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.

There are no absolute criteria for defining the best route to market for innovation as every project is different, however in making your decision there are two important factors you should consider:  

• the complexity of your project (including the ability of your organisation to adopt the innovation), and
• the level of uncertainty, based on the nature and size of the research and development gap of the project

Level of Uncertainty (or the Research and Development Gap)

There is uncertainty in all innovation projects, whether it’s related to the outcome of the project, or parts of the project that are unknown.  However, as the project develops, you may realise there are metrics that an be recorded and measured over time.  

Unlike typical regulated procurement exercises, for innovation you may not have fully documented specific background information and/or a history of potential products or services.  This is particularly the case when the innovation project involves creating new goods or services that do not yet exist.

You may not for example have:

• product or service costs (either new or those from existing goods and services)
• supply chain partners in place or
• definitive solutions to solve the problem

Even if some research has been carried out in the Discovery and Definition phase, it is normal that levels of uncertainty will remain.  You may still be uncertain as to what the final solution will be, however you will have information gathered from your research to inform the decision for the most appropriate procurement procedure for your project. 

The further away from the market the potential goods or service is from implementation, the larger the R&D gap will be for the project.

Understanding the current Technology Readiness Level (TRL) of the goods or services helps to assess the gap between the current status of a product/service and the desired outcome.  

TRL’s help those involved in R&D to make decisions concerning the development and transitioning of technology. There are a number of online tools available to assist users in defining the TRL level such as those for Horizon Europe

Having defined the gap, you need to detail the R&D steps and resources required to close this gap.

The greater the uncertainty in closing the gap, the more likely it is that specific R&D is required to reduce that level of uncertainty. 

Complexity

Complexity refers to both organisational complexity and the technical complexity of the project.

It relates to areas such as the:

• project scope
• differences in users' needs
• organisational dynamics and structures
• policies and regulations affecting the project e.g. legal, data, systems integrations
• new technology complexities and
• skill sets of staff (both within the project and with entities outside of the project).

These factors will help you determine the type of process or procurement procedure that should be used. Please note the above is not a comprehensive list – every situation will have differing areas of complexity which need to be considered.

An example of differing complexity:

An innovation project within a single organisation is required to develop a new automated technology to receive payment for a visitor attraction.  This offers little complexity.

Whereas a project to create and codevelop highly specialised zero emissions vehicles, based on data from 3 pilot areas, for all public sector organisations, each with differing requirements, may present both technical and organisational complexities that require different consideration from a procurement procedure.

The below diagram shows how the level of complexity and uncertainty influences the procurement procedure chosen:

The above diagram is a matrix with two axis.  The x axis shows increasing complexity and the y axis shows increasing uncertainty due to an increasing research and development gap.  

A combination of the complexity and uncertainty axis result in four possible outcomes in terms of which procurement procedure to use.  These possible outcomes are:

Outcome 1: Low complexity and low R&D gap.  This can result in using either an open or restricted procurement procedure or the possible use of an existing Dynamic Purchasing System (DPS) or existing Framework Agreement.  The use of an existing DPS or Framework Agreement are subject to the applicability of the original terms of the Contract Notice.

Outcome 2: High complexity and low R&D gap.  This can result in using a procurement procedure involving negotiation where the highly complex aspects of the project would benefit from a process of negotiation working in partnership with contractors.  

As a result there are a number of negotiated procurement procedure options that can be used.  These include -

• Competitive Dialogue.  To use this procurement procedure the buyer may not have a precise understanding of the requirement and will use the competitive dialogue procedure to describe: the need and clarify/negotiate the solution.  However the buyer must set out the minimum requirements, award criteria and their weightings in the Contract Notices and procurement documents.  These cannot be changed during the negotiation process.  Competitive Dialogue allows bidders to submit initial solutions after being successful at the selection stage.  It allows buyers to negotiate proposed solutions with bidders.  Here the specification requirements concentrate on the buyer's needs without having to detail the nature, characteristics or solutions to be offered.
• Competitive Procedure with Negotiation This procedure lets you clarify bids with bidders after their submission of fully formed initial tenders.  You should use this procedure if you are unable to define how to meet your needs technically and/or you cannot specify the legal or financial requirements of your contract.
• Negotiated Procedure without Prior Publication.  This procedure should only be used in very exceptional circumstances where approval is given before any purchase is made.  The approver must not have been involved in the award of the contract.  Obligations under procurement legislation have been considered and the justification and approval must be formally recorded (along with robust supporting evidence) for audit purposes.
• Innovation Partnership.  This will be used in complex cases where there is no current solution available on the market to meet the need of the buyer.   Buyers can proceed with one or more partners undertaking separate R&D activities.  Innovation partnerships are structured in successive phases, based on the R&D steps undertaken e.g. design, manufacturing, etc., and you (as the buyer) may set intermediate targets that need to be met.

Outcome 3: Low complexity and high R&D gap.  This is where there is a large gap between what the market can supply and your needs. In such cases a research and development only phase may be used to determine whether and how the need can be met.  This research and development only phase (a Pre Procurement Process) can produce the necessary data to allow you to then carry out a further procurement exercise for implementation.  To aid your research, you should consider undertaking market analysis through a preliminary market consultation.

And finally Outcome 4: high complexity and high R&D gap.  This is is where a possible innovation project would benefit from trials or pilots, research and/or development to gauge its possible success or scalability.  In such situations it is usually thought that the project has potential and, as a result, other funding methods are sometimes used.  For example to conduct trials or a pilot you may have sourced finance via grants, endowment funds, charity funds, etc.  Where a pilot or trial has been carried out, for example via a pre-commercial procurement, a further procurement exercise is likely to be required to scale up the project.

What Procurement Processes Can I Use?

Identifying a potential innovative product or service does not automatically provide a route to market.  You will need to choose the best procurement route to follow to achieve your objective. 

Before proceeding you are asked to read the guidance on the Procurement Journey with regards to:

• the Innovation Life Cycle
• assessment of the market, potentially using the Preliminary Market Consultation Notice

Innovation Approval

Approval of your innovation project will be subject to your local governance procedures.

It should be clear at the point of initial funding and from the commencement of every project:

• what challenge or problem is intended to be solved
• what contractual method is intended through successive phases of a project, including how this will be funded.  This is also relevant for research and development (R&D)

When using procurement processes, the approach taken must adhere to the principles of transparency, equal treatment and non-discrimination, proportionality and mutual recognition.

Innovation Attributes

Irrespective of the procurement procedure you chose, for innovation to be successful it will normally need to satisfy three essential criteria: 

• Desirability – a product or service that the organisation or individual wants or needs
• Viability – a product or service that is affordable and cost effective 
• Feasibility – a product that can be created and delivered and solves the problem

If innovation projects do not contain data or information on these three criteria then implementing the innovation becomes more risky and expensive with an increased risk of failure.

Providing evidence of these criteria can be extremely challenging particularly in complex organisations.

Number of Innovation Processes Required

Your innovation project may involve moving through stages e.g. from fundamental research through to solution design, prototyping, testing and ultimately commercialisation.  

The overall aim is to commercialise the product or service i.e. bring a successful product or service to market that is commercially viable.

Please be aware that, as a result, it may be necessary to undertake more than one procurement exercise e.g. a procurement to undertake research and/or development and then a later procurement exercise to buy the product/service.

The above diagram shows that there are two alternative approaches to innovation once the Discovery and Definition Phase of Innovation has been completed. 

Option one is a Pre-Commercial Procurement (PCP).  This allows you to contract for R&D services, engage with suppliers and identify the best option(s) that the market can deliver to meet your needs.  Then if you decided that the products or services developed through the PCP meets your needs, and is viable, you will need to conduct a further procurement exercise to purchase commercial volumes of the good or service.

Option two uses a regulated procurement procedure to cover the route to market (sometimes referred to as Public Procurement of Innovation (PPI)). This route to market can include research and/or development activity.

For more information on routes to market for innovation please refer to Innovation: Selecting a Procurement Process