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Sustainability implementation in tenders

By June 17, 2022No Comments

A key focus of the Procurement Regulation Conference which I attended this week was on the introduction of Sustainability within the public procurement agenda.

The procurement legal framework is changing quickly, and the drive to introduce Sustainability is fierce, members can find current requirements on Sustainability within our Sustainability HUB as there are any developments these will be included in the hub and notified to members through this newsletter.

Summary on Sustainability.

Sustainability terminology is the consideration of social and environmental factors alongside the economic factors beyond the core purpose of the contract. There is an expectation that purchasing power of organisations such as the NHS will be used to leverage to support policy for national and local procurement.

The objectives focus primarily on climate change, supplier diversity, innovation and resilience to encourage positive social and environmental impacts.

Key Public Procurement Policy Notes (PPN’s) issued in the UK include

PPN 06/20

PPN 06/21

PPN 05/19

There are currently significant constraints and boundaries in the UK and what can be delivered currently is limited as there is a clear tension between open market, cost and horizontal (non-related) policies. The Public Contracts Regulations (PCR 2015), Social Value Act and various policy notes are often unclear and whilst here are opportunities within the WTO and GPA procurement systems within which the UK has to work, as the case law in existence is developed with a cross border/ trade emphasis.

Key decisions that seem to be at the heart of the discussion is the requirement under the current rules for award criteria to be directly related to the subject matter of the contract, award criteria must not be directly or indirectly discriminatory to competition and award criteria must be capable of being understood objectively by well informed and diligent tenderers. Data quality is problematic and it is difficult to understand what people are asking for and what they expect to achieve.

Contracting Authorities are currently facing difficulties in ensuring that all 3 requirements are met, so there is a degree of uncertainty – particularly in indirect sustainability requirements which may not be directly linked to the subject matter of the contract.

There is also a question around the effectiveness of Social Value as evidence is limited on the implementation of social value awards. Those who are supposed to benefit from social value submissions have limited recourse if they wish to challenge the outcomes that a winning bidder has proposed.

Practical limitations currently are that many contracting Authorities don’t have the capability and capacity to deliver against social value and sustainability, and it is unclear how much social value and benefit can be generated this way.

This said, it is mandatory for the majority of public contracts to include 10% weighting as a minimum so regular feedback and a real time learning process is underway for contracting authorities and the new procurement regulations that are expected in 2023 (sometime) are expected address some of the current regime’s barriers.

Natalie Creaney

About Natalie Creaney