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Scottish procurement reforms would create new duties for contracting authorities, says expert


Proposed changes to the Scottish public procurement regime would create new court-enforceable "social, economic and environmental" duties for contracting authorities, an expert has said.

The Scottish Government has said that the Procurement Reform (Scotland) Bill will make it easier for small Scottish businesses to bid for public contracts. However procurement expert Jamie McRorie of Pinsent Masons, the law firm behind Out-Law.com, said that the proposals would create new challenges for procuring authorities.

"One of the key challenges faced by those engaged in public sector purchasing is procuring in a way which also delivers social, community or environmental benefits," he said.

"The Bill proposes that contracting authorities will now have a 'sustainable procurement duty'; meaning that they must consider how their procurement can benefit the social, economic or environmental wellbeing of that area, or how that procurement would benefit SMEs or support innovation. This is a potentially far-reaching duty and, given that it is enforceable in the courts, will have to be one that all procurement practitioners need to be aware of," he said.

The Procurement Reform Bill would establish a national legislative framework for the way in which the public sector in Scotland buys goods, work and services. It would be backed by enabling powers, allowing the Scottish Government to make regulations governing how public bodies would assess the suitability of companies to bid for public contracts; and statutory guidance to encourage good employment practices by contractors by allowing issues such as the use of zero-hours contracts to be considered as part of a suitability assessment.

The Bill would introduce a general duty for public bodies to conduct procurement in an effective and proportionate manner, for the particular benefit of smaller and third sector businesses. In addition, the new laws would seek to deliver "economic, social and environmental benefits" through the creation of a 'sustainable procurement duty' to be imposed on contracting authorities. The Bill also proposes substantial expansion of the use of so-called 'community benefit clauses' in higher value contracts to help promote training, apprenticeships and opportunities for disabled people and the long-term unemployed.

"Changes to public procurement rules will ensure Scotland retains its place as a world leader in public procurement reform, promoting an approach that is both business-friendly and socially responsible," said Nicola Sturgeon. "The Bill will provide a national legislative framework for sustainable public procurement, ensuring that we maximise the economic benefit brought to Scotland from effective and efficient public procurement spend."

"Scotland has one of the highest levels of public procurement spend on SMEs in the EU. The Bill will build on and secure that success and continue to make it easier for SMEs to find and compete for public sector contracts," she said.

The public sector in Scotland spends over £9 billion every year, with over 45% of this spending in 2011 with small or medium-sized businesses, according to the Scottish Government's figures. As these businesses only account for 37% of Scotland's turnover, this puts Scotland in the company of four EU member states in which small businesses have greater access to public contracts above EU thresholds than their significance in the wider economy would suggest, according to figures in last year's consultation on the creation of a procurement reform bill.

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