Sustainable procurement: specification and briefing
What do we mean by Sustainable Procurement?
Procurement is the process by which organisations acquire the goods and services to meet their needs. All products and services have an impact on the environment, society and the economy. These impacts can occur throughout their lifecycles and supply chains: from raw materials extraction to production, delivery, usage and disposal.
Sustainable procurement aims to deliver long term value for money by meeting users’ requirements, maximising social and economic benefits and minimising harm to the environment.
In the context of healthcare buildings this could include a wide variety of requirements, including:
• Minimising waste – designing out waste and specifying challenging targets for the reuse / recycling of waste generated during construction and operation;
• Specifying energy efficiency – minimum requirements for energy performance based on accepted best practice;
• Using sustainable materials – avoid procuring materials that are potentially harmful to human health or the natural environment; and
• Encouraging in-built flexibility – saving time and cost in the delivery if new services and responding efficiently to changing requirements over time
Why is Sustainable Procurement important?
The UK public sector spends over £150 billion on goods and services annually, of which over £15 billion is spent by the NHS. As one of the largest organisations in Europe, the NHS has one of the biggest environmental footprints as a result of the resources it consumes and the emissions, waste and pollution it creates. As the UK’s largest employer, the NHS also has a huge impact on local economies by supporting jobs, increasing incomes and reducing health inequalities.
By procuring buildings more sustainably, the NHS can make a significant contribution to reducing the UK’s contribution to climate change and improving people’s health and quality of life. The current scale of capital spending could help to
• stimulate demand for innovative new building products and services
• increase the uptake of these across the economy,
• increase competition and reduce prices.
Not only can NHS can benefit financially from the lower whole life costs that more sustainable products and services can offer, there are a number of other areas where sustainable procurement practices can offer significant benefits:
Environmental impact - sustainable procurement is becoming much more important that in previous years, not least because there is now a significant body of evidence demonstrating the environmental impact of the NHS. For example, the NHS consumes approx 45 million GJ of energy and generates 3.4 million tonnes of CO2 emissions; creates over 350,000 tonnes of waste; and uses about 40 billion litres of water per year
Productivity - in addition to reducing this environmental impact, the procurement of more sustainable buildings can improve the quality of the patient environment, reduce patient recovery times and increase staff productivity. By adopting a more sustainable approach to briefing and specification, you can increase the long-term usability and value of your building, whilst improving your chances of accessing additional (non-health) funding.
Community engagement - the procurement of more sustainable buildings can lead to more productive partnerships with local communities and organisations, helping to improve the healthcare environment, increasing staff and user satisfaction and improving local ownership and involvement with the Trust.
Public health - finally, there is a direct link to improving public health. Providing public green space, encouraging walking and cycling, and reducing pollution from engineering and waste systems can all significantly improve public health
What constitutes value for money?
The procurement process in the public sector varies enormously in terms of complexity: from simple supply contracts to purchase equipment or consumables, to highly complex PFI contracts for the design, build and operation of entire hospital sites. Regardless of complexity, all public sector procurement must comply with the EU Procurement Directives and deliver Value for Money.
Value for Money demands that a product or service is chosen on the basis of the optimum combination of performance and cost. It goes beyond “cheapest is best” by recognising quality, fitness for purpose and risk-mitigation as important considerations. Value for Money should be assessed on the basis of whole life costs, often favouring the lower running and disposal costs of more sustainable choices.
The government’s Sustainable Procurement Task Force (which was set up in 2005 and reported back in 2006) has recommended that this approach is expanded to recognise the “knock-on” effects of procurement on the wider public sector. For example, sourcing from Social Enterprises supporting the long term unemployed reduces the burden of benefits payments; healthy school meals avoid future costs for the NHS; investing in “low carbon” buildings reduces the costs of adapting to climate change and the economic and public health damage it threatens.
Viewed holistically, value for money is not a barrier to sustainable procurement.
What do the EU Procurement Directives require?
The core requirements of the EU Procurement Directives are transparency and non-discrimination. Transparency requires equality of information for all potential bidders. Above EU thresholds, all contract opportunities must be advertised in the Official Journal of the European Union. Pre-qualification criteria, specifications and evaluation criteria must be clearly and openly stated before bids are invited. Unsuccessful bidders are entitled to debriefing, whilst the identity of successful bidders must be announced on contract award. Non-discrimination requires that all EU public sector opportunities are open to competition by all EU suppliers - regardless of country of origin. Contracts can not be awarded on the basis of location or nationality. Finally, all pre-qualification criteria, specifications and evaluation criteria must be relevant to the subject matter of the contract.
The directives are often perceived as a barrier to sustainable procurement. However, this is not the case because they state that all relevant environmental and social criteria are eligible.