Evidencing value for money

Quotations

Quotations or tenders submitted as part of an application must:

• Come from suppliers that trade independently of each other and don’t share any ownership of the same businesses.
• Ideally come from suppliers that are not linked to anyone on the applicant group’s Board or committee, or any of its staff or volunteers. However, in some cases, this may be unavoidable if there are limited suppliers in the area. Where there are such links between a prospective supplier and personnel within the applicant group, we wish to see evidence that the group has employed good practice in managing conflicts of interest (see below)
• Ideally, be valid for at least three months from the application deadline for the fund in question, or otherwise, come with a certification for the supplier that they will be honoured. If quotations are not valid for three months, we may ask how applicants will deliver the project if prices increase.
• Where multiple quotes are to be provided, they must be comparable in terms of (as appropriate): type or nature of product/ service, quality, size/ quantity of goods.

Quotations should include:

• An itemised breakdown of costs
• The supplier’s address, phone number and a contact name
• VAT should be included on the quote
• The supplier’s company registration number if they are a limited company
• Evidence of relevant professional qualification(s) and/or accreditation to/membership of relevant trade bodies or quality assurance schemes as appropriate
• Evidence that the preferred supplier has current professional indemnity cover in place if appropriate (NB: all design, building and related services).

We will accept screenshots or photocopies/ printouts of catalogue or website listings for products, where these:

• Contain the specification of the item which can be compared across the evidence supplied.  They must contain a price, and all should be clearly either inclusive or exclusive of VAT as applicable.  
• Are from accessible catalogues or website that can be easily verified.  

Quotes within e-mails can be accepted however either the body of the quote, or the attachment must follow the general quote guidance (above) and contain the company name and address, date, name of the individual within the company supplying the quote, company number etc.  

Foundation Scotland may reject quotes that don't meet the requirements set out.

Contracting Professional Services

For many types of large project, the applicant will need to contract qualified professionals to design, manage and/or deliver the work.  Foundation Scotland wishes to know how these professionals have been or will be selected, whether those selected have the correct experience and qualifications, and whether their fees represent value for money.  

As above, a minimum of three quotes will be required for all work in excess of £3,000 in value. This should be per type of service, e.g. architect, quantity surveyor, or builder.

For grant applications involving services  or goods exceeding £30,000, we would expect the applicant to carry out an open procurement exercise for the contract to deliver the work or goods before it is let. We would expect to see a report on this.  However, for single item purchases three quotations based on a specification may be accepted. For more details on open procurement see below.
 
We would normally expect to see the procurement report as part of the grant application, enabling the costs and amount of grant required to be accurately identified. In some circumstances, however, the group making an award decision may be content to make an award in principle (up to a set amount) and for the procurement exercise to be conducted thereafter.  In such a case, an open procurement exercise would be a condition of grant, and the final grant award based on the preferred bidder’s price.

Where the project involves land or building work and a Project Design Team or architect has already been appointed by the applicant, the procurement exercise may be carried out by those professionals on behalf of the applicant.  They would then also prepare the procurement report.  Alternatively, where the applicant has the relevant skills and capacity, the applicant may conduct the procurement exercise and prepare the report themselves.  

What is open procurement?

By an ‘open’ procurement process we mean that the applicant, or the professional acting on their behalf, has made the contracting opportunity available to as many relevant suppliers as possible.  This means:

• Advertising it via appropriate channels, for example local press, relevant websites, and/or trade journals, or;
• Identifying relevant professionals and inviting a reasonable number of these to tender for the work, via e-mail or letter (providing an audit trial of which and how many prospective suppliers have been contacted). By reasonable we mean sufficient for the applicant group to be confident they will receive a minimum of three tenders for the work. 

Foundation Scotland understands that in some cases it may not be possible to source three tenders if the procurement is for very specialised services or goods. We will consider this on a case-by-case basis in light of the services/goods in question and our knowledge about the local area.

The applicant should give prospective suppliers sufficient information to compile a detailed and accurate quotation. This should be via a specification or an ‘Invitation to Tender’ document. All prospective suppliers should receive the same information, including:

• A description of the work or goods required. Ideally this should include any relevant drawings or technical specifications, e.g. for construction projects, a Bill of Quantities
• The applicant’s proposed timetable for completion of the work
• Any skills, qualifications, professional accreditations, membership of trade bodies, or length of relevant experience that the supplier should poses
• A list of criteria that tenders will be assessed against and weighting of scoring across these. Generally speaking, we would expect cost and quality factors to be balanced at between 30-40% for cost and 60-70% for quality.
• Clarity as to whether VAT and any ancillary costs (e.g. outlays) should be included in the quotation  
• Information on how the group will receive tenders, i.e. in what format, at what address, and the deadline for submissions.

The Procurement Report – what to include

The procurement report should include:

• A copy of the invitation to tender
• Evidence that the opportunity to tender has been widely advertised or made available to as many relevant suppliers as possible. For example, written correspondence with potential suppliers, copy of public advert(s) with details of locations and duration
• Details of those who submitted a tender and copies of their tenders including price
• Notification of the successful bidder and price, and 
• Justification for their selection against the criteria adopted.  

Staff Salaries and Payments to Freelancers

Evidencing the purpose and need for the role

Foundation Scotland can fund salaries for staff, or payment for freelance suppliers where the rationale and purpose can be clearly evidenced. A role description should be provided, including a list of essential skills and minimum levels of experience required in the relevant field(s). 

If a grant is sought for the costs of a salary or freelance payment over multiple years, we would expect to see evidence of the post’s contribution towards the stated purpose (as set out in the role description) prior to the release of funds in each subsequent year.  There should not be an assumption that the same role will automatically be funded year-on-year without a clear demonstration of the ongoing value it provides.  

Recruitment / selection 

We will ask whether the role is to be new or the continuation of an existing staff post or freelance contract.  If it is an existing role, we will wish to know how the current postholder or freelancer is managed and supported and evidence of their key achievements to date in relation to the proposed project.  

If it will be a new role, this should be openly advertised in line with equal opportunities principles.  As a minimum this means it should be widely advertised locally and via sector-specific recruitment sites, the interview arrangements (e.g. venue) should be accessible, and the selection process must not discriminate against any candidate on the basis of protected characteristics under the Equalities Act 2010. Further guidance on good practice in recruitment and selection is provided on the Scottish Council for Voluntary Organisations (SCVO) website

Benchmarking salaries or freelance costs

Where a grant is sought towards a salary, the applicant may be asked to provide evidence that the salary has been benchmarked against those for similar posts, either locally or elsewhere in Scotland.  Many voluntary organisations use salary scales linked to local authority (Scottish Joint Council, or SJC) scales, civil service or specific groups like academic or nursing grades.  However, it may not always be possible to equate different jobs to particular points or grades on the scales.  Note that, for this reason, SCVO no longer publishes the SJC pay scales.

Where a grant is sought towards the cost of contracting freelance suppliers, value for money should be evidenced through the appropriate procurement process set out above. Generally speaking, we would not expect fees for technical project management costs relating to land and buildings projects to exceed 1% of the total costs of the overall project.
 
The National Minimum Wage is statutory and enforced by HM Revenue and Customs (HMRC).  The Living Wage in Scotland is a voluntary standard and associated pay rates are higher than the National Minimum Wage; visit the Poverty Alliance for more information. 

If an applicant is seeking a grant towards staff salaries or freelance suppliers that will be paid less than the Living Wage in Scotland we will query this as we're unlikely to provide a grant for salaries or payments less than this amount.

Identifying and Managing Conflicts of Interest

Ideally quotations will come from suppliers that are not linked to anyone on the applicant group’s Board or committee, or any of its staff or volunteers. However, in some cases this may be unavoidable if there are limited suppliers in the area. 
 
Where there are such links between a prospective supplier and personnel within the applicant group, we wish to see evidence that the group has employed good practice in managing conflicts of interest. This would include evidence that:

• those who hold such interests have declared them to the group’s committee or Board, and 
• those with interest have not been involved in any decision over the selection of the preferred supplier. 

To this end, applicant groups may find it useful to adopt a declaration of interest form, to be completed and signed by individuals and reviewed/updated annually. Also, suppose there remain concerns about suppliers' independence. In that case, Foundations Scotland can provide independent support, for example, by receiving tenders on the applicant’s behalf and opening these simultaneously as this may help avoid any conflicts of interest.