Integrating sustainable development principles into procurement

Dr Gordon Murray18 November 2009

Principles, regardless of contract value• Equal treatment• Transparency • Non-discrimination• Proportionality• Mutual recognition

The commissioning cycle

Strategic needs assessment

Decide priorities and outcomes

Plan and design services

Optional appraisal

Sourcing

Delivery

Monitor and review

The commissioning

cycle

Eight Principles of Commissioning1.Understand the needs of users – through

inclusive consultation2.Consult with potential providers3.Focus on outcomes for users4.Map the range of potential providers5.Consider investing in the capacity of the

provider base6.Ensure transparency7.Seek long-term contracts and risk sharing8.Seek feedback

Strategic needs assessment

Decide priorities and outcomes

Plan and design services

Optional appraisal

Sourcing

Delivery

Monitor and review

Determine the need

Supplier selection

Contracting

Ordering

Expediting

Follow-up/evaluation

The commissioning

cycle

The purchasing

cycle

procurement

What can you do?

POLICY

STRATEGY

THE PROCUREMENT

CYCLE

Sustainable Procurement Policy

• Member & Chief Officer commitment• Relationship with Sustainable

Community Plan and ‘Procuring the Future’

• Linkage with strategic procurement management, Efficiency Strategy, Local Economic Development Strategy, Climate Change Strategy, and Procurement Strategy

• Legal compliance• Clear message to be communicated

to the market and staff• Commitment to act throughout the

procurement cycle• Commitment to on-going

improvement• Plans for reviewing effectiveness

Policy & strategy

• Set sustainability as a procurement objective & KPI

• Ensure access to procurement know-how

• Use cross-functional teams• Focus on outcomes/outputs• Publish long-term plans• Develop approach to unsolicited

openings• Encourage early dialogue with the

market• Accept variants• Use ‘lots’ and pilots

Maximise opportunities throughout

the Procurement Cycle

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

Identifying the need

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

Focus on the problem &

desired outcomes;Question need

to procure.

The Business Case

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

A robust options appraisal;

consider wider community benefits;

maximise opportunities for innovation;

market dialogue;progress or stop.

Defining the Approach

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

Eliminate barriers; grants/contracts;

choice of procedure; framework agreements,

competitive dialogue, etc.; duration; consortia bids;

bundling; shared services; use of variants; social

clauses;‘Forward Commitments’;

‘positive action steps’;Performance based;

consultation on draft specification;

…

Supplier Appraisal

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

Communications strategy – reverse marketing;

check timescale is pragmatic; simplify PTQ;

statement of community benefits criteria;

RELEVANT TO THE SUBJECT MATTER

OF THE CONTRACT

Tender evaluation

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

Transparent criteria driven by need

identified; most economically

advantageous tender (MEAT); WLC;

community benefits criteria can be used;relevant to subject

matter of the contract.

Contract award

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

Invest in constructive debriefing

for successful & unsuccessful bidders;listen for constructive feedback on how to

improve;encourage development

of improvement plans

Manage the contract

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

Agree performance management

and improvements;two-way constructive

feedback; work with provider to

maximise community benefits

Closure and capturing lessons learnt

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

How can we do it better?

Competitive procurement

• Incentivise sustainability• Evaluate risks• Evaluate variants• Test the business case

Post award

• Risk/reward share• Embed within contract

management continuous improvement plan

• Collect and learn from the lessons (on both sides)

8. Closure / Review Need

1. Identify Need

2. Develop Business Case

3. Define Procurement Approach

4. Supplier Appraisal5. Tender Evaluation

6. Award Contract

7. ManageImplementation

of Contract

Utilise Gateway Stages

Challenge

Challenge

Challenge

Challenge

Challenge

Challenge

A procurement policy and strategy to improve sustainability

• Strategic objective• Focus on outcomes• Cross-functional teams• Recognise the market as an asset• Performance manage

Integrating sustainable development principles

gordon.murray@idea.gov.uk www.slideshare.com/DrGordonMurraywww.twitter.com/DrGordie