townsville city council sustainable purchasing training module

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TOWNSVILLE CITY COUNCIL SUSTAINABLE PURCHASING TRAINING MODULE

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1. TRAINING OVERVIEW

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TRAINING OVERVIEW

1. Introduction to Sustainable Purchasing (SP)

2. SP: What is it & Why practice it?

3. Overview- Good SP Practices

4. SP Principles

5. Including the Environment in Procurement Policies &

Planning

6. Writing Specifications

7. Tender Evaluation

8. Make sure you get what you paid for

9. Bringing it all together

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OBJECTIVES

The purpose of this training is to help you:

Understand what Sustainable Purchasing (SP)

is;

Appreciate the reasons to support it; &

Be able to apply the Principles of SP in

procurement policies & practices, that is,

how to do it!

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SP- WHAT IS IT & WHY DO IT?

Sustainability- Triple Bottom Line (TBL) in Public

Disclosure.

Q: What is Unsustainable?

Sound Management Systems include the Environment,

as well as WH&S & Quality Systems;

Competitive Advantage;

Environmentally Responsible Businesses;

Image, Grants & Support for Local Business.

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WHAT IS SP?

SP means integrating environmental/health

considerations into purchasing decisions.

Sustainable Goods & Services (G&S) are those that

have a lesser or reduced effect on human health & the

environment when compared with competing G&S

that serve the same purpose.

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WHY DO SP?

Purchasing G&S that satisfy value for money (V4$) criteria but

also include sustainability;

Save $- improving efficiency & reducing costs- landfill charges

& on-sell recyclables

Better manage environmental risks;

To ensure the public image of TCC as a leader in

environmental management & a responsible corporate citizen;

To provide an example to other businesses, industry & the

community in promoting the use of sustainable G&S;

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BARRIERS/MOTIVATORS

Changing behaviours in an organisation not only

requires an understanding of the levers that can

push the desired changes but also a knowledge of

the barriers.

If you wish to improve your organisation’s SP

performance, it is worthwhile understanding the

reason to support it, the barriers against it &

finding ways to overcome these barriers (CBSM).

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KEY POINTS

SP means integrating environmental considerations

into purchasing decisions.

Sustainable G&S have a lesser/reduced effect on

human health & the environment when compared with

competing G&S that serve the same purpose.

There are sound reasons for organisations to support

SP which include V4$, environmental leadership &

risk management.

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GOOD PURCHASING PRACTICES

Planning the Purchase

Drawing up Specs

Tender Evaluation Plan (TEP)

Tender Evaluation Process

Managing the Successful Tender

Feedback loops

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SP PRINCIPLES

Waste Management- Life Cycle Analysis (LCA/C2C)

Recycled vs Recyclable

Future Costing- life time

Managing Environmental Risk

Meeting Sustainability Commitments

Water/Energy/CO2e reduction

Haz Subs reduction

EMS ISO 14000

Stewardship- Due Diligence/Care/GED

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VALUE FOR MONEY (V4$)

• Price (cost neutral)• Transport• Installation• Insurance• Operational costs• Energy Efficiency• Water Efficiency• Service & Maintain• Spares• Waste Mgt (WM)

• Durability• After sales support• Long Term V4$• Reusability• Recyclablity• Warranty• Env & OH&S Risks• EIA- 249P Corps Act• Performance• Image

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KEY POINTS

• WM Principles should guide procurement planning so that strict avoidance of waste is the highest priority & disposal to landfill the least favourable option.

• When costs of G&S are compared, it should not only relate to price but to all other costs during use of G&S.

• SP as part of Environmental Risk Mgt strategy• SP most effective at front end of procurement

process, where relevant policies incorporating sustainable principles direct procurement.

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ENVIRONMENTAL POLICY

• “Environmental Considerations will be taken into account in investment & corporate strategies & in the purchase of G&S” Australian Post Environmental Policy

• “The organisation is committed to purchasing G&S that reduce environmental impacts & contributes to the socio-economic development of Brisbane City Council”

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SP POLICIES & PLANNING

• Service Level Agreements (SLA) & Standards of G&S

• Specifications• Quantities [Q] (measurable)• Verification (competent person)• Evaluation- Tenders• Re-evaluation• Reporting- feedback

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TOP DOWN COMMITMENT

• Purchasing Policy• Behavioural/cultural change• Change Agents/Champs• “Rewards”• Contracts• Education• Promotion• Involvement- design & implementation• Tools- ecospecifier

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ENVIRONMENTAL ISSUES

• Environmental Policy- Corporate/Business Units

• Information (tools)

• Current Product Performance

• Payback timeframe

• Price Premium- up-front cost

• Considerations- next sheet

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Q’s BEFORE PURCHASING

• Is it needed at all?

• Life-cycle costs?

• Waste prevention?

• Toxicity?

• No virgin material?

• Sustainable harvest?

• Recycled/recovered?

• Reusability?

*Greenhouse gases =

• Recyclability?• Durability?• Energy Rating?• Water Rating?• Disposal (package)?• Clients Needs?• Alternatives?

• CO2e*?

Equivalent CO2

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TARGET G&S- OFFICE

OFFICE:

• A4

• COMS PAPER

• TOILET TISSUE

• STATIONARY

• TECHNOLOGY

• SPARE PARTS

• LIGHTS

ELSEWHERE:

• PARKS

• CONSTRUCTION

• FLEET

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SUSTAINABLE G&S

• ecospecifier www.ecospecifier.org

• ecoBuy www.mav.asn.au/buyrecycled

• AGO www.greenhouse.gov.au

• www.greenprocurement.org.au/toolbox

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KEY POINTS

• To be most effective, sustainability issues need to be considered in the policy & planning phases of purchasing.

• By adopting a proactive stance to the establishment & use of SP policies, an organisation can ensure that SP becomes a reality.

• SP will be most successful with top-level management support, as such people have the most power to influence policy frameworks & the general culture of the organisation.

• Consider sustainability issues in your procurement planning. Review previous checklist.

• Some types of goods such as paper, office equipment, landscaping materials, certain construction materials & rubber/tyre derived products particularly lend themselves to SP considerations

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ELIMINATING BIAS

• Performance verses prescriptive specs.• Obstacles: colour, virgin paper, all-or-none basis,

tight response & delivery times.• Over-Reliance on Track Record.• Cost considerations- cheap vs longevity:- Comparison shopping & bulk purchasing- Life-cycle (LCA) costing- Demand management (reduced volumes)- Longer term solutions- economies of scale

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SUPPLIER CHECKLIST

• What is their Environmental Record?• What is the Environmental Impact of their G&S?• What is the Environmental Impact of their

production process?• What are whole of life considerations?• What are Environmentally positive features of each

G&S?

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USEFUL ADVICE

• Internal expertise• Review Purchasing Policy• Review Tender Template• Re-develop Specs- biodegradable etc.• Statement- greater recycled content preference• Use eco-product databases• Discussions with like organisations • Attend relevant forums

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KEY POINTS

• Specs may result in bias against sustainable G&S if overly prescriptive, reliant on track record or focus on up front costs

• Writing performance specs less likely to create bias

• When preparing spec based on existing template, check for & amend prejudicial provisions.

• Add appropriate provisions to specs to enhance SP

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TENDER EVALUATION

• Sustainable factors must be incorporated in evaluation criteria before the Request for Tender (RFT) is released. Hughes Aircraft Systems International v Airservices Australia [1997] 558 Federal Court of Australia (30 June 1997).

• Scoring of tenders against predetermined criteria & application of agreed weightings against scores is generally acceptable (similar to job applications).

• All tenderers must be legally compliant.

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KEY POINTS

• There are legal requirements relating to tender evaluation that impact upon SP. Importantly, environmental issues must be incorporated into evaluation criteria before the call for tenders.

• Checklists &/or questionnaires can be used to gather & assess environmental information on suppliers & their G&S. These can be stipulated in the requirements for the tenderer in the specification.

• Environmental issues need to be appropriately weighed in the tender evaluation process. V4$ considerations should encompass all the relevant factors rather than simply the cheapest purchase price.

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GET WHAT YOU PAID FOR

• The extent of monitoring of supplier’s performance is determined by the level of risk with the G&S being provided.

• Good monitoring of contractor performance progressively identifies, anticipates & facilitates correction of short comings before the relationship is adversely affected.

• The suppliers performance must be assessed objectively using techniques & against criteria which are pre-determined, clearly understood & agreed by both parties.

• Techniques- Contract Management Meetings, Contract Reporting, Expediting, Inspection/Visits, SLA Performance Audits & Financial Monitoring & Review/Audit.

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KEY POINTS

• Standard Contract Management Procedures Standard Contract Management Procedures should be used to ensure compliance with SP should be used to ensure compliance with SP components of specs.components of specs.

• Refer Contract Management notes.Refer Contract Management notes.

Developed by DEPT of ENVIRONMENT & CONSERVATION (NSW) & Adapted Developed by DEPT of ENVIRONMENT & CONSERVATION (NSW) & Adapted from MOLINO STEWART PL. presentation.from MOLINO STEWART PL. presentation.