurement route aligned with Scottish Government’s climate, commercial and supply-chain principles.
• Key stakeholders: North Lanarkshire Council, Scottish Government Collaborative Construction Team, Soil Engineering Geoservices Ltd, regional civil engineering suppliers, and local communities.

4. Delivery and Implementation

• The Scottish Government team provided exceptional support, with all queries answered promptly, enabling the Council to meet tight programme milestones.
• The tender was successfully published via PCS-T, and three viable bids were received, demonstrating healthy competition.
• The procurement incorporated the Graduated Pricing Mechanism (GPM), improving evaluation rigour and fairness.
• Supplier onboarding was managed thoroughly, ensuring only qualified suppliers progressed to bidding.
• Template permissions and system access were proactively handled to maintain programme pace.

5. Outcomes and Impact

• The DPS model enabled increased supplier access, including SMEs and specialist geotechnical firms.
• Competitive bidding helped secure an economically advantageous contract while supporting a diverse supplier ecosystem.

• The procurement supported delivery of a major infrastructure project expected to improve local and regional connectivity.
• Early geotechnical works provide the foundation for safe and sustainable road design.

Customer feedback confirmed that:

“The support provided by the Scottish Government team was exceptional and greatly appreciated… all questions were resolved in a timely manner, keeping our programme on target.”

North Lanarkshire Council also highlighted the broader benefits of the DPS approach:

• year-round supplier onboarding
• increased competition and innovation
• faster tender development and publication
• digital efficiencies
• transparent and standardised processes

These benefits demonstrate why the DPS is becoming a preferred route for civil engineering procurements across Scotland.

6. Quotes or Testimonials

Dorothy Balfour, North Lanarkshire Council:“The support provided by the Scottish Government team was exceptional and greatly appreciated. All questions were resolved in a timely manner… keeping our programme on target.”

Award-Winning Procurement: Delivering a National Water & Waste Water Framework with Sector-Wide Impact Outcome theme(s): Good for Business and Their Employees | Good for Places and Communities | Good for Society

1. Title of Case Study

Award-Winning Delivery of the National Water & Waste Water Framework

2. Summary

Late 2024, the Scottish Government’s NCPD Utilities Team won the GO Award for Best Procurement Delivery for outstanding work to procure and implement the new national Water & Waste Water Framework, which began on 1 April 2024. The framework has delivered significant financial, environmental and community benefits across Scotland’s public sector.

3. Background

• Need / challenge: public bodies required a national framework to deliver high-quality water services, secure competitive tariffs and drive sustainability improvements through water efficiency initiatives.
• Procurement Approach: a collaborative national procurement exercise was carried out, building on technical expertise, market insight and extensive sector engagement.
• Stakeholders: Scottish Government NCPD Utilities Team, Business Stream, public bodies across Scotland, subcontractors and delivery partners.

4. Delivery and Implementation

• The framework was awarded to Business Stream, headquartered in Edinburgh, supporting local employment and supply-chain activity throughout Scotland.
• The team’s approach emphasised value for money, sustainability, community benefit and ease of access for public bodies.
• The framework includes a Water Efficiency Fund, paid by Business Stream, which provides annual funding for efficiency projects across the public sector.
• Substantial community benefits were embedded, including modern apprenticeships, work placements and volunteering initiatives.
• The procurement was recognised nationally through the GO Best Procurement Delivery Award, reflecting excellence in planning, execution and impact.

5. Outcomes and Impact

• The framework supports Scottish jobs at Business Stream’s Edinburgh base and within its supply chain.
• Commercial certainty and transparent pricing help public bodies plan and control budgets more effectively.

• Water-efficiency measures have delivered £3.05 million in savings per year, reducing consumption and environmental impact.
• Public bodies benefit from the £100,000 annual Water Efficiency Fund, supporting infrastructure improvements and reducing costs.

• A range of community benefits have been delivered, including:
  • eight modern apprentices
  • multiple work placements and volunteer days
• These activities support skills development, inclusive employment and community participation.

• The framework delivers £23.4 million per year in cost-avoidance savings for the Scottish public sector.
• Strong commercial negotiation and tariff optimisation ensure ongoing value for money.

Heat in Buildings Scotland National Scheme – Managing Agent Contract Outcome theme(s): Good for Society • Good for Places and Communities • Good for Business and Their Employees

1. Title of Case Study

Delivering a Major National Scheme to Support Scotland’s Heat Transition and Reduce Fuel Poverty

2. Summary

The Heat in Buildings Scotland National Scheme is a flagship Scottish Government programme designed to reduce greenhouse gas emissions from homes and buildings and support households at risk of fuel poverty. Following a major competitive procurement exercise, a Managing Agent was appointed to deliver the scheme under a high-value, multi-year contract. The procurement embedded climate ambition, Fair Work, sustainability, innovation and long-term skills development to ensure that delivery contributes to Scotland’s net-zero transition and wider community outcomes.

3. Background

• Need / challenge: fuel poverty affects households unable to meet heating needs at a reasonable cost and has significant health impacts, particularly for vulnerable people. Key drivers include energy efficiency, household income, energy prices and patterns of energy use. The Heat in Buildings scheme aims to:
  • Reduce emissions from domestic properties by improving energy efficiency and deploying zero-emissions heating technologies.
  • Support households in, or at risk of, fuel poverty by removing poor energy efficiency as a key driver.
• The scheme also seeks to strengthen Scotland’s supply chain and skills base across all regions, align with Local Heat and Energy Efficiency Strategies (LHEES), improve housing quality, and support wider community benefits through training and employment.
• Contract details:
  • Requirement: Managing Agent for the Heat in Buildings Scotland National Scheme
  • Contract duration: 5 years plus option to extend for additional 2 years
  • Value: Up to £728 million
  • Route to market: Open Procedure

4. Outcomes and Impact

• The procurement was designed to support the development of Scotland’s supply chain and workforce capacity, including in rural and island communities. A standalone Sustainability and Community Benefits section of the Technical Specification required:
  • Support for SMEs, third-sector organisations and supported businesses;
  • Adoption of the PAS 2035 skills framework and national installer skills matrix;
  • Commitments to create new employment, training and green-skills opportunities;
  • Strong Fair Work First requirements, including real Living Wage commitments.
• A rigorous set of Selection Criteria included SPD 4C.7 (Environmental Management Measures), requiring bidders to submit a fully board-approved Climate Change Plan, ensuring only suppliers with strong environmental capability progressed.
• The Managing Agent also committed to:
  • Becoming an accredited net-zero carbon business by 2025;
  • Transitioning to a 100% electric fleet by 2025;
  • Eliminating fossil-fuel use in buildings;
  • Supporting all delivery-chain partners to achieve net zero by the end of the contract

• The contract embeds requirements to ensure Scotland’s communities benefit from the heat transition. This included:
  • Alignment with local LHEES Delivery Plans;
  • Proportionate, community focused Skills Development Plans:
  • Targeted investment in green skills and capacity in under resourced regions;
  • Broader community benefits, including vocational training and job creation
• The Technical Specification required contractors to demonstrate environmental management and heritage protection, waste-reduction measures, energy efficient operations and responsible use of materials across Scotland’s communities.

• The core aim of the Heat in Buildings Scotland National Scheme is to deliver cleaner, greener homes while addressing fuel poverty, helping reduce long-term inequalities associated with cold, inefficient housing. The procurement contributed to this societal mission by:
  • Embedding Scotland’s climate change targets directly into the Technical Award Criteria (including a 7% weighted Climate Emergency question);
  • Requiring measurable, monitorable commitments that support net-zero delivery;
  • Future-proofing the contract to enable new technologies and installation techniques;
  • Reducing carbon emissions through annual carbon-footprint reporting and the use of zero-emissions heating systems
• The appointed Service Provider will also offset any residual emissions until net-zero is achieved, contributing to a fair, sustainable equitable heat transition.

6. Monitoring and Reporting

• Delivery is monitored through a Monthly Performance Report which covers all contractual KPIs and sustainability commitments. Monthly Performance Review Meetings include standing agenda items on Sustainability and Climate Emergency, ensuring transparent oversight and continuous improvement throughout the life of the contract.

7. Further Information

Video Case Study

Heat in Buildings National Scheme (opens on Vimeo)