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Sustainable Procurementwithin public sector organisations

Jane Warren

Procurement Professional

Portsmouth City Council.

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Lets get the definition out the way…

‘Sustainable procurement is a process whereby organisations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organisation, but also to society and the economy, whilst minimising damage to the environment’

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PCC Sustainable procurement policy

PCC will actively pursue a policy of sustainable procurement, as a contribution wider aims. It is committed to minimising the environmental impacts and maximising the economic and social benefits of all purchases made through PCC. To achieve this goal, whilst maintaining cost effectiveness, PCC will (where practical):

• Ensure that sustainability issues, including whole-life costing, are considered in all contracts.

• Utilise PCC’s market power to encourage innovation and the development of more sustainable solutions to the members’ needs.

• Stimulate customer demand for sustainable products and services.

• Work with suppliers to increase sustainability throughout the supply chain.

• Develop greater awareness and a better understanding within the organisation of the benefits of sustainable procurement and how these benefits can be obtained

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Good Procurement is Sustainable Procurement

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What’s in it for PCC?

• Leadership• Achievement of strategic objectives• Financial benefit• Risk management• Ethics• Reputational• Sustainable development • Improved communication• Effective supply chains

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Clear Priorities

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Considerations

Economic• Price and quality• Encourage diverse supply

market• Collaboration with

suppliers for greater efficiencies

• Use of evaluation weighting

• E-procurement

Environmental• Transportation• Use of resources• Recycled content• Energy use• Packaging• CO2 emissions• Biodiversity• Waste

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Considerations

Social• Support Local authority objectives• Regeneration of local area• Skills and training of those in the community• Local employment• Economic regeneration• Diversity• Voluntary and community sector, SME’s, Minority,

Women owned business.

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Corporate Social Responsibility‘an approach by which a company recognises that its activities have a wider impact on the society in which it operates; and that developments in society in turn impact on its ability to pursue business successfully’ CIPS

• Environmental responsibility• Community Involvement• Equal opportunities• Sustainability• Diversity and supplier diversity• Corporate Governance• Human Rights• Impact on society• Ethics and ethical trading• Bio-diversity

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Supplier positioning

Strategic Security Strategic Critical

Tactical Acquisition Tactical Profit

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Value of spend

Sustainability Risk to Organisation

Not all procurements are the same, all have different priorities

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Whole Life Cost

• Whole-life cost, or Life-cycle cost, refers to the total cost of ownership over the life of an asset. Typical areas of expenditure which are included in calculating the whole-life cost are:

• Planning

• Design

• Construction/acquisition

• Operations

• Maintenance

• Renewal/rehabilitation

• Financial (e.g. depreciation and cost of finance)

• Replacement or disposal

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Supplier appraisal and selection

• Competitive Intelligence• Stimulate market attract competition.• Supplier appraisal questionnaire – PQQ• Tender process. OJEU regulations.• Supply chain concept• Supply risk• Ethics and corporate social responsibility• ISO / BS – BS8903 Standards in Sustainable Procurement• Innovation• Collaboration

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Supplier Contract Management

How can we improve supplier sustainability performance?

• Agreed performance measures – KPI’s• Regular review meetings• Communication• Joint business planning• Common goals• Relationship management• Benchmarking.

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Can we do better?...Yes

• Planning• Complexity procurement process• E-procurement• Specifications – conformance/performance.• Communication• Supplier engagement• Terminolgy• Alignment of objectives

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