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Survey of suppliers to the Scottish public sector

In late 2024, we carried out a survey to better understand how suppliers experience the public procurement process. The published report summarising the findings can be found on our website. 

The survey aimed to help us better understand the Scottish public procurement process from the perspective of suppliers. The survey covered respondents’ bidding patterns, feedback received on their bids, the journey for suppliers, the sustainable procurement duty, challenges and support for bidders, consortium bids, sub-contracting, training and capacity building, and overall perceptions of public procurement in Scotland.

If you have any enquiries, please contact: scottishprocurement@gov.scot

 

An Example of AI Being Used to Write Bid Content

The following is an example of what can be generated by AI with minimal input from the bidder.

Scenario

A bidder uses AI to construct a bid response on Fair Work First for a tender.  

Prompts provided by the bidder in an AI system:

  • can you tell me how I can ensure that Scottish Government Fair Work First criteria are written into my bid to work as a catering supplier?
  • can you tell me how to add in a reference to the Scottish Government and equality?
  • can you help me write the bid?

The AI could produce the following response:

Of course! Here's a draft of your bid incorporating references to the Scottish Government's equality requirements:

Bid: Catering Services with a Commitment to Equality and Fair Work

Introduction: At [Your Company Name], we are dedicated to providing exceptional catering services while upholding the highest standards of equality, diversity, and fair work practices. With a firm commitment to promoting inclusivity and supporting the Scottish Government's equality agenda, we are proud to submit our bid for consideration as your catering supplier.

Our Commitment to Equality: [Your Company Name] recognizes the importance of equality in the workplace and is committed to ensuring that all employees are treated with dignity, respect, and fairness. We align our practices with the principles set forth by the Scottish Government, including those outlined in the Equality Act 2010 and the Fair Work Framework.

Key Features of Our Equality Policies:

  1. Inclusive Recruitment: We employ inclusive recruitment practices to ensure that our workforce reflects the diverse communities we serve. We actively encourage applications from individuals of all backgrounds and identities, including those from underrepresented groups.
  2. Diversity Training: We provide regular diversity and inclusion training to all employees to foster a culture of understanding, respect, and acceptance. This training covers topics such as unconscious bias, cultural competence, and LGBTQ+ inclusion.
  3. Equal Opportunities: We are committed to providing equal opportunities for career development and advancement to all employees, regardless of their background, gender, race, age, sexual orientation, or disability status. Promotion decisions are based solely on merit and performance.
  4. Work-Life Balance: We support work-life balance initiatives, such as flexible working arrangements and parental leave policies, to accommodate the diverse needs of our employees and promote their well-being.
  5. Accessibility: We strive to ensure that our workplace and facilities are accessible to employees of all abilities. Reasonable accommodations are provided to employees with disabilities to enable their full participation and inclusion in the workplace.
  6. Monitoring and Reporting: We regularly monitor and report on our equality performance to identify areas for improvement and track progress over time. We are transparent about our practices and welcome feedback from employees and stakeholders.

Alignment with Scottish Government's Equality Agenda: [Your Company Name] is fully aligned with the Scottish Government's commitment to promoting equality, diversity, and inclusion in the workplace. Our fair work policies reflect the principles outlined in the Scottish Government's equality legislation and initiatives, and we are dedicated to supporting the government's efforts to create a fairer and more inclusive society.

Conclusion: In choosing [Your Company Name] as your catering supplier, you can trust that you are partnering with a company that shares your values and is committed to promoting equality, diversity, and fair work practices. We look forward to the opportunity to work with you and contribute to the success of your organization.

Should you require any further information or clarification, please do not hesitate to contact us.

Sincerely, [Your Name] [Your Position] [Your Company Name] [Contact Information]

While the above provides a reasonable generic response to the Fair Work and Equality aspects of the request, there is no substantive detail as to how the catering company in the example would deliver the service.

This illustrates the fact that bidders should not rely solely on AI to produce a bid. It is always essential that there is human intervention and contribution by bidders prior to submitting their bids.

You should inform bidders that it is their responsibility to check their bid before it is submitted to ensure accuracy and completeness.  Proportional due diligence should also be conducted prior to contract award. 

As always, you should aim to write your tender documents in a way that will result in clear, tangible, responses from your bidders.  This will mitigate against bidders trying to solely use AI generated responses, which tend to be generic and are unlikely to be sufficiently tailored to specific requirements outlined in the ITT.

What do Buyers Need to Know About AI?

Artificial Intelligence (AI) may have an impact on how buyers and bidders function. Below are some of the key considerations for AI in Public Procurement.

Sensitive Information

AI systems share and use information and data that users input e.g. into AI tools or any systems that make use of AI for any purpose.  As a result you should be aware of this and actively manage this risk of sensitive information or copyrighted material being shared inappropriately.

When preparing tender documentation, you should always ensure that you do not add:

  • personal data
  • unpublished/restricted data or
  • data which might suggest future government or public body activity (which may not be in the public domain)

into any AI tools or into any systems which make use of AI for any purpose.

You should also seek advice from data security colleagues in accordance with any internal governance regarding any potential risks of data security breaches associated with any AI data platform you intend to use. 

You should ensure that bidders are made aware that any information that is personal, classified, sensitive or reveals the intent of government or the public body (which may not otherwise be publicly available) included in any tender documentation must not be input by bidders into any AI tools.

If AI can Potentially be Used in the Delivery of  the Service

Buyers should engage with stakeholders in the development of the specification and tender documentation if AI could be used in the delivery of the service.  This should be done in accordance with your organisation's policies and guidance and any associated standards or quality checks that may be required.  Input from colleagues such as AI data policy experts, cyber security or legal advisers is advised in this decision-making process, determining required quality standards, which may require human checking and considering reliance on any particular supplier.

Bidders Using AI to Generate Bids

As the availability and functionality of AI tools grow, bidders may consider, or may already be using AI (including generative AI) to generate their bids.

AI can be used by bidders to help with the initial drafting, formatting and the general quality of bids.

AI may also enable bidders who have the relevant capability and capacity to bid (especially SMEs and third sector businesses) when they would have previously prioritised their bid team resource elsewhere.

However, you should be aware that AI may sometimes also generate inaccurate or misleading statements.  Statements, facts or references generated can appear plausible, but are in fact false. This is because generative AI will gather all information, whether fact or fiction, current or outdated, so it can be inconsistent, misleading or inaccurate.  Generative AI will also try to return the answer or output it thinks you are looking for.  So it is not deliberately misleading, but it can propose information which it has pulled from looking at other similar examples or bids.

Bidders who do not check their bid carefully could accidentally include information which is not accurate because of poor checking rather than as a method or attempting to deliberately mislead.

Whether the response is prepared by the bidder themselves, a bid writer, a consultant or with the aid of generative AI, bidders should be made aware in the tender documentation that it is their responsibility to check their bid before it is submitted to ensure accuracy.

You should consider that, if you expect AI to be used in generating bids, you may wish to carefully think about how you will evaluate very similar bids (although bidders should, of course, be tailoring their bid for the specific procurement).

You may wish to consider and plan, where appropriate, for a general increase in procurement activity.  This is because bidders may use AI to streamline or automate their processes and improve their bid writing capability and capacity, which may lead to an increase in the number of bids you receive.

Equal Treatment, Non-Discrimination and Evaluation

You must adhere to the principles of equal treatment and non-discrimination, irrespective of whether bidders have used AI to generate their bid or not.

As with all bids, buyers should ensure proportionate due diligence is conducted prior to contract award and throughout the duration of the contract, to ensure bidders can deliver the goods and services e.g. clarifications may be required as appropriate.

Considerations for Buyers Using AI

The Central Digital and Data Office (CDDO) leads the UK Government Digital and Data function.  They have produced guidance which should be used by civil servants in relation to their use of AI.

The Scottish Government also advises that personal or sensitive information should not be used in AI tools and promotes this UK Government guidance for civil servants on the use of generative AI.

If you are not a civil servant, you should check if your own organisation has AI guidance/governance procedures which you should use.

As AI is a fast changing area you should ensure you keep up to date with the most relevant guidance.  Like bidders and other users of AI, you will need to check the accuracy of any AI generated information that you use.  You should be aware that AI may sometimes generate inaccurate or misleading statements; where statements, facts or references appear plausible, but are in fact false.  Generative AI will gather all information, whether fact or fiction, current or outdated, so can be inconsistent, misleading or inaccurate.

An Example of AI Being Used in a Bid

The following is an example of what can be generated by AI with minimal input from the bidder.  This same example is also shown on An Example of AI Being Used to Write Bid Content.

An Example of AI Being Used to Write Bid Content

Scenario

A bidder uses AI to construct a bid response on Fair Work First for a tender.  

Prompts provided by the bidder in an AI system:

  • can you tell me how I can ensure that Scottish Government Fair Work First criteria are written into my bid to work as a catering supplier?
  • can you tell me how to add in a reference to the Scottish Government and equality?
  • can you help me write the bid?

The AI could produce the following response:

Of course! Here's a draft of your bid incorporating references to the Scottish Government's equality requirements:

Bid: Catering Services with a Commitment to Equality and Fair Work

Introduction: At [Your Company Name], we are dedicated to providing exceptional catering services while upholding the highest standards of equality, diversity, and fair work practices. With a firm commitment to promoting inclusivity and supporting the Scottish Government's equality agenda, we are proud to submit our bid for consideration as your catering supplier.

Our Commitment to Equality: [Your Company Name] recognizes the importance of equality in the workplace and is committed to ensuring that all employees are treated with dignity, respect, and fairness. We align our practices with the principles set forth by the Scottish Government, including those outlined in the Equality Act 2010 and the Fair Work Framework.

Key Features of Our Equality Policies:

  1. Inclusive Recruitment: We employ inclusive recruitment practices to ensure that our workforce reflects the diverse communities we serve. We actively encourage applications from individuals of all backgrounds and identities, including those from underrepresented groups.
  2. Diversity Training: We provide regular diversity and inclusion training to all employees to foster a culture of understanding, respect, and acceptance. This training covers topics such as unconscious bias, cultural competence, and LGBTQ+ inclusion.
  3. Equal Opportunities: We are committed to providing equal opportunities for career development and advancement to all employees, regardless of their background, gender, race, age, sexual orientation, or disability status. Promotion decisions are based solely on merit and performance.
  4. Work-Life Balance: We support work-life balance initiatives, such as flexible working arrangements and parental leave policies, to accommodate the diverse needs of our employees and promote their well-being.
  5. Accessibility: We strive to ensure that our workplace and facilities are accessible to employees of all abilities. Reasonable accommodations are provided to employees with disabilities to enable their full participation and inclusion in the workplace.
  6. Monitoring and Reporting: We regularly monitor and report on our equality performance to identify areas for improvement and track progress over time. We are transparent about our practices and welcome feedback from employees and stakeholders.

Alignment with Scottish Government's Equality Agenda: [Your Company Name] is fully aligned with the Scottish Government's commitment to promoting equality, diversity, and inclusion in the workplace. Our fair work policies reflect the principles outlined in the Scottish Government's equality legislation and initiatives, and we are dedicated to supporting the government's efforts to create a fairer and more inclusive society.

Conclusion: In choosing [Your Company Name] as your catering supplier, you can trust that you are partnering with a company that shares your values and is committed to promoting equality, diversity, and fair work practices. We look forward to the opportunity to work with you and contribute to the success of your organization.

Should you require any further information or clarification, please do not hesitate to contact us.

Sincerely, [Your Name] [Your Position] [Your Company Name] [Contact Information]

While the above provides a reasonable generic response to the Fair Work and Equality aspects of the request, there is no substantive detail as to how the catering company in the example would deliver the service.

This illustrates the fact that bidders should not rely solely on AI to produce a bid. It is always essential that there is human intervention and contribution by bidders prior to submitting their bids.

You should inform bidders that it is their responsibility to check their bid before it is submitted to ensure accuracy and completeness.  Proportional due diligence should also be conducted prior to contract award. 

As always, you should aim to write your tender documents in a way that will result in clear, tangible, responses from your bidders.  This will mitigate against bidders trying to solely use AI generated responses, which tend to be generic and are unlikely to be sufficiently tailored to specific requirements outlined in the ITT.

Quickfire Guide

Quickfire Guide

Useful Links and Guidance

  • Scotland’s AI Strategy - sets out a vision for AI in Scotland and the principles that will guide us, including the Organisation for Economic Cooperation and Development’s AI Principles, and UNICEF’s Policy Guidance on AI for Children. Also, it identifies the actions we’ll take to develop and strengthen our AI ecosystem over the next five years.
  • The Scottish AI Alliance - a partnership between The Data Lab and the Scottish Government led by a minister-appointed chair and overseen by senior responsible officers from The Data Lab and the Scottish Government. The alliance is tasked with delivering the vision outlined in Scotland’s AI Strategy in an open, transparent and collaborative way. The group provides a focus for dialogue, collaboration and, above all, action on all things AI in Scotland. Its activities are overseen by a leadership group with representation across society and working groups are convened as and when appropriate for specific projects and programmes from across Scotland’s AI community. 
  • The Scottish AI Register - use of the Scottish AI Register is now mandatory, initially on a non-statutory basis, for all Scottish Government Departments and Agencies. The register provides information on AI systems in use or in development with the Scottish public sector.  Using the register, you can get to know the basics of those systems, or examine them in more detail, based on your own interests.  You are also invited to ask questions and give feedback, to help develop trustworthy, ethical and inclusive AI systems.  For each use case of AI, citizens can read on the register’s website a short summary in plain English of why and how AI is used, as well as more technical details if they wish.
  • The Scottish AI Playbook - an open, practical guide to how we do AI in Scotland. It is a shared and living asset, embodying Scotland’s AI Strategy ethos of openness, transparency and collaboration. With this in mind, the first iteration of the Scottish AI Playbook is available in a Wiki format, hosting accessible and dynamic content. It allows all users to participate and contribute to the existing resources they find relevant and useful. 
  • The UK is a member country of the Organisation for Economic Co-operation and Development (OECD) - you can read more on their principles for using AI. 

 

Artificial Intelligence (AI)

What is Artificial Intelligence?

The Scottish AI Alliance defines AI (Artificial Intelligence) as:

“a machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments.  Different AI systems vary in their levels of autonomy and adaptiveness after deployment."

AI systems, tools and products are part of a rapidly growing and evolving market.  As the availability and functionality of AI tools grows, bidders may consider, or may already be using, AI (including generative AI – please see more detail on this below) to produce their bids.

Scotland’s AI Strategy sets out the vision for Scotland to become a leader in the development and use of trustworthy, ethical and inclusive AI.

The use of trustworthy, ethical and inclusive AI by bidders and buyers (in accordance with their public body’s policies and guidance) is not prohibited during the procurement process.  However, your organisation should undertake proportionate actions (in accordance with your policies and guidance) to mitigate any risks and maximise any benefits which AI may present.

Types of AI

There are several different types of AI systems that are increasingly used at present and offer a variety of applications and outputs.  You can find out more about these below:

Generative AI

Generative AI is a subset of AI that focuses on creating new data.  Unlike AI systems that are designed for specific tasks, Generative AI system models can generate new content, such as text, images, or music, based on the prompts and input from the user at the outset.  It will gather and use information and data from many sources.  

This can prove to be a useful tool for users but can also result in the information gathered containing inconsistencies or inaccuracies. As such, outputs must be carefully checked for reliability.
Large Language Models

Large Language Models (LLMs) are a subset of Generative AI specifically focused on language-related tasks. LLMs understand and generate human-like text. An example is ChatGPT which demonstrates the capabilities of generative AI in understanding and producing natural language responses.
Intelligent Automation

Intelligent automation (IA) refers to the use of advanced technologies such as artificial intelligence (AI), machine learning (ML), robotic process automation (RPA), and data analytics to enhance and streamline processes across the public sector. IA automates tasks, improves decision-making through data analysis, and reduces human error. This can lead to greater efficiency, transparency, and compliance, helping to deliver better public services while ensuring responsible use of resources and improved operational outcomes.

 

 

You can find out more about AI by reading the next page What Do Buyers Need to Know About AI?

Whole Life and Life Cycle Costing

Whole Life & Life Cycle Costing

When awarding public contracts on the basis of the Most Economically Advantageous Tender (MEAT), organisations must determine the balance between price/cost and the best price quality ratio.

To determine the price/cost of a contract, organisations can calculate the total cost of the goods or services based on the whole lifecycle rather than only the purchase price. Using a life-cycle costing (LCC) or whole life costing (WLC) model can help organisations identify the MEAT, support obligations to improve the economic, social and environmental wellbeing of their area, and ultimately achieve value for money.

Any costs requested in a tender process should be accessible and free for bidders to provide.

Life Cycle Impact Mapping

Use of the Life Cycle Impact Map in the Sustainable Procurement Tools will help buyers establish where in the life cycle major social and environmental impacts occur which may be:

  • impacts of obtaining raw materials
  • impacts of manufacturing & logistics
  • impacts during delivery of product/service
  • impacts at end-of-life/disposal

Completion of a life cycle impact map can then help to identify whether a LCC or WLC approach may be appropriate.

Life Cycle Costing

LCC is set out in regulation 68 of the Public Contracts (Scotland) Regulations 2015.

Although this provision does not extend to regulated procurements below the 2015 thresholds, the use of a life cycle approach will support an organisation’s responsibility to consider how to support its sustainable procurement duty to improve the economic, social and environmental wellbeing of its area, achieve the MEAT and help achieve value for money. Using this approach will also help increase the transparency of possible future costs to organisations.

LCC will cover part or all of the costs relating to the lifecycle of the goods or services. These can include costs such as:

  • Purchase price

  • Operating costs such as fuel costs, consumables

  • Maintenance costs such as servicing, repairs and spare parts

  • Disposal costs such as decommissioning, dismantling and final disposal

  • environmental and social impacts such as emissions, waste generation and climate change mitigation costs

  • Training costs

  • Insurance costs

  • Revenue generated

LCC can provide a flexible approach to costing, where buyers can focus on specific areas of the lifecycle which will have the greatest impact.

Whole Life Costing

This is a technique to calculate the total cost value of goods or services over their full useful life, from cradle to grave, taking into account all the total relevant costs of purchasing, operating, maintaining and disposal which can include, but is not limited to the costs listed above.

Unlike LCC which may consider only part of the costs, a WLC approach should consider all the relevant costs relating to the goods or services.

Information for Bidders

Where LCC or WLC are being used to assess the costs of a contract, organisations must establish the method in advance and share with bidders:

  • the method that will be used
  • any assumptions which have been made
  • what information is required from bidders.

The costing method being used must be objective, based on non-discriminatory criteria, accessible to all interested parties and not favour a particular bidder.

Where any common methods have been made mandatory by legislation, they must be used e.g. the clean vehicles Directive requires that energy and environmental impacts linked to the operation of vehicles over their whole lifetime are taken into account in all purchases of road transport vehicles, as covered by the public procurement Directives and “The Cleaner Road Transport Vehicles (Scotland) Regulations 2010”.

Costs Attributable to Environmental Factors

Costs attributable to environmental factors linked to goods or services during their life cycle can be considered where the financial value can be determined and verified in an objective and non-discriminatory way.

The data required from bidders must be accessible by all and gathered without unnecessary burden.

Tools and Guidance

Please find below links to resources which may be useful in building cost models, providing considerations and guidance:

Scottish Futures Trust (SFT) Whole Life Appraisal Tool

Produced for the Scottish Government in response to the Review of Public Sector Procurement in Construction 2013, the SFT provided guidance and a whole life appraisal tool which, although created from a construction perspective, may provide information and models useful for complex service contracts. Buyers may also find further information on whole life costing and sustainability in chapter 11 and 18 of the Construction Procurement Handbook.

Should Cost Modelling

UK GCF developed an extensive suite of guidance, tools and templates on “Should Cost Modelling” (SCM), a term used to describe Whole Life Cost Modelling. SCM can provide a forecast of what a service, project or programme ‘should’ cost over its whole life, provide a structure for bids to be received, support the evaluation of bids (including helping to identify abnormally low bids), and provide a baseline to compare forecasted costs to the actuals during the contract performance.

Whole Life Costing (+CO2)

Forum for the Future in partnership with Fife Council developed a Whole Life Costing (+CO2) tool and guidance, which may be helpful to assess the whole life costs including CO2 emissions (from point of purchase to end of life (but does not include embedded or embodied carbon incurred during supply chain activities)) of any product or service which consumes electricity, gas, oil, vehicle fuel and/or water. As above, any method to calculate emissions must be determined and verified in an objective and non-discriminatory way, accessible by all bidders and gathered without unnecessary burden.

The Knowledgehub

The Knowledgehub is a free service where public sector buyers can find helpful guidance, templates and share best practice which includes information on costing models.

 

The document found below, provides some Life Cycle Costing examples.

Life Cycle Costing Example

(file type: docx)

UN Convention on the Rights of the Child (UNCRC)

The United Nations Convention on the Rights of the Child (Incorporation) (Scotland) Act 2024 (UNCRC Act) incorporates requirements set out under the UNCRC into domestic law, and makes provision to ensure compliance with duties relating to the UNCRC.

Section 6 of the UNCRC Act makes it unlawful for public bodies to act in a way that is incompatible with the UNCRC requirements when delivering relevant functions under powers conferred by an Act of the Scottish Parliament. This is referred to as the compatibility duty and applies to functions of a public nature. This includes functions of a public nature carried out under a contract with a public body. This duty comes into force on 16 July 2024.

A Child Rights and Wellbeing Impact Assessment (CRWIA) is a process which identifies any anticipated impact on children’s human rights and wellbeing as part of policy development. Where a CRWIA has been done, it and/or other relevant sources of information should inform the procurement process. Further information on CRWIA is available from the Scottish Government website. Although produced to assist Scottish Government officials comply with the Scottish Minister’s legal requirement to undertake CRWIAs, other organisations may find the guidance helpful.

Consideration of children’s rights and compatibility with UNCRC requirements will be especially relevant, for example, in a procurement to provide a direct service to children such as early learning, childcare and health services. However, there may be other services for which children will be an end user (alongside others) such as transportation, or services provided in public buildings and which could have an impact on access to children’s rights.

Further information on children’s rights is available from the Scottish Government website including non-statutory guidance to support public authorities and other organisations to deliver a children’s human rights approach in policy and practice.

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