The Procurement Reform (Scotland) Act received Royal Assent on 17 June 2014. It sits alongside existing public contracts regulations, and will increase regulation for public bodies seeking to award contracts for works, services and supplies. The Act applies where contracts have a value of £50,000 or more, except works contracts where the threshold is £2m.

Most public bodies have, for many years, sought to include community benefits provisions in their procurement processes, as a way of using their purchasing power to benefit their local area, for example, by providing job and training opportunities to local people. The challenge has been successfully introducing community benefits provisions while complying with the procurement regulations and the core principles of equal treatment, non-discrimination and transparency.

The Procurement Reform Act defines 'community benefit requirements' as

"contractual requirements relating to training and recruitment or the availability of sub-contracting opportunities or which are otherwise intended to improve the economic, social and environmental wellbeing of the public body's area, in a way which is additional to the main purpose of the contract in question".

For the first time, procurement legislation obliges a public body to consider imposing community benefit requirements in contracts with a value of £4m or more. The Scottish Government is to issue guidance on the use of community benefit requirements, including:

• consultation that should take place before these are included in a procurement exercise
• information that must be included in a contract notice and award notice
• the circumstances where such requirements would be appropriate

The guidance is likely to be published in late 2015, and will be welcomed by public bodies. While such guidance is awaited, some helpful hints when including such provisions in a procurement exercise are:

• The process must be fair and transparent and should not simply exclude bidders who are not based locally
• There should be a legal and policy base for the community benefits provisions. Public bodies should consider having an internal policy which covers this
• Such provisions should be a prominent and well-considered feature from the commencement of a procurement exercise, and be included in the contract notice
• These provisions should be linked to the purpose of the contract, and bidders? responses to community benefit requirements should be judged objectively against contract award criteria

If you are embarking on a procurement exercise, ensure your process complies with recent procurement reform, please get in touch with one of our team.