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Beta Testing of Sustainable Procurement Tools

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1 Beta Testing of Sustainable Procurement Tools
Sustainable Procurement Topic Support Network University of Edinburgh 03 November 2014 Barbara Morton, Sustainable Procurement Ltd

2 Objectives To provide an update on the Procurement Reform (Scotland) Act 2014 To introduce / test / discuss the enhanced tools To take feedback To discuss next steps

3 Beta Testing of Sustainable Procurement Tools Agenda
10:00 Welcome and Introductions Update on the Procurement Reform (Scotland) Act 2014 & discussion (Josephine Mitchell, Scottish Government) 10:30 Prioritisation – run-through the tools highlighting enhancements (Barbara to lead) 11:15 Sustainability Test – run-through the tool and discussion of its functionality (Barbara to lead) 12:30 Lunch 13:15 Flexible Framework – run-though and discussion of functionality - including Action Plan & guidance (Barbara to lead) Discussion of guidance / fit with other developments in and for the sector (All) 15:00 Next steps 15:30 Close

4 Scottish procurement landscape
Spend by sector (£m) Spend by commodity (£m)

5 The Scottish Model Of Procurement:
Sustainability Cost Quality Improving supplier access to public contracts Maximising efficiency and collaboration Embedding sustainability in all we do Delivering savings and benefits Vision: Through the Scottish Model of Procurement, to be world leaders in innovative public procurement, enabling the best outcomes for Scotland Procurement at the heart of Scotland’s economic recovery Outcomes not outputs Key enabler of policy development and service delivery Strong political leadership Single overall strategy Centres of Expertise Focus on collaboration

6 Procurement Reform (Scotland) Act 2014
H R E S O L D Duties Specific measures / duties Regulations Guidance G D E U N T E Y A Sustainable procurement duty Health & social care procurement Contract award without competition Procurement strategy & annual report Annual report on procurement activity in Scotland Publication of notices on PCS S D U U S T T Y I N B Community benefit requirements Exclusion of bidders Selection of tenderers / award of contracts (inc. Workforce Matters Technical specifications Prohibiting charging for participation in process Giving of reasons (Debriefing) Contracts register Reuse / Remanufacture / Recycle REMEDIES The Procurement Reform (Scotland) Act received Royal Assent in June 2014, building on the work achieved so far in the reform of public procurement in Scotland. It will establish the laws regarding sustainable public procurement, and allow us to maximise the economic benefit brought to Scotland from effective and efficient public procurement activity.  The Act provides Ministers with powers to make Regulations and to issue Statutory Guidance on issues such as workforce matters and the Sustainable Procurement Duty. Work on the development of those Regulations and the supporting Statutory Guidance is being taken forward together with work on the Regulations that are required to ‘transpose’ (implement) the three new EU Directives into Scots law enabling robust and consistent engagement with stakeholders. The Act focuses on a small number of general duties on contracting authorities regarding their procurement activities and some specific measures aimed at promoting good, transparent and consistent practice in procurement. It also places some administrative requirements on larger spending contracting authorities to publish procurement strategies and annual reports, which will aid visibility of the purchasing activities of these bodies and how they will meet their procurement obligations. All of which are can be underpinned by an enforcement regime of remedies. The provisions in the Act are designed to shift perception that public procurement is about lowest price to a shared understanding that it is about better value. It is about making it simpler to do business with the public sector, and simpler for the public sector to spend money wisely.

7 Procurement Reform (Scotland) Act
Business friendly: Socially responsible Consider: Improving Economic, social, environmental, wellbeing and reducing inequality in the area. Involving Small and medium enterprises and 3rd sector bodies including supported businesses. Promoting Innovation Sustainable Procurement Duty Procurement Reform (Scotland) Act 2014 8 General duties (2) A contracting authority must also comply with the sustainable procurement duty. 9 Sustainable procurement duty (1) For the purposes of this Act, the sustainable procurement duty is the duty of a contracting authority (a) before carrying out a regulated procurement, to consider how in conducting the procurement process it can (i) improve the economic, social, and environmental wellbeing of the authority’s area, (ii) facilitate the involvement of small and medium enterprises, third sector bodies and supported businesses in the process, and (iii) promote innovation, and (b) in carrying out the procurement, to act with a view to securing such improvements identified as a result of paragraph (a)(i) (2) The contracting authority must consider under subsection (1) only matters that are relevant to what is proposed to be procured and, in doing so, consider the extent to which it is proportionate in all the circumstances to take those matters into account… (4) In this section, references to the wellbeing of the authority’s area include, in particular, reducing inequality in the area.

8 Key Questions in the ‘Embedding Project’
When the PR Bill / Act comes into effect will public sector organisations in Scotland be clear about: What they are required to do? How they are required to do it and report on it? How their performance will be assessed? What happens if they fail to deliver? Will there be tools and guidance to support them and will these be: Sufficient, consistent, clear, unambiguous, easy to access, easy to use?

9 Sustainable Procurement Landscape
Procurement Reform Act EU Directive Regulatory Reform Bill Construction Procurement Review Procurement Capability Assessment PCS Tender Flexible Framework Self-assessment Procurement Journey E-learning modules Marrakech Training – ‘Sustainable procurement is good procurement’

10 Deliverables 2. Beta Testing 1. Embedding Project
Review of policy, strategy and systems Prioritisation methodology Updated Flexible Framework Case studies Guidance 2. Beta Testing 1. Prioritisation methodology 2. Sustainability Test / Contracts Tool 3. Updated Flexible Framework with Action Plan 4. Guidance 5. Case studies

11 Working Methods during Embedding Project
Engagement and testing through Working Groups: Prioritisation methodology Representatives from: Scottish Government Scotland Excel APUC NP Health / Greater Glasgow & Clyde Health Board Scottish Parliament 2. Flexible Framework NP Health South Ayrshire Council

12 Prioritisation – Aims and Objectives
“Deciding to use, apply a specific strategic approach (Spend Prioritisation) for the organisation, a particular services, or range of commodities/groups” “Prioritisation methodology - quick, simple - won't consume too much extra time” “I enjoyed it all but really liked the applying prioritisation and the review of risks” Buy-in to Prioritisation achieved during MTF training. Scotland at an advantage due to available spend data.

13 National Outcomes Link to Single Outcome Agreements /
Service Level Agreements Cross reference with Local Authority Benchmarking activity Links to reporting requirements of all public sector bodies in Scotland Anticipate / reflect the reporting requirements of the Procurement Reform Act To tailor to Scottish environment and building on Community Benefits Monitoring Framework – linking to National Performance Framework. Working with National Performance Unit (SG) to ensure that there is clear line of sight between National Outcomes, indicators for buyers and outcomes and outputs in contracts. (Can mention employability research if required: To identify the additionality in terms of employment and skills from CBIP clauses Do this as a national level in terms of the overall contribution to National Outcomes. Recommendations on monitoring and evaluation of these clauses in the medium to long term – may result in refinement of existing Monitoring Guidance). Plan to extend this practice across 16 National Outcomes. Should result in opportunity to apply a consistent approach across the public sector – including consistency of monitoring and reporting – Measuring the right things (refer to Viv’s Rapid Evidence Review?) Our public services are high quality, continually improving, efficient and responsive to local people's needs We live in a Scotland that is the most attractive place for doing business in Europe We realise our full economic potential with more and better employment opportunities for our people We are better educated, more skilled and more successful, renowned for our research and innovation We have tackled the significant inequalities in Scottish society We live in well-designed, sustainable places where we are able to access the amenities and services we need We have strong, resilient and supportive communities where people take responsibility for their own actions and how they affect others We value and enjoy our built and natural environment and protect it and enhance it for future generations We reduce the local and global environmental impact of our consumption and production

14 Scottish Government Priorities – May 2013 Reflected by the National Indicators
‘Organisational Priorities Policy & Strategy’ (Scottish Government and core agencies and NDPB’s) Improve levels of educational attainment Increase exports Improve people’s perception of their neighbourhood Improve Scotland’s Reputation Improve the condition of protected nature sites Improve mental wellbeing and end of life care Increase the abundance of terrestrial breeding birds (biodiveristy) Improve the state of Scotland's marine environment Reduce Scotland’s Carbon footprint Increase the proportion of journeys to work made by public or active transport Improve support for people with care needs Improve the skill profile of the population Improve the quality of the healthcare experience Reduce Waste Generated Increase renewable energy production Improve children’s services Improve the responsiveness of public services Reduce death on Scottish roads Reduce Reconviction rates Increase the number of graduates in positive destinations Increase No of Business Reduce the proportion of people living in poverty Increase the number of new homes Improve digital infrastructure Widen the use of the internet Increase research and development spending Improve perceptions of the quality of public services Increase the proportion of young people in learning training or work Improve access to suitable housing options Reduce Traffic Congestion Large organisation

15 ‘Organisational Priorities’
Clackmannanshire Council Priorities – May 2013 ‘Organisational Priorities’ Policy & Strategy Carbon Reduction Recyclable/ Recycled Goods Fair & Ethical Trade Local Sourcing Innovation Health Improvement Equality and Diversity Accessibility Waste Reduction Community Benefits Construction Energy and Resource Efficiency A Healthy and Protected Environment Regeneration, Jobs and Skills Cost Savings Safer Communities Transport Climate Change Adaptation Small organisation

16 University of Edinburgh Strategic Plan diagram 2012 -2016
…an overarching theme for this Plan is to increase our global impact and our contribution to society.” Prof. Sir Timothy O’Shea Principal & Vice-Chancellor, The University of Edinburgh University of Edinburgh Strategic Plan diagram …an overarching theme for this Plan is to increase our global impact and our contribution to society.” Prof. Sir Timothy O’Shea Principal & Vice-Chancellor, The University of Edinburgh Strategic themes including outstanding student experience, equality and widening participation – expected of any modern university Add Global Impact, Social Responsibility and the themes of lifelong community and partnerships relates to the people who supply us © The University of Edinburgh

17 Our Sustainable Procurement Goal
to procure goods and services in ways that maximise efficiency & effectiveness while minimising social, environmental and other risks. Procurement Strategy linked to University Strategic Plan Procurement professional influence to exceed 80% Collaborative procurement on target 30% So what is our sustainable procurement goal – read it here. Well worn phrase, probably used in many institutions and companies: but how do we apply it…. More later. When buying through the University’s purchasing systems, or using other University contracted suppliers, we want environmental and social and risk issues to be considered. First point to make is that we have set up systems and processes not just policies and strategies - so that buyers across our campuses can be assured that (in so far as we can within public procurement law) more on that later too, we have taken environmental and social issues into account. Our procurement strategy links this goal into the aspirations of the University strategic plan. Our award winning professional procurement team influence most of the expenditure and we collaborate with other universities, colleges and public bodies on about 1/3 of our spend and thus we are aiming to influence beyond our own campus to our collaborators (and competitors) for sustainability. © The University of Edinburgh

18 TOOLS: 1. Prioritisation – Aims and Objectives
Role of prioritisation Risk and opportunity assessment Trail – ‘Golden Thread’ Audit When and who? Simplicity /complexity? Use: Demand review – can need be met in a lower risk way? Strategic review at high level - inform procurement strategy Sub-category level Outputs and link to procurement process

19 Delivering the sustainable procurement ‘Golden Thread’
National performance framework and national outcomes Procurement journey, prioritisation Life cycle impact mapping Procurement strategies Projects, products, services of performance validation – external PCA Flexible Framework – internal assessment of performance Corporate Procurement Strategy (Procurement Reform (Scotland) Act 2014) Product and supplier selection Contracts tool Sustainability test 2

20 TOOLS: 1. Prioritisation – Aims and Objectives
Where does it sit? Link to The Procurement Journey – risk management template Link to Flexible Framework Guidance Monitoring Are we measuring the right things? Measuring the right things (Rapid Evidence Review again)

21 Early prioritisation output, based on procurement hub data. (2008/9?)
Development of contracting tool, may replace existing sustainability test, so that buyers can cross check risks and opportunities on a contract-by-contract basis.

22 TOOLS: 2. Sustainability Test
Framework /Contract level Environmental and socio-economic factors in more detail Sub-category level Link to procurement process Guidance documents Case studies and examples

23 TOOLS 3: Enhanced Flexible Framework with Action Plan
Tailored to Scottish context Updated in line with existing policy Includes a recalibration process Provides direction through Action Plans (new feature) Shows how action delivers against National Outcomes and Indicators Supports the delivery of the Procurement Reform (Scotland) Act 2014

24 Flexible Framework Working Group
Procurement Capability Assessment Procurement Reform Act Flexible Framework PCAFlexible Framework PCA Level 1 Level 2 Level 3 Level 4 Level 5 Corporate Procurement Strategy to take account of economic, social and environmental wellbeing Procurement Journey Law & Regulations Policy & SPPNs Guidance Tools Organisation’s Action Plan Action Responsibility Target Date

25 Flexible Framework Clarifying definitions and intent Strengthening guidance to show how self-assessment leads to action (plans) Making specific reference to relevant risks and opportunities e.g. ethical issues Developing toolkit to be consistent with content of other tools Populating with examples & case studies Developing Markets for Third Sector Providers Programme Providing direction

26 Flexible Framework Clarifying definitions and intent
Strengthening guidance to show how self-assessment leads to action (plans) Making specific reference to relevant risks and opportunities e.g. ethical issues Developing toolkit to be consistent with content of other tools Populating with examples & case studies Developing Markets for Third Sector Providers Programme Providing direction

27 The Nature of Community Benefit
Employability / targeted recruitment & training Supply chain initiatives creating opportunities for SMEs creating opportunities for social enterprise workshops / mentoring Community consultation / engagement / events Educational initiatives Buyers are risk averse

28 CBCs and Social Enterprise / Social Firms to date
Successful adoption Unity & Crescent Kitchen – Catering at a number of venues Reboot – Highland Council Remploy – Gullane Fire Station furniture Action for Children – employability service at the Velodrome Kibble – painting and decorating NSGH Gal Gael Trust – Queens Baton Relay

29 In partnership with (Next 3 slides on an as required basis)
Five categories; Need to reach level in all 5 categories before progression; Re-design in light of feedback during training Proposed recalibration – links to Bill In partnership with

30 In partnership with Foundation (L1(a) content)
A Corporate Procurement Strategy showing high level organisational goals/objectives. Criteria described The organisation should outline at a high level its key sustainability objectives as part of the development of its Procurement Policy or a Corporate Procurement Strategy (in line with the requirements of the Procurement Reform Bill/Act.) Suggested Evidence to Support a "Yes" Response Guidance and examples Objectives should be in line with National Performance Framework (and Single Outcome Agreements, where relevant) and should inform the development of the Corporate Procurement Strategy. Link to PR Bill / Act. Note that the Policy/Strategy should relate to the communities/ groups that the organisation represents (including partnerships). Criteria met? – If yes, no suggestions. Partial or no – Suggestions Suggested actions to meet criteria and evidence Derive clearly described key sustainable procurement objectives for the organisation. Use sustainable procurement objectives to develop an organisational policy statement for sustainability. Detailed organisation actions - if different from Suggested In partnership with

31 In partnership with LEADER (L5(c)) Criteria Question
Is best practice shared with other/peer organisations locally, nationally and internationally? Suggested Evidence to Support a "Yes" Response Communications to other organisations at a senior level on the delivery of best practice (sustainable) procurement within the organisation e.g. Chief Executive groups or sector conventions or associations. Guidance and examples e.g. AM visit to Australia, NHSScotland - visits to Canderside etc - Colin Sinclair. Opportunities to communicate with Brazil Criteria met? If no, actions will be suggested Suggested actions to meet criteria and evidence Ensure that senior management is advised on significant achievements or results with regard to sustainable procurement delivery. Identify senior management conferences, events or forums where successes can be marketed as best practice sustainable procurement. Detailed organisation actions - if different from Suggested In partnership with

32 Exercise: Identify life cycle impacts
Impacts of obtaining raw materials Impacts of manufacturing & logistics Impacts during use of product/service Impacts at end-of-life / disposal Participants divided into groups to flipchart results of this exercise. Use a familiar product such as a laptop for this exercise. Focus here is on environmental, socio-economic, reputational risks at each stage. So participants may start by identifying the raw materials used and the elements that may be impacted upon before assessing what those impacts may be - trainers should challenge them to identify as many impacts as possible – pollution, depletion of natural resources, working conditions, etc. For feedback ask one group to present ‘Raw materials’ and ask other groups to add anything new they have then move to ‘manufacturing & logistics’ etc. make sure in discussion that delegates think how they would use this for services. Also discuss how far back in the supply chain can we make a difference, reducing impacts.

33 Identify life cycle impacts – in practice
Impacts of obtaining raw materials Sourcing overseas if demand outstrips supply – impact on carbon emissions Wood should be sourced not just from legal but also sustainable forests/woodlands – forest management critical Potential impact on biodiversity of forests/woodlands if focus is only on economic viability Support development of an immature supply chain through aggregated demand Opportunities for community woodland schemes to be integral to supply chain Impacts of manufacturing & logistics Carbon emissions from transportation, particularly if local supply chains are inadequate Production of chips/pellets – is renewable energy used Competition for raw materials e.g. chipboard manufacturers Waste products from pellet manufacturing process Impacts during use of product/service Emissions particularly in ‘Air Quality Management Areas’ Shortage of qualified engineers/installers; through aggregated demand an opportunity to influence recruitment and training Disposal of waste products e.g. ash Impacts at end-of-life/disposal Disposal of ash – use as a fertiliser Disposal of boilers The Scottish Government is currently working on a new Biomass-Framework Agreement – this life cycle impact assessment developed at strategy development Stage shows how it works in practice. This is a real life example of impact mapping being used from strategy through procurement. Discuss with delegates if they plan to use this approach. 31

34 Next Steps Feedback through questionnaire Consultation process

35 Thank you for your attention
Barbara Morton

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