Procurement Terminology
The language used in the formal procurement of goods and services can be confusing. The Crown Commercial Services provides an extensive glossary and the Scottish Government has provided the Supplier Journey website which focusses on public procurement in Scotland.
This stub provides a simple description of some of the more frequently used terms in relation to procurement exercises run by public bodies in Scotland.
Procurement Exercise or Tender (Procurement)
A procurement exercise or tender is the process used by public bodies (and other bodies across the country) to buy goods and services. The process is complex with a number of different stages which seek to manage risk and identify the most suitable suppliers for the programme in question.
An organisation or company’s response to the tender is known as a bid. The bid will be comprised of a substantial piece of work which will detail the potential suppliers’ abilities, skills and produces in a way which allows a comparison by the buyer. Commissioning, Procurement and Contract Management Teams (Procurement) Within most public bodies there are teams who focus on different elements of the procurement process:
- The Commissioning Team will initially create a service specification and engage with local communities, potential users of services and potential suppliers.
- The Procurement Team will be responsible for the delivery of the procurement process including publishing tenders on government portals and overseeing the legality of the process.
- The Contracts Management Team are responsible for the delivery and monitoring of the contract once the commissioning and procurement processes have been completed.
Prior Information Notice (or PIN) (Procurement)
A prior information notice (or PIN) is a notice that will be posted to a procurement portal to test the availability of skills, services and/or goods within a given market area (e.g., within a geography or particular skill area). The notice effectively states that a public body is interested in identifying suppliers and may have a tender in the future for which it is doing market research.
By registering your interest against a PIN, you are letting the public body that you are interested in the potential for this tender but are not committing yourself to any further action.
Contract (Procurement)
In its most accurate sense, a contract is the document which summarises the terms and conditions of the agreement between yourself and the public body with whom you are engaging to deliver goods or services. This agreement can take different forms including service level agreements [link internal SLA], framework agreements [link internal framework agreement] or straightforward contracts to supply the goods or services.
In its more common, less formal sense, when people say they ‘are applying for a contract’ with a public body that means that they are participating the delivery of a procurement exercise with that public body to provide them, as the ‘buyer’, with the goods and services specified in a ‘service specification’.
Framework agreement (Procurement)
A framework agreement is a type of contractual arrangement with a procuring body. Frameworks are typically used where the buyer wishes to recruit a number of approved suppliers, perhaps with varied specialisms, into a broader programme of work.
For example, a local authority might create a framework for printing services. This might include a range of different types of printers – e.g., book printers, poster printers or vinyl printers for vehicles. When the buyer has a need for a given type of printing they will ‘call off’ the activity from any of the approved suppliers who would be most appropriate.
There may or may not be a competition at that time of the call off. For example, in some frameworks, approved suppliers may be ranked, in this case the supplier might call off in order of the ranking – from highest to lowest. The detail of subsequent competitions should be provided in the original tender documents as posted on the relevant portal at the time your organisation bids to join the framework.
In this kind of procurement exercise, there is no guarantee that your organisation will be called off to provide goods or services if you are successful in joining the framework. However, it is guaranteed that you will not be called off if you are not an approved supplier.
In Scotland, frameworks are static – following the initial recruitment exercise, those selected will be called off to supply goods or services and any changes to this cohort will require a new procurement exercise. This is not true across the UK and, for example, the Crown Commercial Services operate Dynamic Purchasing Systems (DPS) which suppliers can join at any time.
Service Level Agreement (SLA) (Procurement)
A Service Level Agreement (SLA) is a type of contractual arrangement with a procuring body. It defines the level of service that is expected by the buyer. It outlines specific details of the service arrangement, including quality expectations, performance metrics and the roles and responsibilities of each partner.
SLAs are used to establish a clear understanding of service being provided, to detail accountabilities and to identify what happens in the event that something goes wrong.
Service Specification (Procurement)
A service specification is a document which is produced for a procurement process and which will form part of the final contract between the buyer (e.g., a public body) and the supplier (e.g., a business or charity). This document provides clear, agreed detail about the who, what, how, when and where of the programme to be delivered. For example, for a local Day Care Services contract this might specify the length of each session, the frequency, referral methods etc.
It will also specify any regulatory or legal requirements. For example, a Day Care Service might require to be registered with the Care Inspectorate, have a minimum inspection level.
Invitation to Tender (ITT) (Procurement)
An Invitation to Tender (ITT) will be issued by a public body to the relevant portal when they are ready to undertake the public elements of a procurement exercise. The ITT is one of a number of documents which will be provided and will include the detail of what the purchasing body wishes to buy.
This will be accompanied by documents such as the Single Procurement Document (SPD), Service Specification and detailed instructions for how to put in your bid. The types of documents and procedures will vary among different procurement exercises and public bodies and it is critical to take the time to understand the information provided.
Single Procurement Document (SDP) (Procurement)
In Scotland, the Single Procurement Document (SPD), also known as an European Single Procurement Document (ESPD) in certain contexts, is a standardised questionnaire that buyers use to assess the suitability of bidders during the selection stage of a procurement exercise.
It is designed to reduce the workload for your organisation as a potential supplier and to remove barriers to access for smaller and medium sized businesses and organisations.
There is good guidance to the use of the SPD module on the Public Contracts Scotland website.
Where procurement is being operated by the UK Government they might use a different format of questions known as the Standard Selection Questionnaire Template. The principle is the same – to ensure that the information provided is comparable across bidders, ensuring fairness.