SUSTAINABLE PUBLIC PROCUREMENT - INTRODUCTION FOR PURCHASERS
INTRODUCTION
This note is intended to be an informal, broad summary of sustainable procurement- not a definitive guide. More detailed guidance is available on the Scottish Procurement Directorate's Corporate Social Responsibility (CSR) page at: http://www.scotland.gov.uk/Topics/Government/Procurement/PublicProcurement/ProcurementPolicy/coporate-responsibility . Sustainable procurement is variously known as sustainable procurement, sustainable development in procurement, sustainability in procurement, Corporate Social Responsibility in procurement etc. In broad terms it means taking full account of environmental, social and economic factors in public procurement.
LEGISLATIVE ISSUES
All Public Bodies are required to comply with the principles of the EU Treaty and EU, UK and Scottish procurement legislation. The main ways in which this affects sustainability issues at the various stages of the procurement process are set out below
PROCUREMENT PROCESS - SPECIFICATION
EU rules are less concerned with what you buy than with how you buy it and public bodies are, in general, free to specify sustainable options, provided that doing so does not distort competition unreasonably or discriminate against products and suppliers from other EU Member States or from elsewhere in the UK. It is possible, for example, to specify recycled paper or energy-efficient IT equipment. It is at this stage of the process that sustainability issues can have their greatest impact. It is much easier and more cost-effective to build sustainability into the procurement process at the outset, when requirements are being drawn up, than later in the process.
PROCUREMENT PROCESS - SELECTION OF TENDERERS
Selection criteria must focus on candidates' economic and financial standing and their technical capacity. When looking at CSR issues they have to be directly related to the performance of the contract in question. It is not permissible to ask questions about potential suppliers' general policies on environmental issues, for example, where they do not relate to the performance of the contract..
PROCUREMENT PROCESS - CONTRACT AWARD
Only two options are available - (1) Lowest Price and (2) Most Economically Advantageous Tender (MEAT). MEAT is likely to be used in the vast majority of cases and is equivalent to Value for Money. Value for Money is not about securing the lowest initial price; it is defined as the optimum combination of whole-life costs and quality to meet the user's requirement. This emphasis on whole-life costs encourages the consideration of environmental issues where such issues are part of the organisation's objectives. Resource consumption (e.g. energy, water) and disposal costs are examples of possible award criteria. Criteria for determining the most economically advantageous tender must be relevant to the subject matter of the contract and should be appropriately weighted, according to each's importance to the performance of the contract.
CONTRACT MANAGEMENT
Authorities may, after contract award, work co-operatively with suppliers to reduce their environmental impact, and that of their supply chain, by, for example, reducing packaging, looking at delivery frequency and scheduling, or addressing the hazardous material content in products.
SOCIAL ISSUES
The need to relate factors to the subject matter of the contract means that the opportunities for incorporating social issues into public procurement are more limited than is the case for environmental issues. The explanation above of EC rules and environmental issues is just as relevant to the consideration of social issues. As with environmental issues, contracting authorities should not ask about tenderers' general policies on social issues where this goes beyond what is relevant to performing the subject matter of the particular contract in question.
An example of where the consideration of social issues during the procurement process is likely to be appropriate is where a public authority has obligations of a social nature in relation to a particular function, the performance of which it is contracting out. For example the "duty to promote" under discrimination legislation can legitimately be passed on to a contractor where the contractor is carrying out a service which would have been subject to the duty were it being performed in-house.
As with environmental issues, it is usually best to take social issues into account early on in the procurement process. For example, ensuring that an IT system is accessible to disabled users or that a caterer will provide meals suitable for special religious or other diets.
ECONOMIC ISSUES
EC rules do not permit preference being given to any sector of suppliers such as local suppliers, social enterprises or SMEs, except for supported businesses where particular rules apply (see below). It is permissible, however, to remove any obstacles which might be preventing such groups from competing for public business. This might be done by, for example, ensuring they are aware of where opportunities will be advertised and making the tendering documentation and the tendering procedure as simple as possible for all suppliers. Meet the buyer events might support this activity although such events should not be linked to any particular tendering opportunity in order to ensure that competition is not distorted by any actions which might be seen as discriminatory against other suppliers. For more detailed guidance and to read about the Suppliers Charter which has been agreed between the Scottish public sector and business, see: http://www.scotland.gov.uk/Topics/Government/Procurement/Selling/Supplierscharter2 (contact Jo Mitchell, Josephine.mitchell@scotland.gsi.gov.uk tel:0131 244 3731 for more information).
SUPPORTED BUSINESSES
Under public procurement legislation it is permissible for public bodies to restrict participation in a tendering exercise to only those organisations who are defined as supported factories or supported businesses (companies with more than 50% of their workers being disabled persons who by reason of the nature or severity of their disability are unable to take up work in the open labour market).
This does not mean that contracts can simply be placed with particular supported factories or businesses without any form of competition. The legislation makes clear that when public bodies 'invoke' this clause, they must follow the contract award procedures set out in the rest of the legislation. Essentially, this means that the public body is obliged to give adequate publicity, including placing an advertisement in the Official Journal of the European Union where applicable, inviting all supported factories or businesses who are interested in bidding to express an interest). Further information is available at:
http://www.ogc.gov.uk/documents/Guide_biz_and_factories.pdf
FAIR TRADE
Public procurement can support fair trade items. It is not permissible to specify in a tender opportunity that only fair trade produce may be offered as this would be discriminatory against other suppliers. It is permissible, however, to say in tender documents and advertisements that fair trade options would be welcomed. The tender evaluation process must then seek to achieve the usual value for money solution without taking into account the fair trade aspect. Once the contract has been awarded on a value for money basis the successful tenderer can be asked to make fair trade items available where this does not change the nature of the contract or distort competition. It is also possible to require caterers to supply fair trade products as part of a catering contract (e.g. tea and coffee for official meetings) as this does not distort competition between caterers. More detailed guidance can be found at: http://www.scotland.gov.uk/Topics/Government/Procurement/PublicProcurement/policy-notes/SPPN(2)2005 (contact Dave Cook, details below).
FURTHER INFORMATION
For further information on sustainable public procurement, contact Dave Cook, Scottish Procurement Directorate, Scottish Executive, 1st Floor, Meridian Court, 5 Cadogan St, Glasgow G2 6AT, dave.cook@scotland.gsi.gov.uk , tel:0141 242 5598.