2. Planning and Identifying Requirements
Successful implementation of the Policy on Green Procurement will require the identification and implementation of environmental performance opportunities at both the strategic and operational levels, taking into consideration specific departmental buying patterns, sustainable development targets and other Government of Canada priorities. The potential benefits of combining or standardizing multiple requirements within a department or across government is a key consideration in achieving value for money while supporting environmental stewardship. These principles align well with the Public Works and Government Services Canada (PWGSC) government-wide commodity management activities which include reviewing, planning, organizing, and controlling of a distinct group of goods and services to provide the most appropriate total cost of ownership and disposal while achieving value for money. The opportunities presented under a commodity management approach to procurement will necessarily result in simpler implementation of the policy requirements by departments. However, departments continue to be responsible for the planning and identifying of their procurement requirements including bringing these requirements to the attention of the Commodity Management Directorate at PWGSC. In addition, departments are responsible for the maintenance, operation, use and disposal whether such assets or acquired services were purchased as a result of the PWGSC commodity management activities or other method.
2.2 Opportunity to Consider Environmental Impacts and Reduce Costs
The early state of identifying a need or setting the user's requirement and developing the business case is a key point at which consideration of environmental performance should take place.
Prior to establishing a specification, there is little in terms of policy, regulations or trade agreements that affect or limit the scope to take environmental performance considerations into account. However, efficient and effective use of financial resources does need to be assured.
It is usually the program managers, project authorities or other internal users who identify the need. It is essential that they work closely with the contracting authority to ensure that full advantage is taken to consider environmental issues at this stage, and in the subsequent development of specifications.
This stage of the procurement process is a key opportunity to consider environmental impacts and reduce costs by:
- Rethinking – e.g. service instead of product; make or buy; new or used; combining or standardizing requirements across multiple users as a means of increasing the potential to acquire environmentally preferable goods and services that reflect value for money
- Eliminating – e.g. hazardous material content
- Reducing – e.g. demand for goods and services, energy consumption, quantities of natural resources used
- Re-using – e.g. packaging, existing equipment
- Recycling – e.g. paper, glass, metals, plastic, fluids
- Disposing – e.g. minimise quantities, divert from land fills through resale or donation
- Alternatives – e.g. finding an alternative for hazardous materials has a significant cost benefit. Hazardous materials disposal costs are high and employees also require costly regular training to legally handle it
It is also important to review past experiences related to the integration of environmental performance considerations in the planning, acquisition, use, and disposal phases in order to build on that experience and ensure continuous improvement. This applies to managing environmental impacts as well as other aspects of the management of assets and acquired services.
An important skill to develop is the ability to understand environmental attributes. Appendix 1 provides a description of regularly encountered environmental terminology.
Departments should consider developing a risk-based approach to enable prioritization of actions. This includes looking at impacts on the environment as well as the feasibility of implementation based on operational requirements.
The following examples are designed to demonstrate that thinking widely about possible solutions can lead to the discovery of environmentally preferable, and often more cost-effective, solutions.
Example 1: Rethinking the approach to road maintenance by recycling old road materials on site, rather than bringing in new material from elsewhere. This can enable costs to be reduced, will benefit the environment and will save time.
Example 2: Rather than purchasing new facsimile machines or printers, consider multi-function equipment that can print, facsimile, copy and scan, that are Energy Star compliant to save energy costs and that have duplex capacity to reduce paper consumption and paper costs. Further consider lease/buy options to reduce maintenance and disposal issues.
Example 3: Rather than awarding waste management contracts for packaging waste, consider working with suppliers to introduce returnable packaging for delivery of the products supplied.
2.3 Requirement Definition
Departments have a great deal of scope to decide how they define their requirements. Specifying in terms of environmental outcomes sends a clear message to suppliers that departments take environmental issues seriously. In developing specifications, the total life cycle costs should be considered. Care must be taken to ensure that specifications do not discriminate against products or providers or restrict competition.
Departments are able to define their requirements or develop specifications for goods and services that are resource efficient. Overemphasis on initial capital costs may cause departments to favour, for example, a product that operates on high energy even when more energy efficient devices would result in cost savings in the long run. Similarly, neglecting future disposal or replacement costs may cause departments to select goods or services based on their acquisition cost, even if for example more durable, energy efficient or more easily disposable goods would cost less over the entire period of ownership. The best practice is to find win-win opportunities where procurement decisions are both economically viable and beneficial to the environment. Environmentally preferable goods or services are generally produced and disposed of in ways that have less impact on the environment. For example, they could contain fewer hazardous or toxic materials or use less energy or reduce waste because they contain recycled materials, use less packaging or provide packaging that contains recycled material, is recyclable or will be taken back by the supplier.
2.3.2 Performance/Functional Specifications
Departments are encouraged to specify their requirements in terms of performance or functional specifications, which include environmental aspects. Focussing on the outcome or functionality allows suppliers the opportunity to be innovative, to suggest more environmentally preferable solutions, and to find the most cost-effective ways of meeting environmental objectives. This can include specifying the primary materials used. For example, requiring that:
- Recycled or a percentage of recyclable materials be used or
- Ozone depleting substances must not be used.
Performance-based specifications to prescribe specific environmental outcomes such as energy efficiency or noise restrictions also promote creativity and innovation when the onus is on the bidder to find a solution.
It is recognized that using performance or functional specifications may not always be cost-effective given the nature or the dollar value of the goods and services (e.g., commercially available off-the-shelf goods). In such instances, it may be more practical to turn to goods and services that have been certified through an eco-labelling scheme.
Trade agreements recognize that the choice of specifications is entirely the responsibility of procuring entities. The only limit to this discretion is the obligation not to create unnecessary obstacles to trade. Provided that the principles of non-discrimination, competition and transparency are respected, the trade agreements do not impede the pursuit of environmental objectives.
2.3.3 Continuous Improvement
There may be opportunities to work co-operatively with the supplier community to reduce the government's environmental impacts including those related to the supply chain. Opportunities could include for example, reducing packaging by looking at delivery frequency and scheduling; reducing the hazardous material content in products; where the deliverables are reports (progress, draft or final), specifying these be printed or copied double-sided on recycled paper, or sent electronically. Also, wherever possible, administrative efficiencies such as using acquisition cards should be sought as they often represent opportunities to reduce the environmental impacts of government operations.
There are also a variety of ways in which e-communication can contribute to the reduction of environmental impact. For example, transferring documents electronically and holding catalogues in electronic format will reduce the amount of paper used.
Whenever possible environmentally preferred goods, services and related methods should be clearly defined in the solicitation and contract documentation.
2.3.4 Environmental Labels
Environmental labels include certification programs or eco-labels as well as international symbols such as ENERGY STAR ®. Environmental labels can be useful when defining requirements. For example, Natural Resources Canada's Office of Energy Efficiency promotes and administers the ENERGY STAR symbol in Canada and it has developed a range of tools including the Purchasing Tool Kit to help procurement officials develop specifications that will result in the purchase of the most energy-efficient products in the marketplace.
Specifications may also be developed based on eco-label criteria where these are appropriate to define the characteristics of the subject of the requirement. The holding of the relevant label may then be accepted as evidence of compliance with the specifications. However, as with any other standard, authorities must also be prepared to accept other means of proof that the good or service offered meets the specification stipulated.
It is possible to define one or more options with higher environmental performance in addition to a "basic" option. Based on the options defined, at the bid evaluation and contract award stage, the best option can be selected according to criteria previously decided and made clear in the solicitation documentation.
For example, a basic requirement for post-consumer waste content could be set, along with options for higher post-consumer waste requirements. According to the award criteria set out in the solicitation documentation, the options can be evaluated and the bid that represents the best value for money can be selected.
2.3.6 Early Engagement
It is critical that departments engage the procurement authority in the planning phase so that a common understanding of the requirement is developed at an early stage, this way procurement considerations are dealt with when time lines are less critical and the procurement lead time can be minimized.
It may also be beneficial to initiate early dialogue with the supplier community. Before finalizing the specifications, it can be useful to find out what is available or whether there is sufficient supplier capacity to respond. In addition it is an opportunity to inform the supplier community of current and future environmental performance requirements. This provides notice to suppliers to allow them to position themselves for the future as well as stimulate more innovative responses from your supplier community. Care must be taken to ensure that supplier engagement activities are carried out in a manner that is open, transparent and fair to all potential suppliers.
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