Many of our clients come too late for procurement advice, as they have already received notice of a potential challenge under the procurement regulations. If you are about to embark on a procurement exercise you should ask the following at the outset:
1. What type of contract is it?
The procurement regulations apply to contracts for works, services and supplies. Although it seems easy to identify what constitutes 'work' that isn't always the case!
A good rule of thumb to follow is that maintenance of the fabric of a building, e.g. roofing, would be works, whereas maintenance of equipment, like central heating systems, would be a service. Some contracts that would seem to be works can also fall into the category of supply, e.g. where a contractor is employed under a window replacement contract to both manufacture and install the windows, this is likely to be a supply contract.
Determining the type of contract is important for deciding which thresholds apply, as discussed below.
2. Is the contract exempt from the procurement regulations?
Not all public contracts fall within the application of the regulations - there are numerous exemptions.
The most common relates to land acquisition. However, recent case law has shown that this exemption can be used too widely, and care must be taken to ensure that the contract is truly exempt.
3. What is the value of the contract?
The procurement regulations only apply to contracts with a value above a certain threshold:
Works: at the time of writing, the threshold is £3,927,260
Supplies/services: at the time of writing, the threshold is £156,442
Estimating a value can be difficult, and if there is any chance that it could exceed these thresholds, it should be advertised in accordance with the regulations.
4. What if the contract is below the thresholds?
It is a common misconception that a below threshold or exempt contract can be let without any procurement process.
Public bodies often have to meet other requirements and should check at the outset.
The guidance issued by the Scottish Government means that it's rare for contracts not to be advertised.
If you require any assistance in deciding how best to procure your contracts, please contact our procurement team, we would be delighted to help.
