Annual Procurement Report 2023-24

AiB ensures achievement of all mandatory requirements stated in Section 15(5) of the Procurement Reform (Scotland) Act 2014 for all regulated procurements.

The below describes the actions to achieve compliance, the extent of any non-compliance for any regulated tenders and how compliance will be assured in future iterations.

Section 15(5)(a)(i) - Regulated tenders will contribute to the carrying out of AiB functions and achievement of its purposes

All AiB procurements are mapped on a procurement pipeline. This pipeline is managed by AiB Procurement team and spans a two-year period.

Our team:

• ensure that all tenders support the AiB function and purpose and that each procurement exercise is managed effectively to ensure service continuity
• produce an annual procurement strategy detailing the commitments and supporting actions that will be undertaken by the procurement team over the coming financial year to support the AiB mission
• provide a monthly update for the Senior Management Team meeting with interim weekly updates where necessary
• provide wider updates for staff via internal communications

An procurement policy was introduced to open non-regulated procurement ability to select AiB staff. This was supported by the development and delivery of non-regulated procurement and contract management training by the procurement team.

Assurance and information checklists have also been introduced to support staff in running a compliant procurement process. These are subject to audit by the team to identify further training requirements.

Section 15(5)(a)(ii) - Regulated tenders will deliver value for money

All regulated tenders require formation of a user intelligence group (UIG) to develop a procurement strategy and tender documentation. The procurement strategy is used to document the requirement, any market research, supplier engagement and decisions to support the procurement route.

All procurements are tendered with an appropriate price/quality ratio fitting the requirements commodity type, complexity and business impact. This ensures that appropriate emphasis is given to price or quality for each procurement, thereby aiding attainment of value for money.

Procurement challenges each specification to ensure the terminology, phraseology and specification type maximises competition and (where appropriate) invites innovation. The procurement team are currently developing specification training which will be delivered to UIG prior to specification development meetings. This is to increase the commercial awareness of wider AiB staff and further generate robust discussions and challenges.

A tender report is produced for all competitive procurements. This details the tender process, scoring criteria and resultant outcome based on the most economically advantageous tender methodology. Any savings and benefits, community benefits and/or sustainability and environmental benefits are also detailed.

Lessons learned are captured as part of the tender report and then considered upon commencement of the next tender iteration. This helps achieve added value through process improvement.

Section 15(5)(a)(iii) - Regulated tenders will be carried out in compliance with the General Duties under Section 8

All regulated tenders require formation of a UIG to develop a procurement strategy and tender documentation. Each UIG is formed from suitably qualified and experienced personnel from across AiB and the wider Scottish Government where required.

All UIG members are required to sign a conflict of interest and declaration of impartiality statement prior to any procurement involvement to ensure fairness and transparency throughout the procurement process.

Each UIG is led by a procurement professional who is responsible for ensuring the procurement process embodies fairness and transparency at every stage.

All tender evaluation panels are provided with tender evaluation training. Refreshed training is delivered to applicable staff every two years. Tender evaluations are followed by a moderation meeting. This is led by the UIG procurement professional who will ensure that all tenders have been evaluated consistently, fairly and without discrimination.

AiB advertise and manage tender opportunities via Public Contract Scotland. Where the higher value procurement threshold is reached (currently £189k for goods and services) tenders will also be advertised through the Official Journal of the European Union.

The sustainable procurement duty is considered and included where applicable, appropriate and proportionate.

We aim to publish our contract award notices within 30 days of the contract being awarded and a register of our current and expired contracts is publicly available on Public Contracts Scotland.

Section 15(5)(b)(i) – General policy on the use of Community Benefits requirements

Community benefits are considered for all regulated procurements irrespective of value. Inclusion is discussed with each UIG with consideration given to the nature of the requirement, appropriateness and proportionality. This reporting year no community benefits were included or requested in our procurement exercises.

Section 15(5)(b)(ii) – General policy on consulting and engaging with those affected by AiB procurements

Procurement seek feedback at the end of each tender moderation to assess what went well, what didn’t go well and where tender evaluation panel members see potential for improvement in the next tender iteration. This enables requirement specific improvement.

Procurement continually assess UIG attitudes, understanding and engagement throughout the procurement process. It has been identified that this is highly variable. Following consultation with previous UIG members, the procurement team will be developing a UIG Charter and support pack to increase group understanding of the procurement process and highlight the benefits of collaborative engagement. The success of this will be monitored over the coming financial year.

Procurement request feedback from tenderers for all regulated tender exercises by incorporating a brief feedback questionnaire into each standstill letter. Any outcomes are recorded in the lessons learned log to support delivery of the subsequent tender iteration.

Section 15(5)(b)(iii) – General policy on the payment of a living wage to persons involved in producing, providing or constructing the subject matter of regulated procurements

The majority of AiB procurements are sourced via Scottish Government or wider UK Government Frameworks. Each supplier’s commitment to Fair Work First practices and therefore payment of the Real Living Wage has already been assessed at framework level.

The AiB regulated procurement strategy template includes a section for Fair Work First. Payment of the Real Living Wage is therefore considered for regulated procurements irrespective of whether the contract is a call-off.

Where Fair Work First requires further consideration, completion of the Fair Work Commodity/Service Strategy checklist is necessitated. This may result in a decision to include a Fair Work First question in the technical envelope. Where this has been deemed to be appropriate, this question will always be a scored question to ensure a good quality response.

With specific regard to payment of the Real Living Wage the AiB policy is to mandate payment of the Real Living Wage for all our contracts. This can be justified as below in accordance with SG guidance:

• payment of the Real Living Wage is relevant to delivery of AiB contracts as AiB requirements often necessitate specialist knowledge and/or skill sets
• mandating the Real Living Wage will not discriminate amongst potential bidders
• it is proportionate for AiB to mandate payment of the Real Living Wage
• our contracts are delivered by workers based in the UK

Section 15(5)(d) – General policy on payments being made no later than 30 days after the invoice, (or similar claim) relating to the payment, is presented (Section 15(5)(d) of the Act):

(i) payments due by the authority to a contractor

(ii) payments due by a contractor to a sub-contractor

(iii) payments due by a sub-contractor to a sub-contractor 

AiB aim to pay service providers within 10 working days from receipt of a valid invoice.

94% of invoices received during 2023-24 were paid within 10 days of receipt and 99% of invoices received during 2023-24 were paid within 30 days of receipt.

Our contract terms and conditions contain a clause which requires our contractors to pay any sub-contractors within 30 days. Conformance with this requirement is assured by the Contract Management team at each contract annual review meeting.

Complaints regarding payment performance can be escalated to the Contract Management team for remediation. No complaints have been received in this reporting year.

Summary of community benefits

No community benefits were included or requested in our procurement exercises during this reporting year. Inclusion of community benefits would have been inappropriate considering the nature of the requirement and/or disproportionate given the estimated contract value.

Many of AiB’s requirements are demand led and market interest reflects the lower number of insolvencies post pandemic. Presently AiB is struggling to attract bidders and maximise competition for tenders. Inclusion of community benefits at this present time may further adversely impact competition and increase the risk of a failed procurement.

Summary of supported businesses consideration

Use of supported businesses was considered for all regulated procurement exercises this reporting year, however no supported businesses were identified with a remit reflective of AiB’s requirements.