Ethical Procurement

Jo MitchellScottish Government

Public procurement is a powerful driver of development. In addition

to providing goods and services a country needs, the act of

procurement itself can strengthen local economies, support

marginalized groups and boost local capacity for commerce

Ban Ki Moon

Eighth Secretary-General of the United Nations

Existing Legislation – Public Contracts Regulations (Scotland) 2012

Conditions for performance of contracts

39. (1) A contracting authority may stipulate conditions relating to the performance of a public contract, provided that those conditions are compatible with EU law and are indicated in— (a)the contract notice and the contract documents; or .(b)the contract documents. .(2) The conditions referred to in paragraph (1) may, in particular, include social and environmental considerations.

Sustainability

CostQuality

Improving supplier access to

public contracts

Maximising efficiency

and collaborati

on

Embedding sustainability in all we

do

Delivering savings and

benefits

The Scottish Model Of Procurement:

Vision: Through the Scottish Model of Procurement, to be world leaders in innovative public procurement, enabling the best outcomes for Scotland

Content of the Bill as introduced to Parliament

Duties Proposed Measures1. Treat relevant

economic operators equally and without discrimination and act in a transparent and proportionate manner

2. Comply with the sustainable procurement duty

1. Publish Procurement strategy and report against it annually

2. Publish Contracts Register3. Consider Community Benefits – for all major contracts4. Regulations about the use of technical specs5. Prohibit charging for participation in procurement process6. Use a standard and proportionate pre qualification questionnaire

7. Publish advert and award notices8. Exclusion of bidders9. Climate Change (Scotland) Act 2009 – amendment re recycled and recyclable products

10. Debriefing of unsuccessful biddersREMEDIES

Procurement Reform (Scotland) Bill

SFTF Civil Priorities for the Procurement Reform Bill

1. Statement of IntentExpect Bill to include a statement to embed sustainable and ethical considerations at the heart of the procurement process:

Aim of the BillTo establish a national legislative framework for sustainable public procurement that supports Scotland's economic growth by:• delivering social and environmental benefits including community 

benefits, • supporting innovation and • promoting public procurement processes and systems which are 

transparent, streamlined, standardised, proportionate, fair and business-friendly.

SFTF Civil Priorities for the Procurement Reform Bill

2 Enshrining SustainabilityTo provide clarity and focus for use of the term ‘sustainable procurement’

Sustainable Procurement Duty:(a) before carrying out a regulated procurement, to consider how in conducting the procurement process it can—

(i) improve the economic, social, and environmental wellbeing of the authority’s area,(ii) facilitate the involvement of small and medium enterprises, third sector 10 bodies and supported businesses in the process, and(iii) promote innovation, and

(b) in carrying out the procurement, to act with a view to securing such improvements

SFTF Civil Priorities for the Procurement Reform Bill

3. Reducing greenhouse gas emissionsReflecting duty upon all public bodies to contribute to meeting emissions targets under Climate Change (Scotland) Act 2009

The procurement strategy must, in particular… (iii) be carried out in compliance with its duties under section 8,

(A contracting authority must, in carrying out a regulated procurement— (a) treat relevant economic operators equally and without discrimination,(b) act in a transparent and proportionate manner; and

the Sustainable procurement duty)

SFTF Civil Priorities for the Procurement Reform Bill

3. Reducing greenhouse gas emissions cont’d

Amendment of Climate Change (Scotland) Act 2009(1) The Scottish Ministers may by regulations require specified contracting authorities to ensure that—(a) a specified proportion of the goods or works procured by or on behalf of the authorities, or(b) a specified proportion of the materials used in the production, provision or construction of goods, services or works so procured, fall within subsection (2).(2) Something falls within this subsection if—(a) it has been used already (including where it has been refurbished since that use),(b) it has been remanufactured, or (c) it is designed to be repaired, reused, refurbished, remanufactured or recycled.

SFTF Civil Priorities for the Procurement Reform Bill

4. Person-centred ProcurementDifferentiate between buying ‘things’ and buying ‘services’ in line with Christie Commission – ‘services for people’

Procurement of Care and Support Services• Guidance on the procurement of care and support services was jointly 

developed by the Scottish Procurement and the Joint Improvement Team (JIT) in consultation with representation from all interested parties (September 2010)

• The guidance was developed in recognition that the procurement of care and support services requires special consideration within a public body's overall approach to the procurement of goods, works and services. 

http://www.scotland.gov.uk/Topics/Government/Procurement/policy/SocialCareProcurement

SFTF Civil Priorities for the Procurement Reform Bill

4. Person-centred Procurement cont’d

EU Procurement DirectiveThe distinction between Part A and Part B Services has been removed, and a new light-touch regime introduced for social and health and some other services. There will be OJEU advertising and other specific obligations for this new light-touch regime, but a much higher threshold has been agreed (EUR 750,000)

SFTF Civil Priorities for the Procurement Reform Bill

5 Scottish Living WageThe Scottish living wage should be promoted outwith the public sector through procurement; and,9 Employment StandardsProcurement should be used to drive up employment standards

The Scottish Ministers may issue guidance about the selection of economic operators …(2) The guidance may, in particular, cover…(b) the matters relating to the recruitment and terms of engagement of persons involved in producing, providing or constructing the subject matter of the regulated procurement that are to be taken into account in assessing the suitability of an economic operator.

SFTF Civil Priorities for the Procurement Reform Billill

6 BlacklistingCompanies that engage in the practice of blacklisting employees should be excluded from public contracts7 Tax DodgingProcurement should be used as part of stronger efforts to tackle tax dodging and tax avoidance, both at home and in developing countries

SFTF Civil Priorities for the Procurement Reform Bill

The Scottish Ministers may by regulations make further provision about the selection by contracting authorities of economic operators to participate in the process relating to a regulated procurement (other than an EU-regulated procurement) including, in particular, provision about—a) the use of minimum standard

requirements to assess the suitability of economic operators in relation to a regulated procurement,

b) the circumstances in which an economic operator may or may not be excluded on the basis of criteria specified in the regulations, 

c) the procedure that is to be followed in determining whether or not to exclude an economic operator.

Without prejudice to the generality of subsection (1)(b), criteria which may be specified 30 in the regulations include— (a) that— the economic operator, (ii) a director, secretary, office-holder or partner of the economic operator, or (iii) another person having powers of representation, decision-making or control 35 in relation to the economic operator, has been convicted of an offence,

(b) that the economic operator has failed to comply with— (i) an obligation to pay tax, or(ii) another statutory duty (other than by committing an offence) specified in the regulations, (c) that the economic operator has committed an act of misconduct of a kind specified in the regulations,

SFTF Civil Priorities for the Procurement Reform Bill

8 Ethical and Fair TradeEthical and responsible trading policies have the potential to transform lives around the world.

Existing Regulations – Paragraph 39 Public Contracts (Scotland) Regulations 2012

United Nations Guiding Principles - UK companies should undertake to respect human rights wherever they operate

SFTF Civil Priorities for the Procurement Reform Bill

8 Ethical and Fair Trade cont’d

New Procurement DirectiveNew rules on social and environmental issues – clarification that the means of production can be considered, that “eco labels” can be required and “social” has been added to the list of permitted award criteria

Procurement Reform (Scotland) BillSustainable Procurement Duty; and,

Technical SpecificationsThe Scottish Ministers may by regulations make provision about the use of technical specifications in regulated procurements (other than EU-regulated procurements).(2) In this section, a technical specification is a specification which defines required characteristics of—(a) goods, services or works,(b) the way in which the goods, services or works are to be produced, provided or constructed,(c) any process relating to another stage in the life cycle of the goods, services or works.

SFTF Civil Priorities for the Procurement Reform Bill

10. Promoting Positive Social Outcomes

‘We would begin to change the way public money is used in Scotland’

SFTF Civil Priorities for the Procurement Reform Bill

Promoting Positive Social Outcomes cont’d‘We think that, where good practice exists, the bill will not have a huge effect – some people already do a lot of the things that are intended by the bill… I have a very positive view of a lot of the good practice that exists’

Barry White, Scottish Futures Trust, 6th November 2013

SFTF Civil Priorities for the Procurement Reform Bill

Promoting Positive Social Outcomes cont’d1. Community Benefits – across all sectors and spendse.g. Bull Stud Refurbishment; Domestic Furniture and Furnishings including White Goods Framework; Southern General Hospital; Glasgow Housing Association2. Public Social Partnerships e.g. Glasgow PSP to develop optimum approach to Self-Directed Support; Reducing Reoffending PSP – Low Moss3. National Supported Business Framework , 4 lots - Furniture and associated products; Document management; Textiles/personal protective equipment (PPE) and Signage

SFTF Civil Priorities for the Procurement Reform Bill

Promoting Positive Social Outcomes cont’d

Procurement Reform (Scotland) Bill:Sustainable Procurement Duty;Community Benefits;Guidance on workforce matters;Technical Specification;Amendments to the Climate Change (Scotland) Act 2009.

Our next steps

• Support the proposed Bill though the Parliamentary process

• Implement the Legislation when agreed / support policy areas in maximising the Bill

• Meanwhile, other strands of work are being taken forward through the public procurement reform programme to improve the way the procurement system operates in Scotland

Procurement Reform (Scotland) Bill

http://www.scotland.gov.uk/Topics/Government/Procurement/policy/ProcurementReform

Questions?