3 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
4 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!
5 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.
6 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.
7 WHY DO SP? Purchasing G&S that satisfy value for money (V4$) criteria but also include sustainability; Save $- improving efficiency & reducing costs- landfill charges & on-sell recyclables Better manage environmental risks; To ensure the public image of TCC as a leader in environmental management & a responsible corporate citizen; To provide an example to other businesses, industry & the community in promoting the use of sustainable G&S;
8 BARRIERS/MOTIVATORS Changing behaviours in an organisation not only requires an understanding of the levers that can push the desired changes but also a knowledge of the barriers. If you wish to improve your organisations SP performance, it is worthwhile understanding the reason to support it, the barriers against it & finding ways to overcome these barriers (CBSM).
9 KEY POINTS SP means integrating environmental considerations into purchasing decisions. Sustainable G&S have a lesser/reduced effect on human health & the environment when compared with competing G&S that serve the same purpose. There are sound reasons for organisations to support SP which include V4$, environmental leadership & risk management.
10 GOOD PURCHASING PRACTICES Planning the Purchase Drawing up Specs Tender Evaluation Plan (TEP) Tender Evaluation Process Managing the Successful Tender Feedback loops
11 SP PRINCIPLES Waste Management- Life Cycle Analysis (LCA/C2C) Recycled vs Recyclable Future Costing- life time Managing Environmental Risk Meeting Sustainability Commitments Water/Energy/CO 2 e reduction Haz Subs reduction EMS ISO 14000 Stewardship- Due Diligence/Care/GED
12 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
13 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.
14 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
17 ENVIRONMENTAL ISSUES Environmental Policy- Corporate/Business Units Information (tools) Current Product Performance Payback timeframe Price Premium- up-front cost Considerations- next sheet
18 Qs 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? CO 2 e*? Equivalent CO 2
19 TARGET G&S- OFFICE OFFICE: A4 COMS PAPER TOILET TISSUE STATIONARY TECHNOLOGY SPARE PARTS LIGHTS ELSEWHERE: PARKS CONSTRUCTION FLEET
21 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
23 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?
24 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
25 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
26 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  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.
27 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.
28 GET WHAT YOU PAID FOR The extent of monitoring of suppliers 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.
29 KEY POINTS Standard Contract Management Procedures should be used to ensure compliance with SP components of specs.Standard Contract Management Procedures should be used to ensure compliance with SP components of specs. Refer Contract Management notes.Refer Contract Management notes. Developed by DEPT of ENVIRONMENT & CONSERVATION (NSW) & Adapted from MOLINO STEWART PL. presentation.