Procurement manual: guide to procurement within BERR. Section A: policy
URN No: 08/1509/A1
Department for Business, Enterprise and Regulatory Reform procurement manual section A: Policy
A. POLICY
General Public Procurement Principles
BERR Procurement Principles
Competition
Electronic Purchasing
International Obligations
Small and Medium Sized Enterprises
Environmental Issue in Purchasing
Social Issues in Procurement
Public Procurement and Race Equality
A.1. GENERAL PUBLIC PROCUREMENT PRINCIPLES
A.1.1 Contents
Definition of Procurement
Value for Money
Commitment to Competition
A.1.2 Definition of Procurement
• Procurement covers the acquisition of goods, services and works projects from 3rd parties, including some which are internal (i.e. PTSC)
• Procurement covers the full lifecycle management of the acquisition.
The term "Procurement" as used in the Department refers to the process by which goods services and works are acquired from third parties. This is a lifecycle process that covers from the initial purchase concept through to the end of the life of the purchased asset or service.
A.1.3 Value for Money (VfM)
'Value for money' is defined as the optimal combination of whole life costs, service delivery and quality necessary to meet the customer's requirements.
In procuring goods, services or works, all departments are responsible and accountable for achieving value for money (VfM). In addition departments are urged to seek continuous improvements in value for money.
A.1.4 Commitment to Competition
It is policy that value for money is best achieved by competition unless there are compelling reasons to the contrary. Competition promotes economy, efficiency and effectiveness in public expenditure and contributes to the competitiveness of suppliers. It is government policy to enhance the competitiveness of UK and EU companies and strengthen supplier markets through the development of world-class professional procurement systems and practices.
Competition is the cornerstone of procurement policy in pursuit of value for money, offering mutual benefits to public sector customers, tax payers and suppliers who are in a better position to win business internationally.
The White Paper “Our Competitive Future: Building the Knowledge Driven Economy”, December 1998, re-affirms Government commitment to competition. Further, it supports the commitment to more effective collaboration between businesses and with business to drive quality through the supply chain.
A.2 BERR PROCUREMENT PRINCIPLES
A.2.1 Contents
Best Practice
BERR Procurement Strategy
A.2.2 Best Practice
The Department strives for best practice procurement at all times. This includes the following approaches:
• Seeking to match cost savings that are achieved by best practice private organisations;
• Being well informed, acting as an intelligent customer;
• Seeking an integrated procurement process from “cradle to grave”; and
• Being a competent contract manager.
The BERR policy recognises the need for continuous improvement in public sector procurement processes. Public procurement must be benchmarked against best in class in order to play a constructive part in that process. BERR is committed to increasing the use of electronic commerce, increasing collaborative procurement, improving procurement performance measurements and increasing professionalism among procurement staff
As well as adhering to the best practice approaches listed above it is also necessary to bear in mind other Departmental polices which may impact in some measure on how procurement is executed. Amongst these are the following:
• Policies on small and medium sized firms
• Polices on environmental issues
• Equal Opportunities
A.2.3 BERR Procurement Strategy
The Department’s strategy for procurement is that it be carried out by the Management Unit best placed to act as the intelligent customer. This has effectively resulted in the following procurement routes evolving:
• Specialist centres of expertise: Where goods or services are purchased for the entire Department in one area; and.
• Frameworks: General or specific goods or services required by either one management unit or possibly might be used by other parts of the Department by way of framework arrangements and agreements.
Further details on Procurement Routes can be found in Section C.2.3 - Procurement Routes.
Procurement guidance and advice is provided by Procurement Policy Services (PPS). PPS is a section within the Commercial Office of Information and Workplace Services (IWS). PPS branch is at the centre of the Department’s procurement organisation. PPS issues guidance, provides assistance with various day-to-day issues and is responsible for issuing procurement strategy guidelines for the Department. Further information, for those with appropriate access rights, may be found on the BERR Procurement Intranet site.
A.3 COMPETITION
A.3.1 Contents
Supplier Competitiveness
Working with Suppliers
A.3.2 Supplier Competitiveness
It is a fact that many sectors of British industry are dependent on public purchasing. Therefore the level of purchasing standards can have a major impact on the competitiveness of firms that do business with the government.
Competition has always been the cornerstone of Government’s procurement policy as a means of achieving best value for money. Public contracts that are awarded following an open and transparent competitive tendering process instil confidence in those that take part – even those not fortunate enough to win the business - and provide all companies with a keener competitive edge.
Not only does competition help achieve value for money, it also provides fair access to work opportunities paid for by the taxpayer.
A.3.3 Working with Suppliers
Although the Department’s buying power may leverage greater value for money one should also be prepared to work with suppliers to ensure a win-win situation. This can improve both government and supplier performance. Clearly it is important to ensure that the best price is obtained but it is equally important to avoid adversarial approaches when dealing with suppliers.
Dealing with suppliers in a constructive manner built on a competitive approach and not using short-term adversarial methods leads to cost savings and better quality, which mutually benefits both parties.
There will be occasions when there is a need for more complex long terms contracts. In these cases one should enter into only contractual incentives that promote continuous improvement.
A. 4 ELECTRONIC PURCHASING
A.4.1 Contents
General
e-Purchasing
A.4.2 General
The use of Communication and Information Technologies (IT) is central to the Government goal of operating a knowledge driven economy. BERR is seen as playing a lead role in the promotion of all aspects of e-Commerce therefore procurement processes need to be designed to keep pace with these opportunities.
Initially the Department introduced the Government Procurement Card for small value purchases, which it saw as an introduction to the enablement of electronic commerce. More detail on this can be found in Annex 1 - BERR Purchasing Cards.
The Department subsequently embarked on an e-Purchasing project discussed further in the next sub-section.
A.4.3 e-Purchasing
The Department has in place a self-service purchasing and procurement tool effectively building on the existing MENTOR (ORACLE Financial) platform in use at BERR. E Purchasing allows the authorised individual purchaser to select and procure from on-line catalogues. The process involves a finite number of users (buyers and approvers) and a limited offer of categorised goods and services.
The system provides the functionality for product selection, creation of the purchase requisition, routing for approval and generation of purchase order. It is an online lifecycle purchasing approach.
The current categories of goods and items available for purchase, as of summer 2004, are as follows:
• IT
• Mobile phones
• Stationery
• Training
A.5 INTERNATIONAL OBLIGATIONS
A.5.1 Contents
General
A.5.2 General
All procurements undertaken must be fully compliant with the Government’s obligations under relevant EU Directives and the World Trade Organisation (WTO), formerly General Agreements on Tariffs and Trade (GATT).
Such obligations covering public sector purchasing exist to ensure that there is effective competition in public procurement and to ensure the removal of obstacles limiting the free movement of goods and services. These obligations are embodied in U.K. law. They are very real and must be adhered to. If obligations are broken in any way, procedures may be suspended and decisions set aside or corrections made. In extreme cases involving the breach of the European Union (EU) or WTO obligations the Secretary of State may be taken to court.
Further information is available in the following sections of this manual:
• Section D.5 - EU Public Procurement Directives;
• Section E.8 - EU Directives;
• Section G - A Guide to the EU Service Directive; and
• Section H - A Guide to the EU Supplies Directive and WTO Government Procurement Agreement.
A.6. SMALL AND MEDIUM SIZED ENTERPRISES (SMEs)
A.6.1 Contents
General Policy Objectives
Encouraging SMEs
Statistical Requirements
Small Business Service and Other Sources of Advice
A.6.2 General Policy Objectives
It is one of the main pillars of BERR policy to foster the creation of small and medium sized enterprises (SMEs). Currently a small company is defined as one employing 50 or less full time people and an SME is one employing 250 or less people. It is clear, simply on value for money grounds, that there is a good case for taking steps to remove all and any possible barriers to the participation of small and medium sized enterprises in public procurement.
A.6.3 Encouraging SMEs
Wherever possible SMEs should be encouraged to participate in public sector contracts. This does not mean however that larger firms may be discriminated against. Particular steps that may be taken to encourage SMEs are as follows:
Facilitate access to procurement information;
Use a flexible approach to Quality Assurance (QA) requirements; and,
ensure the prompt payment of invoices - often crucial to a SME's survival.
When dealing with small firms, the following checklist may prove useful:
• Locate and create a comprehensive list of suitable small firms, see; www.supply2gov.uk
• Look for local suppliers (but bearing in mind EU requirements),
• Include a small firm on every new bid list,
• Simplify requirements (keep procurement documentation as simple as legally possible),
• If it is possible, consider splitting orders into smaller parts which might be appropriate to small firms. Please also consider the aggregation Directive which states that contracts must not be split to avoid compliance with EU rules, by making many low value contracts from one large contract.
• Conduct any post tender dealings fairly.
A.6.4 Statistical Requirements
In order to help facilitate BERR's ability to gather statistics on the employment of small firms, ensure that the BERR Invitation to Tender documents are used. These documents asks that any bidders complete a "suppliers form" with certain valuable information such as the number of Full time equivalent employees they employ.
A.6.5 Enterprise Business Group and Other Sources of Advice
Any specific advice required in connection with doing business with small firms can be obtained by contacting the Enterprise Business Group (EBG), including information on Supply2gov.
The magazine “Government Opportunities (GO)” also gives details of tendering opportunities for small firms. This magazine may be found on line at the Public Procurement website.
A.7. ENVIRONMENTAL ISSUES IN PURCHASING
A.7.1 Contents
Introduction
Key Points
A.7.2 Introduction
Procurement presents the Department with many opportunities to apply both departmental and Government's commitment to adopting practices that promote sustainable thinking. This can be achieved by building sustainable considerations into all aspects of the procurement process.
A.7.3 Key Points
Identifying the Need & the Business Case
This is a key stage in considering sustainability issues whilst considering the need, affordability and both efficient and effective use of financial resources.
The new consolidated procurement directive for services, supplies and works contracts incorporates developments in case law which favour the inclusion of environmental and social concerns/requirements where these are related to the subject matter of the contract .e. g. there is specific reference to the use of a technical dialogue before the launch of a procedure for contract award to seek advice, input which can be used to formulate the specification, as long as this does not distort competition.
A blanket approach to sustainability issues is clearly not possible given the very different nature of goods and services nor is it necessarily possible within these two categories. However, sustainability issues should be considered on a contract by contract basis to ensure relevance.
Internal customers need to work closely with the wider stakeholders when developing the requirement to ensure understanding and appropriate prioritisation of sustainable development policies.
Procurement can be proactive in promoting Internal customers to consider the following points:
- Scoping the need, consideration should be made as to whether existing resources (goods or services) can meet the need through RETHINKING the need and service instead of a product; REDUCE e.g. distance travelled; REUSE e.g. packaging and RECYCLE e.g. paper or ELIMINATE this requirement altogether.
- DISPOSAL- of existing assets and/or equipment and discharge of existing contract might include: Disposal of IT equipment or Cleaning up contaminated waste. This gives us the ability to ensure the contractor is responsible for continuing actions following discharge of the contract.
• Challenge the requirement before purchase – ask the internal customer do we need this product or service? Can the need be met another way? Are other projects running which can meet the requirement without the need for a bespoke procurement activity?
• Request supporting evidence and documentation from those requesting the product/service especially in terms of quantity/type so that you can spend time assessing the constituents and running costs of a product.
• Consider the method of delivery, packaging and packaging disposal/take-back and in the case of services, also consider travel, working location & materials etc.
• Are there other uses for the product/service either during or post current use? Or can they be reused by another Government Department?
• Are other outcomes linked to the product/service e.g. skills transfer?
• Can this requirement be desegregated to enable the SME & VCS sectors to provide your requirements?
Has funding and the relevant authorisation been agreed?
Procurement action cannot proceed unless sufficient funds are available within an approved and delegated budget with the appropriate level of delegated authority is signed off in the business case, prior to development of the specification.
Having confirmed that there is a need to procure, the preparation of a specification will be required, detailed below.
Specification
This is the most important stage where we can demonstrate to the market place that we take Sustainability seriously.
Performance specifications are a preferable option in terms of risk and achievement of satisfaction of requirements rather than the more costly Conformance specifications which restrict supplier innovation. We can consider the inclusion of environmental aspects by specifying primary materials like recycled or recyclable materials rather than materials that cause ozone depletion which we should no longer use.
A couple of illustrations of this is that specifying the use of only 100% recycled paper and sustainable training materials for a training provision or within part of the production process specifying in environmental terms: e.g., sustainable timber and “green” electricity.
The specification must be a clear, unambiguous, comprehensive statement that describes the purchase requirement in full. It is the most important document in the procurement process as it specifies the requirements (thus influencing the proposed solutions) and can be referred to in the event of any disputes arising.
Consequently it must be clearly understood to prevent misinterpretation of the scope, quality, volume and nature whilst not being too restrictive to potential suppliers.
It should include such matters as specifying basic materials, specifying production processes, inclusion of eco-labels, award criteria weightings reflecting sustainable issues and the inclusion of environmental terms and conditions within the main body of Departmental terms and conditions
Whilst ensuring that sustainability requirements and standards do not go beyond the subject of the contract. It is possible to promote opportunities for innovation from the suppliers in the market place by offering a ’request for variants’ section within the specification. This gives suppliers the scope to demonstrate their commitment to sustainability and the ability to develop innovative alternatives to existing market provision.
When considering the bids at the award stage, the contracting authority can then decide which option best meets its needs, according to the criteria previously decided and made clear in the contract documentation. This enables an affordability assessment in relation to higher sustainability requirements whilst retaining the choice of the basic option without the need to re-advertise. It also creates a further opportunity for the Department to improve value for money and ensure that the solution risk remains with the supplier
Please note, where a contracting authority says it will accept a variant bid it cannot subsequently reject the variant bid solely because if successful the bid would result in a supply rather than a services contract or a service rather than a supply contract (Article 25(4) Directive).
The specifications must consistent with the provisions of the EC Procurement Directive. Further reading is available in the Procurement Manual at E3 Specification
Selection Stage (Supplier Sourcing)
One of the main points here is that the requirements of any candidates must relate directly to the contract they are being asked to undertake. The Public Procurement directives provide that the Department can request proof of technical capacity and some of this proof may be related to environmental issues.
Suppler sourcing is a useful stage at which we can stimulate the marketplace in terms of reinforcing the Government’s long-term goal for sustainable development. Suppliers can be identified who do not meet certain basic requirements and can therefore be excluded from participating in the tendering process. Secondly, the selection can also take account of certain permitted sustainability criteria.
The process of supplier sourcing, including an appropriate appraisal, must ensure that all potential suppliers are treated equally and that the decision to reject a candidate is proportionate to the seriousness of the gap in supplier profile and the profile of the particular contract.
Please refer to the Procurement manual at E4 Sourcing and Supplier Appraisal
Tender Evaluation
The Government and Departmental policy is that all contracts must be awarded on the basis of value for money. This involves the consideration of whole life costs, which in turn encourages the consideration of environmental issues. Therefore the selection of suppliers most able to deliver the requirement relating to the capacity and capability must be directly relevant to the subject of the contract.
Under EU Public Procurement Directives a set of rules list the criteria for determining the Most Economically Advantageous Tender must be:
- Relevant to the subject of the contract
- Give benefit to the contracting authority
- Be consistent with basic Treaty principles
Evidence of particular aspects within sustainable development policies can legitimately be requested to assess whether the suppliers staff and organisation will work effectively and in alignment to those of the Contracting authority. However, a balance needs to be made upon requesting policies in their entirety as it is unlikely that all aspects will be relevant to the contract in question.
The evaluation must include an appropriate process of appraisal for bids where sustainable factors are identified and points awarded. Since sustainability is a relatively new concept there will be a limited supply base so suppliers who score low on any sustainable assessment would be discounted.
To overcome this it would be necessary to give suppliers opportunities to describe any steps which are being taken to progress their own companies sustainability and supply chain sustainability including key milestones and likely readiness for reassessment. In such cases where satisfactory evidence is presented, BERR’s procurement teams can support you and the suppliers who are proactively progressing embedment of sustainable development by including them in the tendering process. If evidence is not forthcoming these suppliers should not be invited to participate in the tendering process.
Discussion with potential suppliers should include consideration of the following issues:
• Is there active challenge of the supply chain on environmental commitment?
• Do they analyse the energy and water consumption relating to the product/service provision?
• Method of delivery, packaging and packaging disposal/take-back
• End of life management – will the supplier take-back & recycle? If not consider your responsibility – disposal cost if not recyclable.
• Where travel is required/proposed, is the journey necessary? Is there consideration of alternative modes or combinations of transport? Are routes planned so that travelled miles are reduced, taking due regard for avoiding congestion areas and black spots. This is not intended to discriminate against suppliers further a field or internationally located merely to test the ability of suppliers to consider methods and timings of any necessary journeys.
Purchasers should be aware that business entities within the Small and Medium Enterprises (SME), Black and Minority Ethnic (BME) and Voluntary and Community Sector (VCS) sectors will unlikely have the capacity to provide the above evidence so could be discouraged to submit a tender proposal. Therefore you must consider this closely in that disadvantaged suppliers maybe able to meet the requirement and who are actively embedding sustainability. Therefore, where possible, validate the information through site visits and interviews with key staff.
Promotion and maximisation of the supplier base in terms of SME, BME and other minority owned businesses can be achieved by:
ensuring that information about procurement opportunities is disseminated to SME, BME and other minority owned businesses through appropriate networks like the BERR/Office of Government Commerce(OGC) SME Portal, www.supply2.gov , or the list of BME, SME and other minority owned business networks through the OGC guidance and contact database.
•ensuring that you give SME, BME and other minority owned businesses at a bidders conference you use, or are responsible for managing, a fair opportunity to undertake work for the Department
•encouraging partnerships and collaborations within the sectors or with larger organisations. This is often desirable in order to adequately meet the specific and specialist needs of Departmental stakeholders.
•ensuring that the Department meets its legislative obligations such as Equal Opportunities or Race Relations.
Encouraging the SME, BME and other minority sectors to compete for public sector procurements should not result in a compromise on quality and increase exposure to risk. The procurement decision must address any issues of risk working with such companies.
The BERR Procurement Policy Services team can advise on conducting supplier assessments to ensure that any suppliers invited to tender have the technical capacity and ability to:
•meet the basic standards set by the Department
•pass a financial appraisal appropriate to risk
•show they can meet the contract requirement set within the specification
•demonstrate that they can reliably deliver goods and services within required timescales
•provide customer support
•deliver value for money
•demonstrate they can meet the requirements of the procurement in question including sustainability considerations for the Department.
•comply with relevant legislation and Government policies.
Good practice and the provision of information in relation to sustainability issues for the goods and services being procured should be encouraged as this will support both the Department’s and Government’s progress against sustainable development objectives.
Further reading is available in the Procurement Manual at E12 Tender Evaluation.
Contract Management
Contract Management is the process used to ensure that what has been agreed in the contract is implemented and reviewed effectively, at the start and throughout the contract.
Sustainability can be incorporated within the procurement process in identifying: terms & conditions, Key Performance Indicators (KPI’s) and contractual obligations on both parties.
Longer-term benefits can be achieved by working with the suppliers for continuous improvement in sustainability and the opportunities for SMEs, ethnic minority businesses, social enterprise, voluntary sector to become involved with both Departmental and Government goals.
Contractual conditions themselves may contribute to reducing the impact of detrimental issues on the environment but it needs to be supplemented by an effective procurement process, taking in the specification, selection procedure and appropriate award criteria.
Contractors should be made aware that a partnering approach will not guarantee any future contracts but a mutually agreed working relationship where proactive and demonstrable progression in terms of sustainable supplier assessment will enhance future business opportunities.
The Department will need to devise a method for monitoring implementation and progression of the sustainability obligations within their contract however this method should be discussed and reviewed upon receiving suggestions from suppliers.
A time phased bar chart on an Excel spreadsheet is the simplest method for highlighting milestones and time expectations including regular review processes throughout the life of the contract. The reviews with the contractor can ensure areas of concern and problems raised are discussed along with performance monitoring.
Contract Management must have the ability to measure the performance of the service provider- “what gets measured gets done”. Key Performance Indicators (KPIs) must be established for measuring performance.
Measurements can be initially requested from potential suppliers at the tender stage and where these are agreed at the contract offer stage, will be key to assessing performance against their proposal. Other KPIs, based on customer feedback surveys, could also help to assess performance. The results of any surveys should be reported at the Contract review meetings.
It is important to use contract management as a tool for continuous improvement not only in terms of strategic supplier and supply chain management but also in terms of applying learning in terms of delivering sustainability objectives as well as other aspects of the procurement process.
Upon discharge of the contract the contractual terms and conditions can ensure the contractor is responsible for continuing actions following discharge of the contract such as Disposal of IT equipment or cleaning up contaminated waste.
Further reading is available in the Procurement Manual at E17 Contract Management and E18 Disposals.
A.8. SOCIAL ISSUES IN PROCUREMENT
A.8.1. Contents
Introduction
Opportunities for Consideration of Social Issues
A.8.2 Introduction
The scope to which social issues are taken into account during the procurement process has substantially increased with the introduction of the EU Consolidated Directive in January 2006 and with the UK Government and its Departments thinking and operating within a sustainable manner.
There will be instances where some service contracts by virtue of their nature, will also have to incorporate legislative restrictions and so increasing the social rather than environmental issues within sustainability.
Please refer to these notes and the previous chapter A7 which talks about Sustainability throughout the procurement process.
A.8.3 Opportunities for Consideration of Social Issues
The following list gives examples of where circumstances may allow for social issues to be taken in to account in the procurement process:
- Where the Department has legal obligations of a social nature: e.g., the Race Relations Act where a contract may call for the monitoring of individual ethnicity. This obligation be passed on to the contractor via a contract condition.
- Where the early consideration of social issues is vital: e.g., disabled access availability when a new piece of work is being tendered.
- Where the contract calls for particular skills or expertise of a social nature in the specification. An example of this is a legitimate specific language skill requirement or other expertise to meet the needs of a specific community.
As with environmental issues, it must be stressed that the Department should not ask tenderers' about general policies that go beyond the relevant considerations for a particular contract. For example, the details of the company’s workforce as a whole rather than those involved in the contract would not be relevant or appropriate. It is also not permissible to include a requirement to employ a certain percentage of local people or to include in the award criteria elements that do not provide a benefit to the Department.
A.9. SUSTAINABILITY ISSUES IN PROCUREMENT- PUBLIC PROCUREMENT AND RACE EQUALITY
A.9.1 Contents
Background
Key Expected Outcomes
How to Build Race Considerations
Race Equality in the Procurement Cycle
A.9.2 Background
The Race Relations (Amendment) Act 2000 which amended the Race Relations Act of 1976 has important implications for the Department. Essentially the Act makes illegal any discrimination in all departmental functions including procurement. Furthermore it imposes a legal obligation to eliminate discrimination and to promote equality of opportunity and good race relations.
Even when departmental functions such as contracting of services is carried out by an external supplier the Department is responsible for meeting that duty. Although Contractors themselves must not discriminate they do not have the same legal obligation to promote equality of opportunity. Hence there is a need to, wherever possible, build into the procurement process race equality considerations. This is all very well and good but putting these principles into practice in a procurement context is challenging. The following sub-sections are designed to help with this consideration.
A.9.3 Key Expected Outcomes
The following points are the expected outcome in terms of race equality that should be expected from any procurement contract:
- All contracts must be delivered in a way that is clearly non-discriminatory as well as promoting equality of opportunity.
- There should be no greater dissatisfaction rate in users of the contracted services based on the users' racial profiles.
- Contractors should be representative of the local population in respect to ethnic diversity.
- Contractors willing to work voluntarily to promote equality beyond that legally required of them by the contract should be encouraged to do so.
A.9.4 How to Build Race Considerations
The points below provide guidance in how to build race considerations:
- Include race equality considerations in procurement strategies and policies.
- Maintain a consistent approach to race equality at each and every stage of the procurement process.
- Consult users of the service on their requirements and initiate discussions with potential suppliers.
- Take whatever steps available to ensure a level playing field for all potential contractors regardless of size or ethnicity of ownership.
- Consider race equality when defining requirements at each stage of the contract process and monitor results as well as planning or improvements.
- Encourage contractors to take voluntary steps to promote race equality after contract award.
A.9.5 Race Equality in the Procurement Cycle
The following is a brief summary of the main points where race issues should be considered within the procurement cycle.
Definition of Need:
Determine if race equality is a core requirement.
Consult all users and potential users.
Evaluate existing provisions and identify improvements.
Consult with providers.
Document all race requirements that have been determined.
Specification and Contract Conditions:
Include all race requirements in draft specifications and contract documents.
Consider whether specific contract conditions covering race might be included.
Selection Process:
Check that the company has no known history of discrimination.
Check that the company has the ability to promote race equality in employment and service delivery.
Tender Invitations:
Build any race considerations into the specification.
Provide clearly in the specification any race equality criteria that must be adopted.
Evaluation & Award:
Apply the relevant criteria relating to race equality bearing in mind the offer that provides best overall value for money.
Managing the Contract:
Check that the Contractors performance meets race equality requirements.
Help to alleviate any difficulties as and when they arise.
A.10. Points to note
10.1 Action for Procurement Staff
As Departmental purchasers you are asked to consider the costs and benefits of undertaking procurement in a sustainable manner, taking note of the following:
• Determine if precedents have been established, by reference to any existing sources within BERR, other Government Departments (OGD’s) or in industry, when considering whether or not to specify environmentally friendly goods or services. If not, consider whether there is sufficient information to include environmental costs in the procurement life cycle cost analysis.
• Always ensure that environmentally friendly products are fit for the purpose for which they are intended.
• Carry out regular reviews of the costs and benefits where sustainable procurement involves paying a "premium”.
• Where applicable, ensure specifications, as a minimum, reflect the Department’s Sustainable Procurement strategy.
• Make environmental considerations plain and unambiguous where they are included within specifications. As a simple example, if ordering furniture one might include within the specification that if woods are utilised they should be from sustainable sources.
• Procure goods and services whose specifications include environmental criteria in the normal manner, using competition and seek best value for money by ensuring the contract award criteria reflects a weighting towards environmental criteria
• Observe EU Directives and UK Regulations by not excluding tenderers from bidding on non-economic grounds. Bidders can only be excluded if they fail to meet the specific sustainable procurement requirements, not because of general environmental considerations.
• Consider whole life cost as part of the costs and benefits analysis in relation to any environmental advantages in use and disposal during the evaluation of bids.
• Give preference to products with Eco-Labels or suppliers with BS7750 /ISO14001 or equivalent (including EMA registered sites) where environmentally friendly products or services have been specified and the decision between competing bidders is extremely close.
• Always procure environmentally friendly products from amongst those who offer value for money where no environmental requirements are specified, and all other things are equal, including quality.
This policy applies to the whole of the BERR. Responsibility for implementation of the Department’s procurement policy relating to environmental issues rests with management with the authority to commit or incur expenditure and individual purchasers. If you require advice contract Procurement Policy and Services within IWS on sustainability issues connected to the Department’s Estate.
In addition, BERR is accredited to the environmental management standard ISO 14001, in relation to management of the headquarters estate. Advice on the procurement implications is available from EFM.
A.10.2 General Sustainability points
When implementing BERR's sustainable procurement policy do not lose sight of the fundamental objectives of Government procurement which are value for money and supplier competitiveness.
Sustainable procurement should be viewed as an opportunity for industry to exploit new markets as well as a contribution to sustaining natural resources and the prevention of pollution. Both Europe and the USA have well-developed environmental markets and you can increase business opportunities by encouraging UK suppliers to think green when bidding for Government contracts. However, before specifying sustainable products or services ensure that suppliers are prepared or able to meet your requirements and that UK suppliers in particular are not disadvantaged.
In order to successfully pursue BERR's sustainable procurement policy you need to be an intelligent customer who is familiar with the products that you are seeking to purchase, have a good knowledge of the market you are operating in and maintain a dialogue with your potential suppliers. This is particularly relevant for environmental issues in purchasing so that you can keep track of developments. If you do not have this basic knowledge you should seek expert advice from a procurement professional in your purchasing field.
Various articles have been written about sustainable procurement and the impact of these across the Department. The Department’s sustainable procurement strategy is available on our website. Procurement Bulletins 5&6 /2005 and 10/2003 also cover sustainable procurement. General life cycle costing is covered in CUP Guidance No 35, however it does not take into account environmental issues. Environmental life cycle costing is a relatively new area. Information is often patchy and unreliable and it should not be attempted by the inexperienced. As a general rule you should aim to use existing information whenever possible.
Financial savings, increased efficiency and a better environment can also be obtained by considering more sustainable alternatives such as:
the re-use or reallocation of assets in preference to buying new;
minimisation of waste;
revising procedures to minimise their environmental impact and duplication of effort across Government Departments by utilising existing frameworks; and,
recycling goods and waste.
If the purchase cost for the Department includes a saving that is due to the recycling of assets, which are returned to suppliers, the saving should be separately identified and may need to be treated as an "appropriation in aid". Guidance in this Manual on the disposal of goods (Chapter E19) should be consulted where they are sent for recycling. Any receipts should be handled in accordance with the Accounting Memoranda.
When evaluating bids, give appropriate weight to the environmental considerations in the light of your priorities. Do not accept unsubstantiated claims by suppliers and unrecognised environmental labels on products. Environmental considerations must be based on available scientific evidence and not simply on good intentions.
Environmental criteria should always be included in the specification part of a contract rather than in a contract's general terms and conditions. This ensures that the contractor is fully aware of their responsibilities and that the terms and conditions can include