Local Government and Third Sector Directorate

T:0131-244 7980 E: alastair.goudie@scotland.gsLgov.uk

Ms Sarah Boyack MSP The Scottish Parliament EDINBURGH EH991SP

15 July 2011

Dear Ms Boyack BLiNDCRAFT AND USE OF ARTICLE 19

I refer to the Minister for Energy, Enterprise and Tourism Mr Ewing's letter of 24 June to you, in which he indicated he would ask officials to write to you and Kezia Dugdale MSP regarding the above. Article 19 of EC Directive 2004/18/EC Public Procurement Directive (implemented in Scots law by Regulation 7 of the Public Contracts (Scotland) Regulations 2006) allows any public sector body to restrict the tendering process for goods or services to supported factories and businesses only. In 2008/09, although we have no data relating to the number of Reserved Contracts that were let by the Scottish public sector, from analysis of the public sector's spending in that financial year we do know that 26.4m was spent with 23 of the 24 Scotland based Supported Businesses. Procurement colleagues have worked closely with the British Association of Supported Employment (BASE) and have taken steps to educate buyers and improve the possibility of supported businesses winning contracts through Article 19. The steps have included: The publication, jointly with the British Association of Supported Employment (BASE), of a brochure "Supported Businesses in Scotland"; available at http://www.scotland .gov. uk/Topics/Government/Procurement/supportedbusinessreg7 issuing a guidance note to public bodies promoting the use of Reserved Contracts (SPPN 10/2010); In October 2010, the introduction of a registration process to identify Supported Businesses to allow buyers to reserve contracts under Article 19 on the Public Contracts Scotland (PCS) Portal. At present we have no data to measure how this is being used (a report will be developed in due course), however we do know that third
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sector organisations have successfully won contracts! frameworks to the value of 243m between October 2010 and June 2011. Supported Businesses have also submitted a list of products and services they can offer via reserved contracts. This is currently being considered by the Procurement colleagues.

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ALASTAIR GOUDIE Head of Employability and Skills Third Sector Division

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