1.0 Introduction

South Gloucestershire’s Procurement & Commissioning Strategy, 2014-2018, recognises the importance of sustainability in procurement, and states as one of its main aims:

“We will continue to deliver sustainable procurement, embedding the Council’s environmental objectives as a component of all public procurement activities. This will be carried out to ensure that the well being of our environment is maintained whilst also achieving value for money.”

This guidance outlines the steps that should be taken by staff when conducting procurement projects. To support and provide recorded evidence for this, a Sustainable Procurement Checklist (included at the end of this document) should be completed and kept on file for all procurements over £10,000 in value (and for procurements less than £10,000 if you wish).

The guidance that follows is structured according to the procurement cycle stages used elsewhere in our procurement guidance and training.

2.0 Identifying the Need

In the interests of sustainability the decision to procure should always be challenged. You should ask:

  • Is the procurement essential, or might another approach achieve the same end more efficiently? (For example, the need for a waste management contract for the disposal of packaging could be avoided by getting existing product suppliers to reduce their packaging or introduce reusable / returnable packaging)
  • Can the goods or service be obtained within the Council or can requirements be met by using existing Council assets or buildings?
  • Are there other ways of obtaining the supply or service, e.g. sharing or renting rather than buying?
  • Can the procurement be aggregated with other similar requirements elsewhere in the Council?

3.0 Developing the Business Case

3.1Understanding the environmental impacts of your contract

An Environmental Assessment should be undertaken at an early stage of the procurement process – ideally during the development of the Business Case. The Environmental Assessment template provides a quick means of determining whether your contract could conflict with and/or help deliver the Council’s environmental objectives and, if so, which objectives are relevant. For relevant environmental objectives, you will then need to consider how you might avoid / reduce conflict with or help progress them in the specification and delivery of your contract.

If major environmental risks or opportunities are identified, you can consult the Council’s Strategic Environment and Climate Change team for advice on how to manage them.

Major environmental opportunities could become part of the contract objectives.

3.2Carbon Dioxide Emissions and Resilience to Climate Change

If the delivery of the contract will involve significant energy use eg electricity or transport fuel (and hence carbon dioxide emissions), please refer to the South Gloucestershire Climate Change Strategy (which sets out aims, targets and action plans to reduce carbon emissions from South Gloucestershire homes, travel, economy, communities, energy production and Council operations) and the Council’s Carbon Management Plan (which sets out objectives, targets and action plans to reduce carbon emissions from the Councils’ energy consumption in buildings, street lighting, fleet vehicles and business mileage).

This may help prompt ideas for use during tendering and evaluation (see Section 5 below) eg how the specification or delivery of your contract can minimise carbon dioxide emissions and contribute to the delivery of the targets, or link up with existing and planned actions. Alternatively, or as well, you can ask bidders to set out their own proposals for minimising energy use in the delivery of the contract. Please contact the Strategic Environment and Climate Change team for more information.

If the delivery of the contract is sensitive to weather and climate (for example it is reliant on premises or infrastructure in a flood risk zone) or could affect resilience to weather and climate (for example it will have a lasting built legacy), consideration should be given to future climate in the procurement process. This might involve specific requirements being set out in the specification, or assessment of tenders considering the adequacy of suppliers' business continuity arrangements to cope with severe weather events. In the UK we are expecting progressively warmer, wetter winters; hotter, drier summers; and more extreme weather events. For further information on future climate refer to the UKCP09 climate projections or contact the Strategic Environment and Climate Change team.

3.3Wood, Timber and Paper

If the contract involves use of wood, timber or paper products, you must build measures into the procurement process to ensure that these are sourced sustainably and legally, and to require evidence from the supplier (on an on-going basis) that this is the case.

3.4 Understanding and Developing the Market

As part of the options appraisal for your business case you should assess the market to establish what sustainable products, services or works are available to meet your requirement. These alternatives are often not as obvious as the traditional items that are procured, and it may help to start thinking in terms of outcomes – what is the procurement aimed at achieving rather than how it will achieve it.

It may be possible to play an active role in developing the market for sustainable solutions by engaging with suppliers at this stage, inviting their ideas for sustainable solutions. This could be particularly beneficial if there are local suppliers, and will also help encourage local suppliers to bid for our business. Using local suppliers can benefit the environment by reducing transportation as well as helping the local economy.

If you are letting a large contract that will involve the use of subcontractors, you could talk to potential main contractors about how they might involve local firms in the supply chain.

3.5Whole life costing

You should always use a whole life costing approach when building a business case for procurement. This can play a big part in supporting a sustainable solution, as environmentally preferred products often have a higher initial cost but lower running costs. Sustainably-operated services may also cost less over the lifetime of the contract, for example by having reduced landfill costs built into the supplier’s pricing.

4.0 Defining the Procurement Approach

If your contract is worth more than £50,000 you will normally be conducting a restricted tender. This gives you the opportunity to ask questions at the pre-qualification stage about the firm’s capacity to deliver sustainability benefits in relation to the contract. If you opt for an open tender (usually because there are only a small number of suppliers likely to tender) then these questions would be built into the tender itself.

You may be considering the use of an externally-let framework agreement as an alternative to tendering for a contract. Such frameworks are often available via other local authorities or public sector purchasing organisations such as ESPO or OGC). In this case you should consider whether the original framework tender has placed sufficient emphasis on sustainability, if possible by requesting the original Invitation to Tender (ITT) and evaluation model. You will inevitably have less control over sustainability issues if you use somebody else’s framework, and you should consider whether the time and money likely to be saved by using the framework will outweigh this. All new external frameworks have to be approved by the Director of Corporate Resources and you will be asked how the proposed arrangements support the Council’s sustainability objectives. For further information on Frameworks please contact you departmental Procurement Team

Likewise, if you are considering the option of participating in a collaborative procurement e.g. with other Councils, you should factor into your decision the amount of influence you will be able to have over sustainability issues.

If your procurement is below the £50,000 tendering threshold then you may not be using an advertised tender process but instead inviting a limited number of quotations. In this case you should consider sustainability in your choice of who you invite to quote. Ideally you will have sounded out potential suppliers to develop your ideas (and theirs) on sustainability when you are developing the Business Case, and this will have informed your choice of who to invite to quote as well as informing your specification.

5.0 Selecting Suppliers to Tender

This stage is part of the restricted tendering route and involves the short-listing of suppliers being invited to submit a full tender. If you are not using this procedure – for example, if you are conducting an open tender or just inviting competitive quotations then this section will not apply.

The Council's standard Pre-Qualification Questionnaire (PQQ) template includes questions on Environmental Management. You can add further specific questions relating to your contract if they are relevant in assessing the capability of the supplier to deliver this particular type of goods or service. For example, you could ask about accreditation for supplying timber from legal and sustainable sources; or for a supplier to refer to past experience in managing the environmental aspects of this type of contract; or for details of relevant staff qualifications. However, you should not at this stage ask questions that relate to how the company would deliver the contract in question; these should be kept for the tender stage.

You must also avoid asking questions about the supplier's general environmental performance when this has no clear relation to the contract, e.g. "Do you use recycled paper in your business?"

Responses to questions on environmental management should form part of your criteria for evaluating the quality of tenders, and you should be clear about the weighting you will give to this at the PQQ assessment stage.

While you might wish to improve local economic sustainability and reduce transportation impact by buying from local suppliers, EU rules prohibit the use of criteria which discriminate against suppliers in other European member states. (The new EU Procurement Directive removes “part b” services (health and social care services previously exempt from EU advertising requirements), although the UK government will introduce a “light touch” regime for health and social care services below a threshold of €750,000).

However, there is nothing to stop you encouraging local suppliers to compete for the business. You can talk to them at the stage of assessing the market, you can advertise the contract locally and remind local suppliers of the opportunity when it is published. You can also encourage them to register on the Council's contracts and opportunities portal so that they can receive automatic notification of all tenders that would interest them – and make sure that your tender is advertised on the portal. You must not, however, issue the PQQ or any other tender documents to them prior to their general release, or give them any other information that is not also given to all interested suppliers.

6.0 Tendering and Evaluation

6.1Contract Specification

Where your Environmental Assessment (see Section 3.1 above) identifies environmental risks and/or opportunities, you should consider how the contract specification can help manage them. Environmental factors may be legitimately included in specifications and in selection and award criteria as long as they are relevant to the contract, non-discriminatory and transparent. For example:

  • It is possible to specify materials to be used in carrying out a contract as well as materials to be avoided.
  • You can specify that products should be made in a way that minimises environmental impact eg using recycled materials.
  • Eco labels can be used to help identify environmental specifications, and they can be accepted as evidence of meeting those specifications, though they should not be specified as requirements in their own right. Equivalent evidence of compliance with the underlying technical requirements must always be allowed.
  • You can take into account disposal or recycling factors relating to the supplied goods.

When specifying requirements for commodity products you should check to see whether the government has set a relevant minimum specification for environmental performance in its Government Buying Standards. While these are not at present mandatory for local government they represent best practice and we are strongly encouraged to use these specifications. You should, at least, follow the minimum mandatory specifications listed.

You should also remember to ask:

  • Are the quantities required accurate?
  • Do we need such a high specification level as we have used in the past?

For more complex services and works, introducing sustainability into procurement often involves moving away from writing technical specifications and towards developing functional specifications. This means that the necessary outcomes should become the focus of the specification, allowing the suppliers to develop new methods of delivery.

One way of encouraging innovation is to allow for variant bids. Contractors are the experts in their field and by using variant bids, they may put forward approaches that you may not have thought about.

For works contracts, environmental factors can be taken into consideration in the design stages of a project. The council is responsible for the overall execution of the work and all that happens in and around the construction site and is therefore entitled to define the requirements for the execution of works. For some projects there is a statutory obligation for an Environmental Impact Assessment (EIA) to take place. All works contracts where the value exceeds £300,000 at any one site are required by law to have a Site Waste Management Plan in place prior to the commencement of work.

Specifications which inherently favour local suppliers are contrary to EU regulations and should be avoided. For low value contracts (below £50,000) there is a requirement to get 3 written quotes and although the EU treaty principles state the Council cannot prioritise local businesses, quotations can be sought from any capable business including local suppliers.

6.2Environmental Method Statement

Where your Environmental Assessment (see Section 3.1 above) identifies environmental objectives which your contract could conflict with and/or help deliver, then your tender package should include an Environmental Method Statementto be completed by the supplier. The evaluation of submitted method statements should be included in the scoring of sustainability factors (discussed below). If there are environmental objectives that are clearly not relevant to the contract you can delete them from the Environmental Method Statement template. However, aim to leave scope for bidders to think creatively about how their approach or product could help us further our environmental objectives. Please contact the Strategic Environment and Climate Change teamif you would like any assistance in identifying relevant objectives.

6.3Tender Evaluation

The Council’s contracts are almost invariably awarded on the basis of the most economically advantageous tender rather than on price alone. This allows quality factors to be offset against price. Clearly, sustainability should form part of your criteria for evaluating the quality of tenders, and the weighting you give to it should be stated in the invitation to tender. The weighting given to sustainability will be shown as a subdivision of the score awarded to quality, and the importance you give it should reflect the potential environmental impact of the contract.

The Environmental Method Statement provides a simple and transparent means of capturing and subsequently assessing information from bidders on how they propose to help progress the Council’s environmental objectives in the delivery of the contract. Please contact the Strategic Environment and Climate Change teamif you would like any assistance in assessing bidders’ completed Environmental Method Statements.

Lastly, you should make sure that your evaluation model is based on whole life costs, and that your tender documents ask for all the information necessary to calculate these.

6.4Monitoring

Wherever possible you should set key performance indicators (KPIs) for environmental performance as part of your contract specification, require regular monitoring of these and set targets for continuous improvement. For contracts with high environmental impact you could consider building commercial rewards and penalties into the contract based on performance against these indicators.

7.0Awarding and Implementing the Contract

The contract must be awarded according to the evaluation criteria already set, and sustainability matters will play their identified part in this.

When it comes to implementing the contract you will probably need to have further discussions with the chosen supplier regarding the method of monitoring and reporting on environmental performance.

Giving unsuccessful bidders constructive feedback on their performance against sustainability criteria can be a useful way of developing awareness in the market.

When you have awarded the contract you should email a copy of the successful bidder’s Environmental Method Statement to the Strategic Environment and Climate Change team() with a brief note describing how this was taken into account in the evaluation process.