To ask the Scottish Government which organisations that have contracts with it to provide services are subject to performance-related penalties.
Scottish Government contracts and frameworks which include clauses pertaining to Liquidated Financial Damages, KPIs and/or Service Credits are listed in the following table.
It is not common for contracts to include provisions that set out specific financial consequences for failure to perform as it can be difficult to quantify in advance an expected loss from such a failure. However, standard terms and conditions used when awarding Scottish Government procurement contracts do contain a number of important provisions. This includes provisions whereby, if the contract is terminated - including as a consequence of a material breach by the supplier, then the Scottish Government may deduct any costs incurred to complete the services from any amount due to be paid. If this exceeds amounts already paid, then provisions include that those sums can be recovered.
Additionally, for regulated procurements, the Scottish Government’s standard terms and conditions contain indemnity clauses requiring the supplier to indemnify the public sector body in respect of any loss suffered through that supplier’s negligent or wrongful act, or omission or defect in any goods/services supplied. Regulated contracts are currently those valued at £50k and above. Levels of indemnity are set appropriately and proportionally for each procurement exercise.
I have attached extracts from Scottish Government Terms and Conditions that pertain to repatriations as a result of termination, default and indemnities.
To underpin good practice, the Scottish Government sets out guidance for all public bodies on how to Manage and Improve the Performance of Contracts in the Procurement Journey, a national tool to support consistency of practice across Scotland. This includes appropriate use of KPIs, Service Levels, Incentives and Sanctions where it is proportionate and relevant to do so, for example, in regulated contracts.
Extracts from Standard Scottish Government Terms and Conditions that pertain to Performance Related Damages
26.6 The Service Provider indemnifies the Purchaser and any replacement service provider against all actions, suits, claims, demands, losses, charges, damages, costs and expenses and any other liabilities which the Purchaser or replacement service provider may incur in respect of the emoluments and outgoings referred to in clause 26.5.
52 Indemnity
52.1 The Service Provider shall indemnify the Purchaser against all claims, proceedings, actions, damages, costs, charges, expenses and any other liabilities which may arise out of, or in consequence of, any Default of the Service Provider.
52.2 The Purchaser shall indemnify the Service Provider in respect of all claims, proceedings, actions, damages, fines, costs, expenses or other liabilities which may arise out of, or in consequence of, a breach of the Data Protection Laws where the breach is the direct result of the Service Provider acting in accordance with the Purchaser’s specific written instructions. This indemnity provision shall not apply if the Service Provider-
1.acts on the Purchaser’s specific written instructions but fails to notify the Purchaser in accordance with clause 14.12(c) of this Contract;
2.fails to comply with any other obligation under the Contract.
53. Limitation of Liability
53.1. Neither Party is liable to the other Party under the Contract for any:
53.1.1. loss of profits, business, revenue or goodwill; or
53.1.2. indirect or consequential loss or damage.
53.2. But clause 53.1 does not exclude any liability of the Service Provider for additional operational, administrative costs or expenses or wasted expenditure resulting from the Default of the Service Provider.
53.3. The liability of either Party under the Contract for Defaults is limited to [x].
53.4. But neither Party excludes or limits liability to the other Party for:
53.4.1. death or personal injury caused by its negligence;
53.4.2. misrepresentation;
53.4.3. any breach of any obligations implied by section 12 of the Sale of Goods Act 1979 or sections 2 or 11B of the Supply of Goods and Services Act 1982; or
53.4.4. any breach of any obligations under Data Protection Laws
59. Termination Rights
59.1. The Purchaser may terminate the Contract by notice to the Service Provider with immediate effect if the Service Provider commits a Default and:
59.1.1. the Service Provider has not remedied the Default to the satisfaction of the Purchaser within 20 Working Days, or such other period as may be specified by the Purchaser, after issue of a notice specifying the Default and requesting it to be remedied;
59.1.2. the Default is not in the opinion of the Purchaser, capable of remedy; or
59.1.3. the Default is a material breach of the Contract.
59.2. «F68: The Purchaser may also terminate the Contract in accordance with any provisions of the Schedules.»
59.3. The Purchaser may terminate the Contract in the event that:
(a) the Contract has been subject to substantial modification which would have required a new procurement procedure in accordance with regulation 72(9) (modification of contracts during their term) of the Public Contracts (Scotland) Regulations 2015; or
(b) the Service Provider has, at the time of contract award, been in one of the situations referred to in regulation 58(1) (exclusion grounds) of the Public Contracts (Scotland) Regulations 2015, including as a result of the application of regulation 58(2) of those regulations, and should therefore have been excluded from the procurement procedure.
59.4. The Purchaser may also terminate the Contract in the event of a failure by the Service Provider to comply in the performance of the Services with legal obligations in the fields of environmental, social or employment law.
59.5. The Purchaser may also terminate the Contract where, at any time before the term of the Contract, the Service Provider or any person falling within the description set out in paragraph (2) of regulation 58 of the Public Contracts (Scotland) Regulations 2015 commits an offence referred to in paragraph (1) of that regulation.
60. Termination on Insolvency and Change of Control
60.1. The Service Provider shall notify in writing immediately, and the Purchaser may terminate the Contract with immediate effect by notice, where in respect of the Service Provider:
60.1.1. a proposal is made for a voluntary arrangement within Part I of the Insolvency Act 1986 or of any other composition scheme or arrangement with, or assignation for the benefit of, its creditors;
60.1.2. a shareholders’ meeting is convened for the purpose of considering a resolution that it be wound up or a resolution for its winding-up is passed (other than as part of, and exclusively for the purpose of, a bona fide reconstruction or amalgamation);
60.1.3. a petition is presented for its winding up (which is not dismissed within 14 days of its service) or an application is made for the appointment of a provisional liquidator or a creditors’ meeting is convened pursuant to section 98 of the Insolvency Act 1986;
60.1.4. a receiver, administrative receiver or similar officer is appointed over the whole or any part of its business or assets;
60.1.5. an application order is made either for the appointment of an administrator or for an administration order, an administrator is appointed, or notice of intention to appoint an administrator is given;
60.1.6. it is or becomes insolvent within the meaning of section 123 of the Insolvency Act 1986;
60.1.7. being a “small company” within the meaning of section 382 of the Companies Act 2006, a moratorium comes into force pursuant to schedule A1 to the Insolvency Act 1986;
60.1.8. a debt relief order is entered into; or
60.1.9. any event similar to those listed above occurs under the law of any other jurisdiction.
60.2. The Purchaser may terminate the Contract by notice with immediate effect within 6 months of:
60.2.1. being notified that a change of Control has occurred in accordance with clause 33.1 (Change of Control); or
60.2.2. where no such notification has been given, the date that the Purchaser becomes aware of the change of control.
60.3. But the Purchaser may not terminate the Contract under clause 60.2 where approval of the change of control has been granted by notice by the Purchaser.
Table 1: Contracts and Frameworks that contain Clauses pertaining to Liquidated Financial Damages, KPIs and Service Credits |
Area | Supplier | Provision | Liquified Financial Damages | Key Performance Indicatiors | Service Credits |
ICT | HP Inc. UK Limited | Desktop Client Devices | No | Yes | no |
| | HP Inc. UK Limited | Mobile Client Devices | No | Yes | no |
| | HP Inc. UK Limited | Managed Print Solutions | No | Yes | no |
| | XMA Limited | Web Based and Proprietary Devices | No | Yes | no |
| | XMA Limited | Technology Peripherals and Infrastructure | No | Yes | no |
| | XMA Limited | Managed Print Solutions | No | Yes | no |
| | Softcat Ltd | Technology Peripherals and Infrastructure | No | Yes | no |
| | Insight Direct (UK) Ltd | Technology Peripherals and Infrastructure | No | Yes | no |
| | Computacenter (UK) Ltd | Technology Peripherals and Infrastructure | No | Yes | no |
| | Agilico (Scotland) Limited | Managed Print Solutions | No | Yes | no |
| | Canon UK | Managed Print Solutions | No | Yes | no |
| | Epson | Managed Print Solutions | No | Yes | no |
| | Konica Minolta | Managed Print Solutions | No | Yes | no |
| | Ricoh | Managed Print Solutions | No | Yes | no |
| | Workflo Solutions | Managed Print Solutions | No | Yes | no |
| | Xerox | Managed Print Solutions | No | Yes | no |
Area | Supplier | Provision | Liquified Financial Damages | Key Performance Indicatiors | Service Credits |
NCPD | 23 Media Audits | Media Auditor | No | Yes | No |
NCPD | Carat | Media Planning and Buying | No | Yes | Yes |
NCPD | Republic Of Media | Media Planning and Buying | No | Yes | Yes |
NCPD | Mediacom Edinburgh | Media Planning and Buying | No | Yes | Yes |
NCPD | The Media Shop Scotland | Media Planning and Buying | No | Yes | Yes |
NCPD | Spiritmedia Scotland | Media Planning and Buying | No | Yes | Yes |
NCPD | Penna | Recruitment Ads and PINs | No | Yes | No |
NCPD | The Leith Agency | Marketing Services | No | Yes | No |
NCPD | Walk in the Gate Ltd | Marketing Services | No | Yes | No |
NCPD | The Union Advertising Agency | Marketing Services | No | Yes | No |
NCPD | Stand Ltd | Marketing Services | No | Yes | No |
NCPD | Story UK lTd | Marketing Services | No | Yes | No |
NCPD | Dentsu Creative ( a trading division of Dentsu UK) | Marketing Services | No | Yes | No |
NCPD | Union Direct Ltd | Marketing Services | No | Yes | No |
NCPD | Bright Digital Marketing Ltd | Marketing Services | No | Yes | No |
NCPD | The Lane Agency Ltd | Marketing Services | No | Yes | No |
NCPD | John Doe Group | Marketing Services | No | Yes | No |
NCPD | Drummond Central | Marketing Services | No | Yes | No |
NCPD | Smarts (NI) Ltd | Marketing Services | No | Yes | No |
NCPD | Stripe PR and Communications Ltd | Marketing Services | No | Yes | No |
NCPD | 3x1 Ltd ( known as 3x1 Group) | Marketing Services | No | Yes | No |
NCPD | Muckle Media | Marketing Services | No | Yes | No |
NCPD | Jump Research Ltd | Marketing Services | No | Yes | No |
NCPD | Progressive Partnership Ltd | Marketing Services | No | Yes | No |
NCPD | Ipsos (Market Research) Ltd | Marketing Services | No | Yes | No |
NCPD | BMG Research Ltd | Marketing Services | No | Yes | No |
NCPD | Trinity McQueen Ltd | Marketing Services | No | Yes | No |
NCPD | Northstar Media ltd | Marketing Services | No | Yes | No |
NCPD | Metro Production Group Ltd | Marketing Services | No | Yes | No |
NCPD | Speakeasy Productions Ltd | Marketing Services | No | Yes | No |
NCPD | CTM | Travel Services | No | Yes | No |
NCPD | Lyreco | General Office Supplies | No | Yes | No |
NCPD | APS Group Scotland | Publishing, Printing, Design and Associated Services | No | Yes | Yes |
NCPD | Barr Printers Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | Harlow Printing Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | J Thomson Colour Printers Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | Mackay and Inglis Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | MBM Print SCS Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | McAllister Litho Glasgow Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | Pandaprint | Print and Associated Services | No | Yes | Yes |
NCPD | Printwell Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | Sterling Press Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | Sciamed Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | Streamline Corporate | Print and Associated Services | No | Yes | Yes |
NCPD | The Evolve Group (Scotland) Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | Winter and Simpson Ltd | Print and Associated Services | No | Yes | Yes |
NCPD | Enterprise Rent a Car UK | Vehicle Hire | No | Yes | No |
Area | Supplier | Provision | Liquified Financial Damages | Key Performance Indicatiors | Service Credits |
Heat in Buildings | Warmworks | Warmer Homes Scotland | No | Yes | Yes |
Promoting Children and Families Wellbeing Unit | APS | Scotlands Baby Box | No | Yes | Yes |
Area | Supplier | Provision | Liquified Financial Damages | Key Performance Indicatiors | Service Credits |
Example -MPIP | IBM | SPM delivery | No | No | Yes |
SGPT | University of Strathclyde | Provision of Host Body for the Anti-Racism Observatory for Scotland | No | Yes | No |
SGPT | Santa Fe Relocation Services Limited | Provision of UK International and Domestic Relocation Services | No | Yes | No |
SGPT | Ipsos Mori UK | Evaluation of Cancer Care Strategy for Scotland | No | Yes | No |
SGLD | Keith Mitchell Law Accountants | Law Accountancy Services | No | Yes | No |
Marine | Cammach Bryant Ltd | Temporary Crewing Framework | No | Yes | No |
Marine | Intermarine UK Ltd | Temporary Crewing Framework | No | Yes | No |
Human Rights | Inspiring Scotland | EHRF & DES Fund Management | No | Yes | No |
Education and Justice | Aberlour Child Care Trust | Independent Child Guardians Service | No | Yes | No |
SGPT | Big Partnership | CyberScotland Partnership – | No | Yes | No |
Marketing and Communications Management and Co-ordination |
SGPT | Ipsos Market Research Ltd | Scottish Household Survey (SHS) | No | Yes | Yes |
SGPT | Sign Solutions | Contact Scotland BSL | No | Yes | No |
SGPT | Inspiring Scotland | Autistic Adult Support Fund and Learning Disabilities Support Fund Administrator | No | Yes | No |
SGPT | Impact Funding Partners | Bairns Hoose Fund Administrator | No | Yes | No |
SGPT | Inspiring Scotland | Outdoor Community Play Fund Administrator | No | Yes | No |
SGPT | Scottish Women's Aid | Scotland’s Domestic Abuse and Forced Marriage Helpline | No | Yes | No |
SGPT | IPSOS Market Research | Whole Family Wellbeing Funding Year 3 and 4 Evaluation | No | Yes | No |
SGPT | Quality Health Limited | Health And Care Experience Survey 2025-26 | No | Yes | No |
SGPT | Advice Direct Scotland Ltd | Test and Learn Prevention Pilots | No | Yes | No |
SGPT | Grant Thornton UK Advisory & Tax LLP | USA Export Plan | No | Yes | No |
SGPT | Energy Savings Trust | Provision of Heat in Buildings Loans and Grants Administration Service | No | Yes | No |
| |
Area | Supplier | Provision | Liquified Financial Damages | Key Performance Indicatiors | Service Credits |
Example -MPIP | IBM | SPM delivery | No | No | Yes |
Utilities | EDF | Supply of Electricity | No | Yes | Yes |
Utilities | Total Energies Gas and Power | Supply of Gas | No | Yes | Yes |
Utilities | Business Stream | Water and Waste Water Billing Services | No | Yes | Yes |
Area | Supplier | Provision | Liquified Financial Damages | Key Performance Indicators | Service Credits |
NCPD | Press Data Ltd | Media Services | No | Yes | No |
NCPD | Access Intelligence Communications Ltd | Media Services | No | Yes | No |
NCPD | The Royal Bank of Scotland | Banking Services | No | Yes | No |
NCPD | Venesky Brown Recruitment Ltd | Temp & Interim Staff Services | No | Yes | No |
NCPD | Harvey Nash Ltd | Temp & Interim Staff Services | No | Yes | No |
NCPD | Pertemps Recruitment Partnership Ltd | Temp & Interim Staff Services | No | Yes | No |
NCPD | ASA International Ltd t/a ASA Recruitment | Temp & Interim Staff Services | No | Yes | No |
NCPD | Lorien Resourcing Ltd | Temp & Interim Staff Services | No | Yes | No |
NCPD | Blue Arrow Ltd | Temp & Interim Staff Services | No | Yes | No |
NCPD | Brightwork Ltd | Temp & Interim Staff Services | No | Yes | No |
NCPD | Harper MacLeod LLP | Legal Services | No | Yes | No |
NCPD | Anderson Strathern LLP | Legal Services | No | Yes | No |
NCPD | DWF LLP | Legal Services | No | Yes | No |
NCPD | Brodies LLP | Legal Services | No | Yes | No |
NCPD | Morton Fraser MacRoberts LLP | Legal Services | No | Yes | No |
NCPD | Addleshaw Goddard LLP | Legal Services | No | Yes | No |
NCPD | CMS LLP | Legal Services | No | Yes | No |
NCPD | National Westminster Bank (Royal Bank of Scotland) | ePurchasing Card (Scotland Excel call off/cluster via CCS Framework) | No | Yes | Annual rebate |
NCPD | Global Connections (Scotland) Ltd | Interpreting, Translation & Transcription Services | No | Yes | No |
NCPD | DA Languages Ltd | Interpreting, Translation & Transcription Services | No | Yes | No |
NCPD | Global Language Services Ltd | Interpreting, Translation & Transcription Services | No | Yes | No |
NCPD - ICT Networks | Vodafone Ltd | Mobile Voice & Data Services Framework | No | Yes | No |
Area | Supplier | Provision | Liquified Financial Damages | Key Performance Indicatiors | Service Credits |
MPIP | The Wise Group, People Plus, Start Scotland, Remploy, and Falkirk Council ( 8 contracts) | Fair Start Scotland | No | Yes | Yes |