procurement Sustainable Scotland Network Best Value Sustainable Development

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					Sustainable Scotland Network Best Value & Sustainable Development Toolkit

Sustainable Procurement and Resource Management

       “This means … 6. That sustainable development requirements are taken
       into account in the procurement strategy” and
       7. That there is a systematic approach to the management of resources
       which contributes to the achievement of sustainable development”
       (Chapter 7)

The policy context for procurement to play its part in Best Value and sustainable
development has been much strengthened by the commitments in Securing the Future,
the UK Government Sustainable Development Strategy, published in March 2005. This
sets out “new commitments on sustainable procurement in the public sector to make the
UK a leader within the EU by 2009”. This means engaging with expenditure of £125bn a
year is central to the drive towards more sustainable consumption.

The approach to procurement and resource management should not be interpreted
narrowly. What is purchased, and how it is purchased, demonstrate the values of an
authority. Procurement means much more than „buying‟. Those with purchasing and
supply expertise in dealing with suppliers and the award and management of contracts
should be brought in at the crucial initial stages of defining service needs and option
appraisal. Similarly resource management should be concerned with managing all the
resources of the authority – finance, buildings and estate, and the human resource –
through all stages.

With procurement and resource management, the assessment of Best Value should
consider the optimum combination of whole life cost and quality (or fitness for purpose)
to meet the identified customer requirement. Value for money and sustainable
development considerations go hand in hand, focussing on whole life costs and benefits,
from acquisition and running costs through to disposal. Factors to assess include:
        Direct and indirect resource use, including energy;
        Investing to save revenue costs (spend to save measures);
        Re-use of products, and using refurbished, recycled or recyclable products;
           and
        The costs of disposal.

There is scope in a sustainable procurement strategy to develop and implement a risk-
based approach, designed to prioritise the categories of spending that have the greatest
social and environmental impacts (IDeA, 2003). An aspect of this that should not be
neglected is the value of symbolic purchases. Amongst the most powerful of these are
Fair Trade goods (those carrying the internationally recognised Fairtrade Mark) and FSC
timber products, which reflect on the relationship of the authority to the wider
international community. However, the process should evolve through a sustainable
procurement strategy, so that it eventually applies to all programmes and asset
management, as well as informing spending reviews.

The procurement cycle also includes supplier development. Small firms, voluntary and
community organisations, social enterprises and ethnic minority businesses are
innovative and add value. They play an important part in the local economy and
contribute to social cohesion; using local suppliers can increase the economic effect of
spending in the local area, as shown by the LM3 case study below. It is important that
they have access to the local government marketplace, including as members of the
supply chain for strategic partnerships. Good practice in corporate social responsibility
in the private sector includes better management and development of supply chain
relationships, and there is an opportunity for councils to align the procurement of goods
and services with their wider duties and objectives.

The first point of contact in Scotland should be the Scottish Executive‟s Procurement
Directorate at http://www.scotland.gov.uk/Topics/Government/SPD. The website gives direct
links to key references on topics such as the EU Procurement Directives, with which
there must be compliance. It is vital to know what is allowed and what is not. The
principles are clear. Contract award criteria must always be objective, relevant to the
subject of the contract and provide Best Value.

For example, it is permissible in contracts to specify the percentage of recycled material
by value, but not permissible to take food-miles into account, require suppliers to
subscribe to voluntary schemes such as ISO14001, or to specify Fair Trade goods (see
http://www.scotland.gov.uk/Topics/Government/SPD/19468/LAPC22OO5). Taking account of local
labour preferences may also be problematic. The EU Directives enable:
          Specification of recycled content;
          Specification of environmental standards and use of products from
            sustainable sources;
          Specification of energy efficiency (using the EU‟s mandatory energy labelling
            scheme); and
          Dividing contract awards by geographic area, or product type (e.g. separating
            fresh food from processed). Judicious sub-division may enable local
            suppliers to compete in a way that improves Best Value and does not
            discriminate against larger suppliers. Explaining procurement procedures to
            local suppliers can encourage them to bid for local authority business.

Sustainable procurement and resource management are cross-cutting themes, and
apply across all services. Several aspects – construction contracts, catering and food,
fuel and power - have been already referred to in the Paths to Improvement under
specific services in section 4. The questions below relate to matters across an authority.


             Paths to Improvement include:                  Policy      Being      Outcomes
                                                                     Implemented
 Is there a procurement strategy which shows how              □           □            □
 sustainable development is addressed at every stage in
 the procurement process?
 Is there an overall asset management strategy to ensure      □           □            □
 that the existing stock of assets, their acquisition and
 disposal contributes to the Council‟s corporate and
 community plan objectives?
 Does the Council actively support the development of         □           □            □
 innovative suppliers of goods and services, including
 social economy organisations, especially where these
 complement and support wider local authority objectives?
 Do the Council‟s contracts specify recycled content?         □           □            □
 Do construction works (including PPP and PFI) take into      □           □            □
 account whole life costs and a sustainability appraisal,
 tracked through from specification, design, estimating,
 contracts, to on-site delivery and maintenance, and
 provision for decommissioning? (i.e. sustainable
 procurement)
 Is the use of sustainable products and processes in                      □             □                □
 refurbishment, design and construction encouraged and
 supported, including the use of ethically sourced products
 which can be recycled at end of use?
 Does the procurement strategy contribute to the Council‟s                □             □                □
 wider social, environmental and ethical responsibilities,
 ranging from Fair Trade to ethical investment?
 Is procurement managed in a way to support the local                     □             □                □
 economy by opening the market for local supply of goods
 and services at Best Value (the Local Multiplier 3 idea)?
 See also purchasing „green‟ electricity (under economic
 development)




This is a chapter of the Sustainable Scotland Network‟s Best Value & Sustainable Development Tookit. The
full version of the Toolkit and contact details can be found at www.sustainable-scotland.net/bestvalue

This chapter provides a self-assessment questionnaire outlining Paths to Improvement. This is designed to
enable you to assess your current position. It also sets a framework within which you may, step by step,
progressively engage more fully with sustainable development.

It must be stressed that the process of continuous improvement is not prescriptive:
        If this chapter does not pose the right questions for you please adapt the questionnaire accordingly.
         Many local authorities have done this, to great effect.
        It is also not intended that the questionnaire should be used solely as a checklist with „yes‟ or „no‟
         answers. Please add detail, such as – what evidence do you have to show that policy is being
         implemented? Who is responsible for this?

The Sustainable Scotland Network is the network of local authority sustainable development officers and
advocates from Scotland‟s 32 local authorities. The organisation seeks to promote good practice and
improvement in local authorities‟ sustainable development performance.

				
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