Environmental and Social Considerations in Public Procurement By Mr. Karsten Andrup Pedersen Logistic Manager Municipality of Kolding, Denmark Valletta, 25-26 January 2006

Environmental and Social Considerations Agenda: Purchasing Policy Environmental considerations Social considerations The procedure of Green purchases Identifying green suppliers by questionnaires Experiences Example of purchase including social and environmental considerations: Operation of a residential home

Environmental Performance Elements in purchasing Goods Construction of housing areas Buildings Services Prequalification Technical specification Award criteria No environment Environmental Demands: Compounds Use phase Disposal phase Packaging Questionnaire on Environmental Performance Points-score system Development Award criteria becomes a demand Documented experiences on environmental management Focus on compounds and energy Environ- mental Management Social clauses A target area Points given Demands : Resources Consumption Impact on Nature Target award criteria becomes a demand

Purchasing Policy The purpose of Kolding Municipality’s purchasing policy is to ensure that all purchasing is undertaken in conformity with the council's expectations. In particular, it is designed to achieve: the right prices environmental friendly purchases quantity discounts reliability of supply simplified settlement procedures and minimal administration limited storage costs avoidance of faulty purchasing trust and strong cooperation between Kolding Municipality and its chosen suppliers.

Purchasing Policy - Environment The policy was confirmed by the Town Council in 1998 The policy calls for an ecological resetting of all purchasing actions Environmental criteria must be assessed on par with other criteria Implementing the green purchasing policy have been done by integrating environmental questionnaires by turn into all calls for tenders Within the year 2005 Kolding have greened approximately 85% of all framework agreements

Purchasing Policy- Social aspects Social aspects must be considered when purchasing services Social aspects must not be used as award criteria The call for tender must request that the supplier is committed to: Employ long term job seekers Set up special positions for people with reduced working ability Set up positions for trainees Ensure equality between men and women Ensure ethnical equality The amount of personnel covered by the social clauses must be defined specific for every call for tender

The process of green purchasing of goods Users draw up demands on: - Functionality - Quality - Delivery Terms Evaluation process: - Users evaluate suppliers on price, functionality, quality, delivery terms etc. - Environmental department evaluate suppliers on environmental performance Evaluation is done by a point score system The supplier with the highest point score is selected Users draw up demands on: - Functionality - Quality - Delivery Terms An environmental questionnaire is designed by the environmental department The suppliers to bid are identified and the call for tender is published An environmental questionnaire is designed by the environmental department The suppliers to bid are identified and the call for tender is published

User Groups defined on the basis of Product groups The Organisation of Green Purchase Purchasing office Development Team User Groups defined on the basis of Product groups 1 2 3 4 5 6 7 8 9 10 11 Purchasing officers Environmental office

The procedure of Green Purchasing Identifying green suppliers: The suppliers must answer an environmental questionnaire The questionnaires contains different kinds of questions regarding impacts from the product regarding impacts from the packaging The questions are formed in a way, that positive answers indicates a positive environmental performance

The procedure of Green Purchasing Identifying green suppliers: For every product group there are minimum requirements, that must be met The questions provide the basis to compare the environmental standards of the offered products Assessment is facilitated by a point score sys-tem In the end environment is assessed on par with price, quality and level of service

The procedure of Green Purchasing Assessing the suppliers environmental performance: The questions in the environmental questionnaire can be answered by yes or no An yes-answer indicates an environmental positive performance The numbers of yes’ is counted and calculated into points If yes to every question the supplier gets maximum point Point are reduced relatively to the numbers of yes’ by using the following function: Point = (number of Yes/number of Questions)*Max points

The procedure of Green Purchasing Experiences: Green purchasing has been implemented without supply of extra economical funds Modifications of the procurement procedures and creation of an easily applicable assessment have helped to avoid an increase in costs Higher prices have only been found in the product group of organic food

The procedure of Green Purchasing Experiences: Kolding has experienced very positive reactions to the environmental questionnaires The suppliers are very open and fulfil the questionnaires with great skill Kolding cannot support the argument, that an insufficient range of green products is available on the market

Example - Environmental and Social consideration: Management of an Residential Home: To ensure that the management is done as sustainable as possible, the call for tender includes: Social clauses Environmental Requests An Environmental Questionnaire Weighting of Criteria: Tender sum 50% Service 25% Organising resources 15% Quality 5% Environment 5%

Evaluation Chart Criteria of allocation Weight Primary criteria Partial criteria Primary Partial weight   Tender sum 1. Basic offer – Module A 50 2. Additional offers 30 a) Module B b) Module C c) Module D d) Module E 3. Activity 10 a) Module F b) Module G1 c) Module G2 d) Module H1 e) Module H2 4. Other offers 5 5. Running the centre

Evaluation Chart Criteria of allocation Weight Primary criteria Partial criteria Primary Partial weight   Tender sum 1. Basic offer – Module A 50 2. Additional offers 30 a) Module B b) Module C c) Module D d) Module E 3. Activity 10 a) Module F b) Module G1 c) Module G2 d) Module H1 e) Module H2 4. Other offers 5 5. Running the centre

Management of an Residential Home Social clauses: At least 5% of those positions necessary for fulfilling this contract must be occupied by employees from distinct groups such as: Long term unemployed People with reduced working ability The supplier must have a written personnel policy for those positions necessary for fulfilling this contract which ensures: Equality Integration Maintaining personnel

Management of an Residential Home Social clauses: At least 5% of those positions necessary for fulfilling this contract must be occupied by employees from distinct groups such as: Long term unemployed People with reduced working ability The supplier must have a written personnel policy for those positions necessary for fulfilling this contract which ensures: Equality Integration Maintaining personnel

Environmental questionnaire -examples Waste management: Are waste sorted in fractions for reuse? Energy and water consumption: Are the consumption monitored on a monthly basis? Are light bulbs energy saving ones? Purchasing Procedures: Do purchases have environmental focus? Office supply: Are the least energy consuming items purchased? Kitchen: Is the management done with focus on energy- and water consumption, and organic food? Cleaning and Laundry: Does the used agents comply to Eco-label criteria?

Point Score - Environment Supplier Sum of Yes Point Score A 17 3,3 B 16 3,1 C 21 4,0 D 20 3,9 Maximum 26 5

Awarding the contract 96,0 Criteria Supplier A Supplier B Supplier C Supplier D Economy (50%) 50 45 47 40 Service (25%) 23 22 25 21 Resources (15%) 12 10 15 14 Quality (5%) 5 4 3 Environment (5%) 3,3 3,1 3,9 Total 93,3 84,1 96,0 81,9