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Incorporating sustainability into simple procurement processes

To be effective, sustainability needs to be incorporated into an organisation's day-to-day procurement processes. This means placing sustainability alongside other value-for-money considerations such as price, quality and after-sales service. Modified tendering and contract management processes encourage suppliers to improve sustainability of their products and support the market for sustainability products.

This section provides practical guidance on how sustainability considerations can be incorporated into simple procurement processes to buy commonly used products such as office supplies or equipment, appliances, electrical goods, furniture and other items.

Additional steps can be added depending on internal agency processes or the goods or services being purchased.

1. Define the need and specifications

Sustainability implications must be considered when deciding on goods or services to be purchased. Researching potential impacts will save time, effort and costs in the long term. Apply simple checklists for determining impacts during a product's life cycle:

• product design and construction (e.g. materials it is made from);
• transport and delivery impacts (e.g. distance travelled, packaging);
• operation and maintenance during use;
• end-of-life disposal options.

Environmental requirements for a product must be clear, open and encourage competition between potential suppliers. Use information gathered on the potential impacts of the product to develop environmental requirements for the contract. Ensure they are:

• achievable i.e. suppliers can actually meet them;
• measurable in terms of providing environmental benefits (energy or water saved, waste avoided etc.);
• not so specific as to prevent innovative solutions that are fit for purpose, sustainable and able to meet the tender criteria.

A variety of resources are available to help you develop specifications for particular products. In addition to the sources of information you use to determine sustainability impacts of the product you are purchasing, make use of those listed in the Links section.

Sources of information on potential product impacts

• NSW Government agencies: OEH; Sydney Water; Finance and Services and others
• Purchasing staff or users of products within other government agencies.
• Industry and non-government organisations which list information about a range of product groups.
• Manufacturers and suppliers.

2. Establish potential sources of supply

There are a wide variety of sources of environmental information on potential suppliers, including common-use or period contracts, catalogues, online resources and industry or government directories. While some larger suppliers openly market their 'green' credentials, smaller companies can also provide cost-competitive sustainable products or can be flexible in sourcing them. It pays to shop around.

If a contract will establish a high-value or long-term relationship with a supplier then there is scope to require the successful tenderer to address the sustainability of their own operations as well as that of their products. This could include requirements to have an accredited environmental management system and have operational sustainability policies and fully comply with environmental legislation. Such requirements will need to reflect the ability and potential cost to a supplier to meet them; this could be a major imposition on a small to medium enterprise.

3. Determine procurement method and invite quotations from suppliers

Many sustainable products are available through common-use period contracts or can be sourced by suppliers on contracts.

If not available on period contracts then products may need to be sourced off-contract depending on the nature of the product.

4. Evaluate responses from suppliers

Sustainability considerations should be a mandatory selection criterion alongside criteria such as price, quality and availability.

Assessing the validity of environmental claims made about products is covered in How to buy sustainable products. Evaluation of these claims may need to be undertaken by staff with the relevant skills and knowledge of sustainability issues. Agencies such as the Federal Department of Sustainability, Environment, Water, Population and Communities; or Sydney Water can provide information to help with this process. For complex or high-value purchasing decisions an evaluation panel with representatives from these agencies may need to be formed.

Weighting given to the sustainability criterion will vary from tender to tender according to the sustainability implications associated with the product to be purchased. The greater the weighting given to the sustainability selection criterion, the greater the potential for measurable sustainability improvements.

5. Monitor supplier performance

It is critical to monitor the performance of the selected product and its supplier to ensure continuous improvement and better product design and that contract conditions are being met. Some sustainable products have, in the past, had a poor reputation for quality, performance and cost-effectiveness compared to products with fewer environmental credentials. It is important that any problem with the product or its supplier is addressed immediately. Obtain feedback on a product's performance from its end-users. Purchasing a small quantity and piloting it in a limited trial is another common practice.