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Navigating the standards

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Benchmarking against the Flexible Framework: Following the principles of sustainable procurement * The 2005 study Green Public Procurement in Europe, undertaken by ... – PowerPoint PPT presentation

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Title: Navigating the standards


1
Benchmarking against the Flexible Framework
Following the principles of sustainable
procurement
2
Todays Agenda
3
Todays Agenda
  • Navigating the Standards An introduction to
    the benchmarking standards out there, including
    The Flexible Framework and the new British
    Standard for sustainable procurement- BS8903.
  • Leaders and Learners   Tell us about the
    sustainable procurement practices that you are
    doing well and those areas that youre struggling
    with.   An opportunity to learn about the
    experiences of other delegates.
  • Beyond Gold The Progress Review tool used to
    benchmark achievements in the Mayor of Londons
    Green Procurement Code, measures performance up
    to level 3 of the Flexible Framework.  Are you
    ready to meet levels 4 and 5?
  • Ask the Expert Delegates will have the
    opportunity to put questions to the Mayor of
    Londons Green Procurement Code team.

4
Sustainable procurement Navigating the
principles and standards
  • Graham Randles
  • Principal Consultant

5
Standards of Best Practice
  • Procuring the Future and National Action Plans
  • The Flexible Framework
  • EU Green Public Procurement (GPP)
  • UK Government Buying Standards
  • BS8903 The new British Standard for Sustainable
    Procurement
  • Marrakesh Task Force

6
Procuring the future
  • UK Governments 2005 Sustainable Development
    Strategy set out the ambitious goal to make the
    UK a leader in the EU in sustainable procurement
    by 2009
  • The strategy suggested the scale of the public
    sector spend on goods, services, works and
    utilities was capable of stimulating the market
    for more sustainable goods and services and that
    government leadership could shift consumption
    patterns of business and consumers
  • A task force was set up, led by Sir Neville Sims
    to devise a National Action Plan to deliver the
    UK objective

7
Sustainable Procurement Task Force 2006
Concluded that for the UK to become a leader in
sustainable procurement an effort was required to
mainstream sustainable procurement
8
UK Public Sector Initiatives
9
The National Action Plan
  • Key recommendations for Government
  • Lead by example
  • Set clear priorities
  • Raise the bar minimum and forward looking
    standards should be developed for priority spend
    areas
  • Build capacity by developing its capabilities
    to deliver sustainable procurement
  • Remove barriers to sustainable procurement (real
    and perceived)
  • Capture opportunities for innovation and social
    benefits

10
The building blocks
  • The Task Force stated that the Action Plan should
    be supported by 3 building blocks
  • The Flexible Framework outlines the actions
    required to make sustainable procurement happen.
    Enables organisations to assess the quality of
    its procurement activity and gives a clear route
    map to better performance.
  • Prioritisation of spend a method developed to
    identify areas of spend to focus attention. 10
    priority areas identified.
  • Toolkits to be produced by a sustainable
    procurement delivery team

11
The Flexible Framework
  • A self assessment mechanism developed by the
    Sustainable Procurement Task Force
  • Defines an overarching approach to help
    organisations understand and take steps to
    improve procurement practice and make sustainable
    procurement happen
  • The tool allows organisations to measure and
    monitor their progress on sustainable procurement
    over time

12
The Flexible Framework
13
Mayor of Londons Green Procurement Code
Progress review part one Management
  • Gold
  • 16 signatories
  • Silver
  • 28 signatories
  • Bronze
  • 24 signatories

Progress review part two Purchases
www.greenprocurementcode.co.uk
14
Green Public Procurement (GPP) View from the EU
  • Commissioner Stavros Dimas
  • 'The Greening of Public Procurement is a major
    challenge for Europe's public administrations,
    but also a major opportunity to boost Europe's
    competitiveness and stimulate the market for
    environmental technologies.'
  • http//ec.europa.eu/environment/gpp

15
European political targets
  • EC proposes that
  • By 2010, 50 of all tendering procedures should
    be green
  • Green means compliant with endorsed common
    core GPP criteria
  • Percentage expressed in both number and value of
    green contracts as compared to the overall number
    and value of contracts in sectors where core
    GPP criteria have been identified

16
Green Public Procurement
  • EU definition
  •  a process whereby public authorities seek to
    procure goods, services and works with a reduced
    environmental impact throughout their life cycle
    when compared to goods, services and works with
    the same primary function that would otherwise be
    procured 
  • Environmental criteria can be included in
  • Technical specifications
  • Selection criteria
  • Award criteria
  • Contract performance clauses

17
GPP Survey EU Green 7
Indicator 1 Green contracts by value
Indicator 2 Number of green contracts
Source Collection of statistical information on
Green Public Procurement in the
EU PricewaterhouseCoopers, Significant and
Ecofys, January 2009
18
EC Priority Sectors
  • Construction
  • 2. Food and catering services
  • 3. Transport and transport services
  • 4. Energy
  • 5. Office machinery and computers
  • 6. Clothing, uniforms and other textiles
  • 7. Paper and printing services
  • 8. Furniture
  • 9. Cleaning products and services
  • 10. Equipment used in the health sector

19
UK Government Buying Standards (GBS)
  • Designed to make it easier for government buyers
    to buy sustainable options. They include
  • Official specifications that all government
    buyers must follow when procuring a range of
    products
  • Information about sustainable procurement and how
    to apply it when buying
  • Direct links to websites with lists of products
    that meet the standards
  • http//sd.defra.gov.uk/advice/public/buying/

20
UK Government Buying Standards (GBS)
  • Government Buying Standards simplify sustainable
    procurement by
  • Provide minimum and best practice standards for
    around 50 different products
  • Straightforward specifications that can be
    inserted directly into tenders
  • Suppliers asked to prove their compliance with
    these standards
  • Enable more suppliers to develop products that
    meet the standards so increasing
    competitiveness
  • http//sd.defra.gov.uk/advice/public/buying/

21
UK Government Buying Standards (GBS)
  • Government Buying Standards have been endorsed by
    the Coalition Government
  • All central government departments and their
    related organisations must ensure that they meet
    these minimum mandatory specifications when
    buying products and services
  • The standards have been developed so that
    products which meet the criteria save more money
    over their whole life than products that do not
  • http//sd.defra.gov.uk/advice/public/buying/

22
Government Buying Standards Statement from Lord
Henley
  • Government Buying Standards have been developed
    in consultation with procurement officials across
    Whitehall as well as industry experts and other
    stakeholders, and rigorously assessed in terms of
    costs and scientific evidence.
  • I believe that buying sustainably is buying well
    and I encourage you all to use these Government
    Buying Standards developed to help you understand
    the life cycle impacts of a wide range of
    products.
  • http//sd.defra.gov.uk/advice/public/buying/

23
BS 8903 2010 Principles and framework for
procuring sustainably. Guide
  • British Standard with recommendations and
    guidance on how to adopt and embed sustainable
    procurement principles and practices across an
    organization and its supply chains.
  • Provides practical information to help
    implementation. It also includes guidance on
    measurement to help organizations assess the
    extent and effectiveness of their sustainable
    procurement activity.

24
Procuring sustainably using BS 8903
  • The principles set out in BS 8903 are applicable
    to both public and private sector organizations.
    However, public sector buyers comply with EU
    Procurement Directives (and the Regulations that
    implement them in the UK).
  • The EU has requirements with regard to public
    procurement and what can be considered throughout
    the qualification, tender and contracting
    process. It is advisable that proper legal advice
    always be sought. This guide provides information
    which is likely to be useful to public
    procurement but it ought to be read in
    conjunction with the latest Directives,
    Regulations and government policy.

25
Procuring sustainably using BS 8903
  • British Standard gives detailed guidance across
    all stages of the procurement process and is
    applicable
  • to individuals and small and large organizations
    responsible for commissioning or procuring any
    form of goods, works or services regardless of
    sector, for own use, resale or to support service
    provision
  • across the public sector, private sector and
    third sector
  • across the whole procurement cycle including
    one-time purchases to ongoing contracts with
    long-term supplier partners
  • to individuals and organizations with sole
    responsibility for their purchasing needs and
    third parties contracted to provide outsourced
    procurement solutions.

26
Procuring sustainably using BS 8903
Ref BS8903 Principles and Framework for
Procuring Sustainably
27
Enablers - risk and opportunity assessment
  • Category level prioritization mapping risk and
    spend

28
Enablers - risk and opportunity assessment
  • Buyer approach mapping risk and scope

29
Enablers - risk and opportunity assessment
  • Market engagement strategy scope and influence

30
Analysis and action planning
  • Develop detailed risk/impact assessment
  • Execute action plans
  • Capture results and share learning

Source BS8903 (2010)
31
Source United Nations, UNEP The Marrakech
Process is a global process to support the
elaboration of a 10-Year Framework of Programmes
(10YFP) on sustainable consumption and
production, as called for by the WSSD
Johannesburg Plan of Action (2002)
Sustainable Public Procurement UNEP Marrakech
Process
Objective To promote and support the
implementation of public procurement programmes
that encourage the uptake of sustainable products
and services
32
Sustainable Public Procurement UNEP Marrakech
Process
  • Key Activities
  • to develop practical guidance and toolkits for
    sustainable public procurement
  • to carry out research and prepare policy papers
    on SPP
  • to facilitate dialogue and work amongst
    stakeholders and countries on SPP
  • to promote SPP through training and assistance
  • http//esa.un.org/marrakechprocess/tfsuspubproc.sh
    tml

33
Leaders and Learners Facilitated workshop
34
Beyond Gold
Graham Randles Principal Consultant
35
The Flexible Framework
36
The Flexible Framework
37
The Flexible Framework
38
The Flexible Framework
39
Life Cycle Costing (LCC) Achieving win-win
outcomes
40
Life Cycle Costing (LCC)
  • What is Life Cycle Costing?
  • Also called Whole Life Costing (WLC)
  • Technique to establish the total cost of
    ownership
  • Structured approach that addresses all the
    elements of cost
  • Can be used to produce a spend profile of the
    product or service over its anticipated life-span
  • Results can be used to assist management in the
    decision-making process where there is a choice
    of options
  • Accuracy of analysis diminishes as it projects
    further into future
  • most valuable when long term assumptions apply
  • to all options and have the same impact

Source OGC http//www.ogc.gov.uk/implementing_pla
ns_introduction_life_cycle_costing_.asp
41
Principles of Life Cycle Costing
42
Principles of Life Cycle Costing
  • Acquisition costs - incurred between the decision
    to proceed with the procurement and the entry of
    the goods or services to operational use
  • Operational costs - incurred during the
    operational life of the asset or service
  • End of life costs - associated with the disposal,
    termination or replacement of the asset or
    service. In the case of assets, disposal cost can
    be negative because the asset has a resale value.
  • A purchasing decision normally commits the user
    to over 95 per cent of the through-life costs.
    There is very little scope to change the cost of
    ownership after the item has been delivered.

Source OGC http//www.ogc.gov.uk/implementing_pla
ns_introduction_life_cycle_costing_.asp
43
Benefits of LCC analysis
  • Evaluation of competing options in purchasing
  • Improved awareness of total costs - visible costs
    of any purchase represent only a small proportion
    of the total cost of ownership
  • More accurate forecasting of cost profiles
  • Performance trade-off against cost
  • Sustainability benefits reduced waste and CO2
    emissions

Source OGC http//www.ogc.gov.uk/implementing_pla
ns_introduction_life_cycle_costing_.asp
44
Engaging Suppliers Private sector supply chain
initiatives
Wal-Mart Will Make Suppliers Say How Much They
Pollute Business Insider, 15 July 2009
45
Sustainability Product Index
  • 15 Questions for Suppliers
  • Energy and Climate Reducing Energy Costs and
    Greenhouse Gas Emissions
  • Material Efficiency Reducing Waste and Enhancing
    Quality
  • Natural Resources Producing High Quality,
    Responsibly Sourced Raw Materials
  • People and Community
  • Ensuring Responsible and Ethical Production

46
The Flexible Framework Measurement Results
Level 4 Balanced Scorecard approach reflecting
input and output Comparison with peer
organisations Eg. Green Procurement Code Level
5 Measures used to drive organisational
sustainable development strategy Independent
audit reports in the public domain Eg. Green
Procurement Code
47
GLA Group Responsible Procurement Benchmarking
Project June 2010
  • Research conducted by
  • Barbara Morton, Sustainable Procurement Ltd
  • Graham Randles, LRS Consultancy Ltd

48
Project objectives
  • Understand how leading organisations approach
    responsible / sustainable procurement
  • Understand how they measure report progress
  • Determine what lies beyond Level 5 of Flexible
    Framework
  • Establish an RP benchmarking network / community
    of practice

49
Organisations interviewed
  • GLA Group
  • LDA
  • London Fire Brigade
  • Metropolitan Police
  • TfL
  • Central Government
  • Dept for Transport
  • Dept of Health
  • DWP
  • Arup
  • City of Wakefield MDC
  • Durham County Council
  • IBM
  • Leeds City Council
  • London Borough of Greenwich
  • Skanska
  • Value Wales

50
Risk management - Good practice
  • GLA Group focus on Mayoral priorities results in
    strong performance on eg. equality and diversity
  • Robust risk-based methodologies used by leading
    organisations. eg. DWP focus on high risk
    contracts
  • DfT prioritisation of categories led to strategy,
    guidance notes, training in those categories
    first
  • Wide range of environmental and socio-economic
    issues considered and tools developed
  • eg. Leeds toolkit, Skanskas balanced scorecard,
  • MoD scenario planning for future materials
    scarcity

51
Capability-building measuring outcomes Good
practice
  • GLA Group is generally strong on
    capability-building but, like other
    organisations, finds it hard to measure impact
    on the ground of capability-building actions
  • Developing consistent metrics across a diverse
    organisation is a challenge for many interviewed.
    eg. Skanska, Arup, MoD
  • DfT annual external health check of FFW
    progress
  • Skanska focus on Key Performance Indicators
  • Were a business of KPIs

52
Life cycle costing Good practice
  • Most organisations interviewed do some LCC
  • Most commonly used for fleet eg. LFB and
    buildings eg. Skanska sometimes IT
  • Clean Vehicles Directive public sector must
    monetise incorporate costs of emissions in
    purchase decisions
  • Skanskas light-bulb moment - realising we
    would never dare go to the industry and say you
    can have a safe project but it will cost you
    more
  • GLA has started to investigate existing tools and
    tools
  • in development. eg. ICLEI LCC tool

53
Engaging suppliers and procuring innovation
Good practice
  • Proactive approach to identifying requirements as
    sustainable / responsible in the contract title.
    eg. Ultra-efficient rather than sustainable
  • Forward Commitment Procurement. eg. Wakefields 3
    FCP procurements current or in the pipeline
    (ultra-efficient heating and lighting systems
    for swimming pools, street lighting and playing
    pitches)
  • Incorporating sustainability at the design stage
  • eg. Skanska (buildings), MoD (ships)

54
Internal communications and leadership /
accountability Good practice
  • GLA Group senior management commitment is
    generally very strong
  • Leading organisations ensure leadership is
    embedded at all levels and responsibilities are
    well understood. eg. Skanskas deep ecological
    building strategy
  • Clear guidance and accountability. eg. Skanskas
    5 zeros, Leeds 5 freedoms
  • Some organisations, including Metropolitan Police
    and
  • LFB are providing sector level leadership

55
Recommendations Innovation
  • Investigate, potentially through market survey or
    dialogue
  • Opportunities to convey the responsible
    procurement requirements through the title /
    subject matter of the contract
  • Opportunities for Forward Commitment Procurement
  • Earliest possible engagement in the procurement
    process eg. Design stage

56
Recommendations Risk management
  • Tactical
  • Can learn from others and make rapid progress.
  • eg. carbon footprint of NHS in England
  • Strategic
  • Review environmental and socio-economic criteria
    used in risk assessment to focus resources on
    areas of maximum risk
  • Apply across all procurement spend, category and
    sub-category levels

57
Recommendations Capacity building and
measurement
  • Give attention to capability-building at senior
    management level so that everyone fully
    understands their roles and responsibilities
  • Work to associate capability building to
    individual procurement actions and then to
    responsible outcomes. eg. Progress against carbon
    target
  • Expand on the work done through MGPC to measure
    outcomes
  • Work with Defra, WRAP and others to test new
    methodologies (developing leading practice)

58
Recommendations Life cycle costing
  • Further develop LCC approaches and toolkits
  • Identify where LCC approaches are best applied
  • Bid evaluation options appraisal business case
  • Work to investigate which categories of spend
    might lend themselves to quantification and
    monetisation of emissions
  • Data could be used to inform resource allocation
    (budgeting) and procurement decisions (ie.
    choosing between competing product/service
    options)

59
Thank you!
Graham Randles LRS Consultancy graham.randles_at_lr
sconsultancy.com tel 020 7061 6388 Mayor of
Londons Green Procurement Code www.greenprocureme
ntcode.co.uk
60
Ask the Expert Q A
Graham Randles Sarah Griffiths LRS Consultancy
61
Government Buying Standards Statement from Lord
Henley
  • We are facing tough times in the UK as we define
    and follow the path to recovery. And now more
    than ever we need to be thinking about balancing
    environmental, social and economic needs.
  • What we buy in the public sector is absolutely
    vital as it affects product markets as well as
    local economies. Whilst finding cash savings is
    important in the short term, it also is
    imperative that what we buy now is cost effective
    during its lifetime. There is no point buying the
    cheapest computer on the market if it is not
    energy efficient. Todays savings must not be
    tomorrows costs.
  • http//sd.defra.gov.uk/advice/public/buying/

62
The business case for sustainability
  • Prepare for the long game - All the things you
    currently rely on energy, supply chain,
    consumers, investors, regulation are going to
    change as a result of increased sustainability
    risks and concerns
  • Plan to explore how to make sustainability
    commercially beneficial for your business -
    innovation
  • KPMG International survey of 378 large and
    medium-sized companies spread across 61 countries
    show that 62 percent already have an active
    sustainability program in place, and 11 percent
    are currently developing one (Dec 2010)
  • 72 of those with sustainability programs found
    that,
  • despite some increase in investment, the
    benefits
  • clearly outweighed the drawbacks

63
The Green Procurement Code the future
  • Proposed elements of the new service for large
    business members
  • Benchmarking using Part 1 of the existing
    Progress Review (up to level 3 of the flexible
    framework)
  • Bespoke action plan detailing how you can improve
    your performance
  • Consultancy support time (1 day) to assist with
    implementing your action plan
  • Networking and Events (3 to 4 per year)
  • Indicative cost - 1,775 (exc VAT)
  • New certification system (soon to be announced!)
  • What do you think?

64
The Green Procurement Code the future
  • Proposed elements of the new service for SME
    members
  • Benchmarking using the existing Progress Review
    (up to level 3 of the flexible framework)
  • Bespoke action plan detailing how you can improve
    your performance
  • Evidence based audit and certification to Bronze,
    Silver Gold level
  • Workshops (3 to 4 per year)
  • Indicative cost - 370 (exc VAT)
  • What do you think?
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