A.
POLICY
Contents
General Public Procurement Principles
Dti Procurement Principles
Competition
Public Sector Efficiency And The Use Of Public-Private Partnership
Partnering
Electronic Commerce
International Obligations
Small And Medium Enterprises
Supported Employment (Special Contracts Arrangement - Sca)
Environmental Issues In Purchasing
A.1
GENERAL PUBLIC PROCUREMENT PRINCIPLES
A.1.1
Contents
Current public
procurement policy is based largely on the White Paper "Setting New
Standards: A Strategy for Government Procurement" Cm 2840, HMSO, 1995.
The effects of this
policy were examined in the “Comprehensive Spending Review on Efficiency in
Civil Government Expenditure” published jointly by HM Treasury and the Cabinet
Office in April 1998. This review
re-affirmed that the role of government procurement is to make tax payers’
money go further, in meeting users’ requirements, and that this is best
achieved through the professional identification of requirements and the
selection and subsequent management of the best supply strategies to meet them.
The Government’s
White Paper “Modernising Government” - Cm 4310, March 1999, contains a
commitment to procurement based on competition to secure best whole-life value,
the use of partnering to encourage innovation and continuous improvement and to
PFI for capital projects.
Two further reviews
have been published:
a
“Review of Civil
Procurement in Central Government” by Mr Peter Gershon, April 1999, which pointed the way
to a strengthening of the government’s strategic procurement capacity through
the establishment of a new Office of Government Commerce.
b
“Second
Review of the Private Finance Initiative” by Sir Malcolm Bates, April 1999
which confirms the use of private finance as a mainstream procurement tool, used
as one of a range of public-private partnership models; and
A.1.2
Definition of Procurement
Procurement, in the
sense in which it is applied in this Manual, covers the process of acquisition
of goods, services and works projects from third parties (including logistical
aspects), from initial concept and definition of business needs through to the
end of the useful life of a procured asset or services contract.
A.1.3
Value for Money
Government policy is
that all procurement should be based on best value for money and that
departments should seek to secure continuous improvements in value for money.
Best
value for money means taking into account “the optimum combination of whole
life cost and quality necessary to meet the customer's requirement”.
All procurement decisions must be based on robust assessments of all the
options in each set of circumstances, making full use wherever appropriate of
Public Private Partnerships. Continuous
improvements in value for money should be sought throughout the life of a
contract through effective contract monitoring and control.
A.1.4
Commitment to Competition
It is also government
policy to ensure that procurement strategies and practice should be used so as
to enhance the competitiveness of UK and EU companies and strengthen supplier
markets through the development of
world-class professional procurement systems and practices.
The Government’s
White Paper “Our Competitive Future: Building the Knowledge Driven Economy” December
1998 Cm 4176, re-affirms the
commitment to open, competitive markets. It also commits the Government to
supporting more effective collaboration between businesses and with business in
order, among other things, to drive quality through the supply chain.
A.1.5
Commitment to Best Practice and Innovative Procurement Processes
The Comprehensive
Spending Review referred to above, in addition to re-affirming that best value
for money is the guiding principle for public procurement also acknowledged the
need for continuous improvement in public sector procurement processes. Public
procurement needs to be benchmarked against the best in class in order to play a
constructive part in that process.
Departments are
committed to increasing the use of electronic commerce for low-value
procurements, increasing the use of collaborative procurement, improving
procurement performance measurement and increasing professionalism among
procurement staff.
A.1.6
Sources of Additional Information
Further information
appears elsewhere in this Manual on;
·
DTI Procurement Principles (Chapter A2)
·
Competition (Chapter A3),
·
public-private partnership (Chapter A4)
·
partnering (Chapter A5)
·
electronic commerce (Chapter A6)
·
international obligations (Chapter A7)
·
small and medium sized enterprises (Chapter A8)
·
supported employment
(special contracts arrangement) (Chapter A9)
·
environmental issues in
purchasing (Chapter A10)
·
Office of Government Commerce (Chapter C2)
·
increasing professionalism in public
procurement (Section C –
Government Procurement Service)
A.2
DTI PROCUREMENT PRINCIPLES
A.2.1
Contents
A.2.2
Best Practice
Best practice
procurement must be a central element in the Department's business at all
management levels. This means:
a
seeking to match the cost
savings achieved by best practice private and public sector organisations and
collaborating with other departments to achieve best value for money;
b
using a range of procurement
techniques, including public private partnership approaches, such as private
finance, market testing and contracting out, selecting the most appropriate in
each case;
c
being an intelligent
customer (knowledgeable about the products or services and markets) with well
defined objectives and requirements;
d
adopting integrated
procurement processes, covering the whole cycle of acquisition and use from
start to finish, to ensure quality and economy over time, not short-term lowest
price – i.e. adopting whole life cost principles;
e
taking great care in drawing
up business cases, and in assessing and managing risks; and
f
carefully managing all
contracts.
In addition,
purchasers must adhere to:
g
Departmental policies which
impact upon procurement, such as
·
competitiveness (Chapter A3)
·
private finance (Section A4)
·
partnering (Chapter A5)
·
small firms (Chapter A8)
·
supported employment (Chapter A9)
·
the environment (Chapter A10)
·
open government (Chapter B7)
·
equal
opportunities
h
Public procurement ethics (see Chapter B6)
to avoid accusations of impropriety
and to ensure that an adequate audit trail is always maintained.
i
Best financial management practice (see
Chapters B2 and B3),
the separation of responsibility
for committing expenditure, ordering goods and services, certifying performance
against invoices and authorising payment.
A.2.3
General DTI Procurement Strategy
The Department's
overall strategy is for procurement to be carried out by the Management Unit
best placed to act as the procurement specialist. In core DTI this results in three procurement routes:
a
common
specialist requirements are
purchased centrally through centres of expertise;
b
other
general items where there is
less need for close control, are purchased by end users through framework
arrangements set up by the Management Unit with Departmental policy
responsibility for the procurement;
c
policy-specific
goods or services (such as
R&D) are procured by the Management Unit with policy responsibility.
These arrangements
are covered in more detail in Chapter C2.
Executive Agencies
are responsible for their own strategies. However,
they are free to participate in central framework arrangements.
This mixture of
centralised and decentralised procurement enables the Department to take
advantage of economies of scale without a central procurement bureaucracy.
A.2.4
Sources of Additional
Information
A fuller description
of the arrangements outlined above can be found in Part
C.
A.3
COMPETITION
A.3.1
Contents
A.3.2
Supplier Competitiveness
The public sector
exerts considerable influence on the competitiveness of suppliers.
Many sectors of British industry (such as defence equipment and the
construction industry) are heavily dependent on public purchasing decisions.
Good purchasing by the public sector can therefore have a profound effect
on the competitiveness of firms. It
can improve quality, assist innovation, reduce costs, set standards, and provide
a shop window for world sales.
Competition remains
the cornerstone of Government procurement policy in pursuit of value for money.
Public contracts awarded in competition to suppliers producing high
quality keenly priced goods and services offer mutual benefit to public sector
customers, and the tax payer, and to suppliers themselves who will be in a
better position to win business internationally.
Seeking value for
money through competition therefore contributes to the creation and retention of
a sound industrial and commercial base .
As well as aiding the
achievement of value for money, competition provides fair access to work paid
for by the taxpayer. Fairness and
even-handedness in dealing with suppliers and avoiding conflicts of interest are
also therefore of considerable importance.
A.3.3
Working with Suppliers
You should, as a
matter of enlightened self-interest, use the Department’s buying power to help
improve the competitiveness of suppliers, so obtaining better value for money
and strengthening the industrial and commercial base. The products and services that the Department buys should as
far as possible reflect the requirements (in terms of quality and price) of
world markets.
You are also expected
to work with suppliers to secure improvements in your performance as well as
theirs. Although suppliers should be pressed to reduce costs and improve
quality, it is important to recognise that mutually satisfactory relationships
are in the interests of both sides and to avoid an unnecessarily adversarial
approach.
Helping suppliers
through a constructive partnership built on competition, rather than a
short-term arm's length adversarial relationship, will lead to cost savings as
well as improving quality and service delivery to the mutual benefit of both
customer and supplier.
Where the Department
has longer-term contracts with suppliers, contracts should incorporate
incentives for the continuous improvement of performance.
Contracts for services are particularly suitable for such treatment.
One way of encouraging improvement is through pricing arrangements.
The development of
suppliers is critical to increasing their efficiency and competitiveness and
hence to enabling Departments to improve value for money.
Ways in which supplier development can be encouraged are covered in Section
E6.18.
A.3.4
Sources of Additional Information
There is information
elsewhere in this Manual on
·
public-private partnerships (Chapter A4)
·
partnering (general) (Chapter A5)
A.4
PUBLIC SECTOR EFFICIENCY AND THE USE OF PUBLIC-PRIVATE PARTNERSHIP
A.4.1
Contents
A.4.2
Introduction
The Government’s
White Paper “Modernising Government” - Cm 4310, March 1999, re-iterated the
commitment to achieving continuous improvement in central government policy
making and service delivery. Public
Private Partnerships (PPP) are seen as a means of helping to meet that
commitment. Partnering should be
used to encourage innovation and continuous improvement, and the Private Finance
Initiative (PFI) should be considered for capital projects.
A.4.3
Partnering
Partnering covers any
long-term arrangement in which the parties work together for mutual benefit.
This is dealt with in more detail in Chapter
A5.
A.4.4
Private Finance Initiative (PFI)
The use of private
capital and expertise in the provision of public infrastructure and services has
a long history, particularly in the fields of housing, economic regeneration,
transport and municipal enterprise. The Private Finance Initiative (PFI) is one of the main
mechanisms though which the public sector can secure improved value for money in
partnership with the private sector.
PFI projects can take
a number of forms. The most common
models currently in use are: -
·
for services sold to the
public sector, where the private sector provides the capital assets and the
public purchaser pays only on delivery of the specified services
·
financially free-standing
projects, where the private sector designs, builds, finances and operates an
asset, recovering the costs through direct charges on the private users of the
asset
·
joint ventures, where the
costs of a project are not met entirely by the charges on end users but are
subsidised from public funds.
A.4.5
Contracting-out
Following the
publication of the Government’s White Paper “Modernising Government” - Cm
4310, March 1999, Departments have to review all services and activities to
identify the best supplier in each case. These
reviews could lead to the identification of further Departmental activities that
could more efficiently be carried out by or in partnership with the private
sector and for which a procurement exercise would then need to be undertaken.
Such reviews must be
accompanied by robust assessments of all the options, following the criteria set
out in the handbook on creating public/private partnerships through market
testing and contracting out, “Better Quality Services” published by the
Stationery Office (1998 - ISBN 0-11-630964-4).
The identification
and selection of appropriate private sector providers or partners as part of or
following such reviews must be fully in accordance with the principles of best
value for money in this Manual.
A.4.6
Sources of Additional Information
FRM2’s PFI adviser
should be consulted whenever a project appears suitable for private financing or
where market testing may be involved.
There is an
introductory guide to the Private Finance Initiative (“Partnerships for
Prosperity – The Private Finance Initiative” HM Treasury).
There is an official
Handbook on creating public-private partnerships through market testing and
contracting out (“Better Quality Services” The Stationery Office, ISBN
0-11-630964).
A.5
PARTNERING
A.5.1
Contents
A.5.2
Introduction
Partnering in the
public sector is any long term contractual relationship during which the public
sector purchaser and the private sector supplier seek, by maintaining an open
and collaborative relationship, to reduce cost, improve quality and service
delivery and to seek innovation, for mutual benefit. Ideally, specific measurable targets would be set for at
least one of these characteristics.
Partnering is not a
‘one-off’ solution but a culture, which is applied continuously.
It is not one specific method of procurement: there are a number of
models. Nor is it the sole answer to successful procurement, but it can play a
vital role.
Partnering requires
considerable work, expertise, commitment and patience from both parties.
For this reason the building of full partnerships is normally used only
for procurements of strategic importance, although a number of the elements of
partnership have wider application.
Remember
that partnerships need to be established by competitive tender and re-opened
periodically to competition and that all contracts for priority services which
exceed the relevant EU procurement threshold (see Section E9.3) must be advertised and let by competition.
A.5.3
Objectives
The key objectives
are:
·
to minimise total costs;
·
to maximise product and
service development; and
·
to obtain value for money.
In day to day
operation, partnering occurs wherever the customer and supplier develop such a
close and long-term relationship that the two work together as partners with the
aim of securing the best possible commercial advantage for both parties.
The principle is that teamwork is better than combat.
In a typical
partnership relationship, purchasers and suppliers maintain a continuing
dialogue on the ways in which the costs both of the product or service and of
the acquisition process can be reduced, with the benefits being shared by both
parties. It can also involve
keeping an established supplier in touch with your strategic thinking where this
might affect your requirements. Both
parties have an interest in each other's success.
A.5.4
Benefits
The benefits should
be:
·
achieving high level quality
standards;
·
cutting lead times and
increasing flexibility in response to fluctuating requirements;
·
reducing stock (where
appropriate) and administration costs;
·
innovation through better
information from customers and suppliers being shared and access to the
technical resources of both.
In the public sector
the benefits of partnering can best be achieved through:
·
the effective management of
contractual relationships
·
competition suited to the
nature of the procurement; and,
·
appropriate provisions for
subsequent competition.
This will only be
achieved if the partnering relationship:
·
has been tested
competitively;
·
has been established on the
basis of clearly defined needs and objectives over a specified period of time -
normally not more than 3 to 5 years; and if
·
appropriate safeguards have
been built to ensure genuine competition in the future.
A.5.5
Sources of Additional Information
Central guidance on
public private partnerships is issued by HM Treasury. A useful general guide is the Treasury Private Finance Task
Force’s publication “Partnership for Prosperity - the Private Finance
Initiative”, available on the Treasury website – www.hm-treasury.gov.uk.
Within DTI advice on
public private partnership issues should always be sought from the PFI adviser
in FRM2.
There are also three
booklets covering partnering more generally available from Partnership Sourcing
Limited of Centre Point, 103 New Oxford Street, London, WC1A 1DU (a company
limited by guarantee established in association with the CBI and DTI).
These booklets are titled, Partnership Sourcing, Making Partnership
Sourcing Happen and Partnership Sourcing Creating Service Partnerships.
A.6
ELECTRONIC COMMERCE
A.6.1
Contents
A.6.2
General
The use of
information and communication technologies is central to what is described as
the knowledge driven economy. These new technologies can be used as tools to
support the procurement strategies and develop
procurement processes to attain and maintain best in class status. DTI
has a lead role within Government to promote e-commerce throughout industry;
therefore DTI’s procurement practices should be keeping pace with the
opportunities afforded by new technology and should incorporate those changes
likely to offer the Department the best benefits.
A.6.3
Targets and Progress
The Government’s
White Paper “Modernising Government” - Cm 4310, March 1999 committed
government to acting as a champion of electronic commerce and set an overall
target that all Government Services and transactions be capable of being
conducted by electronic means by 2005. This target has been supplemented by
specific targets for the conduct of Low Value Purchases and E-Tendering which
are currently under review.
The Department has also introduced the
Government Procurement Card for small value purchases, which it sees as an
introduction to electronic commerce. For
more detailed information on the Government Procurement Card see
the MANDRIN Guidance materials “Government Procurement Card” and “Government
Procurement Card User Guide”.
See also Section E16.3.
Approximately, 70% of the core Department’s Low Value purchase are now
conducted by electronic means (i.e. by Government Procurement Card), leading the
way in Central Government (where an average of 50% is achieved).
In 2001, DTI commissioned a study which
recommended that the Department examine further the options for implementing
e-Procurement solutions.
In the meantime, the Department has been
a participant in OGC Sponsored pilot projects which have developed the
Department’s awareness of the potential benefits and implications of
installing such solutions. Following these exercises the Department is now
considering various options for implementing e-Procurement.
A.6.4
E-Procurement Strategy
The Department’s strategy and vision
for E-procurement is to develop a system which is easy to use and will enable
the efficient and effective sourcing, purchasing and payment of goods and
services.
It is intended that the centrally
delivered solutions will become the standard method of sourcing suppliers and
placing orders for all goods or services. Accordingly, it is strongly
recommended that no e-procurement initiatives should be entered into without
prior agreement from the Procurement Policy Unit in FRM.
A.6.5
Sources of Additional Information
The plans for
implementing this strategy are still being developed and will be under regular
review. To obtain the latest information you should consult the Procurement
Policy Unit in FRM.
A.7
INTERNATIONAL OBLIGATIONS
A.7.1
Contents
A.7.2
General
All procurement must be fully consistent with the
Government's international obligations under relevant EU Directives and the
World Trade Organisation (WTO), formerly General Agreement on Tariffs and Trade
(GATT) Government Procurement Agreement.
International
obligations governing public sector procurement exist to ensure the development
of effective competition in the field of public procurement, and ensure the
removal of obstacles to the free movement of goods and services and to the
freedom of establishment in respect of works.
They are embodied in UK Regulations and must be followed otherwise UK Law
will be broken, procedures may be suspended, decisions set aside or corrections
made. In extreme cases of breach of
obligations the Secretary of State may be taken to court.
A.7.3
Sources of Additional Information
For
detailed information on the provisions of the EU Procurement Directives and on
the WTO (GATT) Government Procurement Agreement see
Chapter E9.
A.8
SMALL AND MEDIUM ENTERPRISES
A.8.1
Contents
A.8.2
General Policy Objectives
There is a good case
on value for money grounds for taking steps to remove barriers to participation
by small and medium enterprises (SMEs) in public procurement
It is also a DTI objective to foster the creation and development of
small and medium sized enterprises. (For
procurement purposes, a small company is defined as one employing 50 people or
less; a SME is one employing 250 staff or less.)
Insofar as it is consistent with obtaining value for money, they should
be included on appropriate lists of companies invited to quote or tender.
A.8.3
Encouraging SME Participation
SMEs can be
encouraged to participate in public sector contracts in many ways which do not
discriminate against larger firms and which help to improve value for money by
increasing competition. Particular
steps that can be taken are:
a
by improving access to
procurement information - the publications listed in
Section A8.5
provide a useful starting point and
should be drawn to the attention of small firms.
b
by sub-dividing large
contracts in appropriate circumstances so that small and medium companies can
bid (care needed when splitting contracts - watch for impact on EU procurement
thresholds – see Section E.9.4).
c
by taking a flexible
approach when seeking quality assurance - BS EN ISO 9000 (BS5750) is not a
mandatory requirement for Government contracts and certification may be
inappropriate for a number of small firms, so you should consider the
alternatives.
d
by paying special attention
to the prompt payment of invoices and by being helpful particularly in
redirecting enquiries.
When dealing with
small firms, you should adhere to the following checklist of best procurement
practice:
·
know where suitable small
firms are;
·
explore local suppliers;
·
include a new firm on every
bid list;
·
have a quality approach;
·
keep documentation simple;
·
specify by function and
standard;
·
consider using part orders;
·
be realistic about timing;
·
use post-tender negotiation
fairly;
·
avoid making changes after
the order is placed;
·
give feedback to
unsuccessful bidders;
·
pay bills on time;
·
check what all
suppliers think of you.
Most of the topics
raised in the checklist above are in any event part of general best practice and
are covered in more detail as they arise elsewhere in this Manual.
A.8.4
Statistics
In order to permit
the evaluation of small firms' success in winning government contracts, you
should ensure that the "Statement on Size of Organisation" is
completed on the Invitation to Tender/Quotation Request form (PF30).
A.8.5
Sources of Additional Information
The following
publications provide procurement information for potential suppliers:
a
“Guide
for Suppliers” - available on the DTI website – www2.dti.gov.uk.
b
"Tendering for
Government Contracts" is a joint OGC/Small Business Service (SBS)
publication available to help companies, including SMEs, bid for contracts.
A copy can be found on the OGC website at http://www.ogc.gov.uk/index.asp?docid=393.
It gives information on procurement in Government Departments. The DTI entry
lists the main centres of procurement (IMPE for IT goods and services; EFM for
building services; and Communications Directorate for publicity), as well as the
procurement contacts in Radiocommunications Agency, the Insolvency Service,
Companies House and the Patent Office available
on the DTI website – http://www.dti.gov.uk/
.
c
Another OGC/SBS booklet is
“Smaller supplier….better value” which can be found, also on the OGC
website, at http://www.ogc.gov.uk/embedded_object.asp?docid=2077.
d
"Government
Opportunities" gives details of tendering opportunities for suppliers
wishing to bid for government work (publication available from Business
Information Publications Ltd. – http://www.bipcontracts.com/index.html .
e
The DTI "Guide to
Business" helps potential bidders in identifying appropriate contacts
within the Department - available on the DTI website – http://www.dti.gov.uk/
.
A.9
SUPPORTED EMPLOYMENT (SPECIAL CONTRACTS ARRANGEMENT - SCA)
A.9.1
Contents
A.9.2
Introduction
The Special Contracts
Arrangement (SCA) was introduced in November 1994 to replace the Priority
Suppliers Scheme (PSS). The SCA was developed to assist eligible employers of
severely disabled people within the European Union and the European Economic
Area to compete for business with UK Government Departments and their Agencies,
whilst taking account of the principle of accepting the bid that offers best
value for money.
Enterprises that
satisfy the eligibility criteria may register at any time with the Employment
Service, which is an Agency of the Department for Education and Employment.
An invitation to register is published annually in the EU Official
Journal. This does not apply to prison workshops.
SEPACS (Supported
Employment Procurement and Consultancy Services), part of the Employment
Service, are responsible for monitoring supported employment contracts.
They seek to promote the potential of the supported employment
enterprises registered under the SCA.
A list of registered
enterprises is available from the Employment Service Disability Services
Division. For further information
see the contact details listed at the end of this Section.
The SCA applies only
to those contracts that are below the relevant threshold of the
EU/WTO(GATT) rules see
Section E9.4
and
contracts to which those rules do not apply.
A.9.3
Action for Procurement Staff
You should endeavour
to increase business with enterprises registered under the SCA, while continuing
to ensure fairness to other suppliers. Provide registered
enterprises with every opportunity to supply the widest range of commodities by
including them in suitable tender lists and using the "offer
back" facility described in the next
paragraph where appropriate, whilst still taking account of the principle of
obtaining best value for money.
When awarding a
contract covered by the SCA, you should:
a
award the contract to the
supplier whose bid offers best value for money;
b
award the contract to a
registered enterprise if its bid offers the same value for money as the most
competitive bid from a non-registered firm;
c
give a registered enterprise
the opportunity to submit a revised offer ("offer back") for all or
part of the contract if that enterprise's bid is unacceptable on price alone
(that is, quality, volume and delivery are acceptable);
d
accept the registered
enterprise's revised bid if, on offer back, it matches the best offer;
e
maintain records on the use
and outcome of offer back.
Do not use offer back
as a means of subsequent negotiation with non-registered firms in order to
reduce bid prices further.
You are not required:
f
to transfer existing
contracts from satisfactory non-registered firms where the maintenance of
suitable commercial manufacturing capacity is necessary for strategic reasons,
even if a registered enterprise is able to match a non-registered firm's bid;
g
to split contracts where to
do so would result in an increase in the overall cost of meeting your
requirement.
Supported employment
enterprises should be given a reason for their failure to obtain any business.
SEPACS should be
consulted if the intention is to split orders between supported employment
enterprises or if any difficulties arise.
A.9.4
Sources of Additional Information
For additional
information contact the Employment Service, Disability Services Division DS4,
Level 3, Rockingham House, 12 West Street, Sheffield, S1 4ER – Telephone 0114
259 5338.
A.10
ENVIRONMENTAL ISSUES IN PURCHASING
A.10.1
Contents
A.10.2
Introduction
Procurement presents
opportunities to apply the Department's commitment to adopting good
environmental practice. Our
purchasing decisions, which collectively are significant in terms of expenditure
and scale, and the message that we convey to industry through our references to
environmental considerations, play a significant role in meeting the
Government's green policy objectives, and also stimulate UK business to seize
environmental market opportunities. Thus
wherever possible, procurement specifications should include requirements to
safeguard the environment.
A.10.3
Action for Procurement Staff
As Departmental
purchasers you are asked to consider the costs and benefits associated with
green procurement by taking note of the following:
a
Determine if precedents have
been established, by reference to any existing sources within DTI, OGDs or in
industry, when considering whether or not to specify environmentally friendly
goods or services. If not, consider whether there is sufficient information to
include environmental costs in the procurement life cycle cost analysis.
b
Always ensure that
environmentally friendly products are fit for the purpose for which they are
intended.
c
Carry out regular reviews of
the costs and benefits where green procurement involves paying a
"premium”.
d
Where applicable, ensure
specifications, as a minimum, reflect the local green housekeeping strategy.
e
Make environmental
considerations plain and unambiguous where they are included within
specifications. As a simple
example, if ordering say furniture one might include within the specification
that if woods are utilised they should be from sustainable sources.
f
Procure goods and services
whose specifications include environmental criteria in the normal manner, using
competition and seeking best value for money.
g
Observe EU Directives and UK
Regulations by not excluding tenderers from bidding on non-economic grounds.
Bidders can only be excluded if they fail to meet specific green
procurement requirements, not because of general environmental considerations.
h
Consider the costs and
benefits in relation to any environmental advantages in use and disposal during
the evaluation of bids.
i
Give preference to products
with Eco-Labels or suppliers with BS7750 or equivalent (including EMA registered
sites) where environmentally friendly products or services have been specified
and the decision between competing bidders is extremely close.
j
seek environmentally
friendly products from amongst those who offer value for money where no
environmental requirements are specified, and all other things are equal,
including quality.
This policy applies
to the whole of the DTI. Responsibility
for implementation of the Department’s procurement policy relating to
environmental issues rests with management with the authority to commit or incur
expenditure and individual purchasers.
In addition, DTI is
accredited to the environmental management standard ISO 14001, in relation to
management of the headquarters estate. Advice
on the procurement implications is available from EFM.
A.10.4
General Points
When implementing
DTI's green procurement policy do not lose sight of the fundamental value for
money and UK supplier competitiveness objectives of Government procurement.
Green procurement
should be viewed as a market opening measure for industry as well as a
contribution to sustaining natural resources and the prevention of pollution.
Both Europe and the USA have well-developed environmental markets and you
can increase business opportunities by encouraging UK suppliers to think green
when bidding for Government contracts. However,
before specifying green products or services ensure that suppliers are prepared
or able to meet your requirements and that UK suppliers in particular are not
disadvantaged.
In order to
successfully pursue DTI's procurement policy you need to be an intelligent
customer who is familiar with the products that you are seeking to purchase,
have a good knowledge of the market you are operating in and maintain a dialogue
with your potential suppliers. This
is particularly relevant for environmental issues in purchasing so that you can
keep track of developments. If you
do not have this basic knowledge you should seek expert advice from a
procurement professional in your purchasing field.
General life cycle
costing is covered in CUP Guidance No 35, but this does not take into account
environmental issues. Environmental
life cycle costing is a relatively new area.
Information is often patchy and unreliable and it should not be attempted
by the inexperienced. As a general
rule you should aim to use existing information whenever possible.
ENV are
able to provide advice in some instances where sufficient information exists.
Financial savings,
increased efficiency and a better environment can also be obtained by
considering more environmentally friendly alternatives such as:
·
the re-use or reallocation
of assets in preference to buying new;
·
minimisation of waste;
·
revising procedures to
minimise their environmental impact; and,
·
recycling goods and waste.
If the purchase cost
for the Department includes a saving that is due to the recycling of assets,
which are returned to suppliers, the saving should be separately identified and
may need to be treated as an "appropriation in aid".
Guidance in this Manual on the
disposal of goods (Chapter E19)
should be consulted where they are sent for recycling.
Any receipts should be handled in accordance with the Accounting
Memoranda.
When evaluating bids,
give appropriate weight to the environmental considerations in the light of your
priorities. Do not accept
unsubstantiated claims by suppliers and unrecognised environmental labels on
products. Environmental
considerations must be based on available scientific evidence and not simply on
good intentions.
Remember that
environmental criteria should always be included in the specification part of a
contract rather than in a contract's general terms and conditions.
A.10.5
Sources of Additional Information
ENV should be
consulted about products with Eco-Labels (products which meet certain
environmental performance criteria). The
Department of the Environment, Transport and the Regions (DETR) has information
on registered Eco-Management and Audit sites (which provides an ISO 9000 type
certification for environmental management systems).
Other sources of
information include:
a
"Green Guide for
Buyers" - produced by Business in the Environment, the Chartered Institute
of Purchasing and Supply and KPMG for integrating the environment on to the
purchasing and supply chain. Published
by Business in the Environment, 8 Stratton Street, LONDON W1X 5FD.
b
"Environmental Action
Guide" (produced by DETR) for building and construction works, building
maintenance and property management. Published
by HMSO (ISBN 0-11-752311) and available on the DETR website – www.detr.gov.uk.
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