PROCUREMENT Contents: Scope Key Points Background Mandatory Guidance Delegated Purchasing Authority Separation of Duties Use of Consultants Prompt Payment Further Guidance
Scope
1. This section gives general guidance on procurement to all organisations to which the Scottish Public Finance Manual (SPFM) is directly applicable.
Key Points 2. "Procurement" is the process of buying goods, services and works from external suppliers. The procurement process begins when a need to buy something is identified and will generally end after the contract is awarded. Contracts must be awarded through genuine and effective competition unless there are exceptional reasons to the contrary. 3. Delegated Purchasing Authority (DPA) is distinct from financial authority and other organisations to which the SPFM is directly applicable should adopt procedures consistent with those in the core Scottish Government (SG). 4. There should be clear separation of budgetary authority and procurement authority. 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. 5. The SG Consultancy Procedures should be regarded as relevant good practice guidance by all organisations to which the SPFM is directly applicable. 6. All invoices should be paid in accordance with the guidance on timing of payments in the Expenditure and Payments section of the SPFM
Background 7. "Procurement" is the process of buying goods, services and works from external suppliers. The procurement process begins when a need to buy something is identified and will generally end after the contract is awarded. Contracts must be awarded through genuine and effective competition unless there are exceptional reasons to the contrary. All procurement activity should be focussed 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.
Mandatory Guidance 8. The Scottish Government (SG) Procurement Policy Manual provides guidance on the rules that apply to core SG staff who are involved in procurement activity. Adherence to the policies set out in this manual is mandatory for core SG staff, and for any other entities (e.g. relevant SG Executive Agencies and SG sponsored bodies) whose procurement is managed by the Scottish Procurement and Commercial Directorate (SPCD) on a shared service basis. 9. The Scottish Procurement Policy Handbook is mandatory for all other organisations that fall within the scope of the SPFM. The Handbook should be read in conjunction with the Procurement Journey (a toolkit providing practical guidance on procurement procedures) and other guidance issued by SPCD, including Scottish Procurement Policy Notes (which provide updates on legal and procurement policy developments). 10. The Construction Procurement Manual (managing or delivering construction / works projects) is mandatory for all organisations to which the SPFM is directly applicable. 11. The SG Consultancy Procedures is mandatory for core SG staff involved in the use of consultants.
Delegated Purchasing Authority 12. 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 SG Procurement Policy Manual.
Separation of Duties 13. 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.
Use of Consultants 14. 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 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 as follows: - SG: contracts up to £10,000 approved by a Deputy Director, between £10,000 and £50,000 approved by the relevant Director General and over £50,000 approved by the Cabinet Secretary for Infrastructure and Capital Investment, and Cabinet Secretary for Finance, Employment & Sustainable Growth.
- SG Executive Agencies: contracts up to £10,000 approved by a member of the senior management team, between £10,000 and £50,000 approved by the Chief Executive and over £50,000 by the Cabinet Secretary for Infrastructure and Capital Investment and Cabinet Secretary for Finance, Employment & Sustainable Growth.
- SG sponsored bodies: contracts over £100,000 require the prior approval of the Cabinet Secretary for Infrastructure and Capital Investment, and Cabinet Secretary for Finance, Employment & Sustainable Growth. (Exceptions are Scottish Enterprise and Highlands & Islands Enterprise where the Chief Executives approve all consultancy contracts.)
Prompt Payment 15. All invoices should be paid in accordance with the guidance on timing of payments in the Expenditure and Payments section of the SPFM.
Further Guidance 16. 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 Construction Procurement Manual Major Investment Projects Procurement Journey [A toolkit providing practical guidance on procurement procedures.]
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Page Published / Updated: September 2011 |