Scottish Public Finance Manual

The Scottish Public Finance Manual (SPFM) is issued by the Scottish Ministers to provide guidance on the proper handling and reporting of public funds.


Procurement

Scope

1. This section gives general guidance on procurement and the use of the Electronic Purchasing Card (ePC) to all organisations to which the Scottish Public Finance Manual (SPFM) is directly applicable.

Background

2. ”Public Procurement" is the process where public bodies buy and manage the supply of goods, services and works from suppliers and supply chains. The procurement process begins when a need to buy something is identified and continues after the contract is awarded through effective contract management. It is often one element of a wider strategic commissioning process. Contracts must be awarded through genuine and effective competition unless there are exceptional reasons not to do so. All procurement activity should be focused on the delivery of value for money; conducted to high professional standards, in accordance with relevant guidance and to the relevant legal requirements; and overseen by appropriately trained and authorised staff. However, where a contract does not exist and there is a need to buy low value goods and services operational areas can use their ePC to purchase directly from the supplier in line with the requirements set out in the electronic purchasing cards (ePC) guide for public bodies.

Mandatory guidance

3. The Scottish Government (SG) Procurement Policy Manual provides guidance on the procurement policies that apply to Scottish Government (SG) procurement activity.  The manual also highlights some key legal obligations and considerations.  The manual is mandatory for core Scottish Government and any other body where their Framework document or other express agreement with SG specifies this manual is applicable. Executive Agencies and Non-Departmental Public Bodies (NDPBs) should follow the principles set out in the SG procurement policy manual, but may have different documented procedures and processes in place (e.g. in relation to NCA approvals, ePC procedures, records management systems, and DPA levels). We also strongly encourage other SG sponsored bodies to follow the principles of the Manual, and regardless, they should comply with  the Scottish Procurement Policy Handbook, which is applicable to the wider Scottish public sector.

4. The Scottish Procurement Policy Handbook is mandatory for all organisations that fall within the scope of the SPFM. The Handbook should be read in conjunction with the Procurement Journey (which provides a key source of guidance and documentation for the Scottish public sector and is updated on a continual basis with any changes in legislation and policy, facilitating best practice and consistency) and other guidance issued by SPCD, including Scottish Procurement Policy Notes (which provide updates on legal and procurement policy developments).

5. The Client Guide to Construction Projects and Construction Policy Notes are mandatory for all organisations that fall within the scope of the SPFM. The Client Guide to Construction Projects consists of three Handbooks: the Project Initiation and Business Case Handbook, the Construction Procurement Handbook and the Construction Handbook. This guidance is supplemental to the procurement guidance noted in paragraph 4 above and is designed to be specific to public sector construction projects.

6. The SG Consultancy Procedures is mandatory for core SG staff involved in the use of consultants.

Delegated Purchasing Authority

7. SPCD is responsible for the scheme of Delegated Purchasing Authority (DPA) within the core SG. Staff must not enter into a contract for goods, services and works and oversee the process leading up to and including the award of a contract and, any subsequent contract changes without the necessary written authority provided by the SG's Director, Commercial and Procurement. DPA is distinct from financial authority and other organisations to which the SPFM is directly applicable (including separate accounting entities within the Scottish Administration) should adopt procedures consistent with those in the core SG and set out in the Scottish Government (SG) Procurement Policy Manual.

Separation of duties

8. There should be clear separation of budgetary authority and procurement authority. Budget holders should have authority to commission orders by specifying their requirements and providing budgetary authority for the expenditure. The authority to purchase (DPA) and ultimately place that order should be in separate hands. In addition, there should be an appropriate separation of duties within the purchasing cycle between staff who place orders, those who receive goods, services or works and those who authorise payment. Separation of functions should be designed both to provide necessary safeguards against impropriety or unethical practice and to ensure achievement of value for money. For the avoidance of doubt, HOWEVER, staff in the core SG do not need DPA to be an ePC card user.

Contract Management Authority

9. Contract Management Authority (CMA) is the authority to manage a contract for goods, services and works after the contract has been awarded. It oversees the contract and supplier management process during the life of the contract. It enables buying organisations to manage contracts. Staff who have completed training and been awarded CMA status are known as Contract Managers (CMs).

CMA is:

  • required for managing contracts which have been awarded by a Delegated Purchasing Officer (DPA).
  • granted to permanent Scottish Government individuals, authorised in writing by the Director of Procurement and Commercial (or their nominated representative). This will be based on the business need and training/experience of the staff concerned. It will specify the value of contracts (excluding VAT) that the individual will be authorised to manage;
  • intended to allow directorates the opportunity to manage their appropriate contractual requirements within their local business area; and
  • personal to an individual only whilst they occupy their current position unless they are seconded to another post within the core Scottish Government to carry out their contract management role in that post. CMA does not automatically transfer to their successor should they leave their current post nor does it transfer with them to another post. If CMA is to be withdrawn by the Director, Commercial and Procurement for any reason this will be confirmed in writing.

CMA is not:

  • to be confused with financial/budgetary authority which is detailed in the Scottish Government Scheme of Delegation;
  • to be confused with Delegated Purchasing Authority (DPA) which is required to award or approve a contract. 

10. CMA is applicable for core SG but other organisations to which the SPFM is directly applicable (including separate accounting entities within the Scottish Administration) should adopt procedures consistent with those in the core SG and set out in the Scottish Government (SG) Procurement Policy Manual.

Use of consultants

11. The use of business and management consultants can only be justified where the required knowledge and expertise is not available in-house. The SG Consultancy Procedures are mandatory for core SG and should be regarded as relevant good practice guidance by all organisations to which the SPFM is directly applicable. Specific prior approval levels for the SG, SG Executive Agencies and SG sponsored bodies are set out in guidance from SG on the use of consultancy procedures.

Shared services

12. A Procurement Shared Service has been established for Central Government organisations’ in Scotland. Sharing services is a key theme of the Scottish Government’s strategy to make more efficient use of resources in the delivery of key objectives and outcomes. The Procurement Shared Service has been developed in conjunction with a number of Central Government organisations’ with the principles of collaboration and collective governance at its core. Three types of service have been developed:

  • The Fully Managed Service (FMS) provides comprehensive support on all aspects of procurement including tendering, contract management, policy and compliance;
  • The Fully Managed Service ‘Lite’ provides 5 days support, on all aspects of procurement to organisations with a low level of procurement spend; and
  • The Contracting Service operates on a call-off basis and is designed to provide assistance to organisations with individual procurement projects. It can also be utilised to cover gaps in capacity.
    If you are interested in finding out more information /signing up please contact Central Government Procurement Shared Services:
    Contracting Services Manager - Neil Stewart
    Fully Managed Service Manager - Sandra McLaughlin

Prompt payment

13. All invoices should be paid in accordance with the guidance on timing of payments in the section of the SPFM. Expenditure and Payments section of the SPFM.

Electronic Purchasing Card

14. The SG employs the Electronic Purchasing Card (ePC) to pay for low value goods and services where a contract does not exist and the transaction is less than £5,000 excluding VAT. The use of ePC provides an efficient and effective method of paying for goods and services and reduces the costs associated with the raising, authorising and receipting the large volume of low value Purchase Orders, invoices and payments. The policy regarding the use of the card is detailed in the electronic purchasing cards (ePC) guide for public bodies

Further guidance

15. Detailed guidance on procurement and related issues can be obtained from SPCD.

Links:

Scottish Government Procurement Policy Manual

Scottish Procurement Policy Handbook

Scottish Government Consultancy Procedures

Client Guide to Construction Projects

Construction Policy Notes

Scottish Procurement Policy Notes

Procurement Reform (Scotland) Act 2014: statutory guidance

Electronic Purchasing Card

Major Investment Projects

Procurement Journey [provides a key source of documentation for Scottish public sector which is updated on a continual basis with any changes in legislation and policy, facilitating best practice and consistency.]

 

Page Reviewed: September 2023

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