Social and Environmental Considerations in Tender Procedures

Last month Crown Commercial Services issued revised guidance on how you might include social and environmental aspects into procurement procedures. The guidance looks at the different stages of a tender process and provides information on the regulations that apply and to what extent you can design your procedures to include social and environmental aspects.

Some of the most useful guidance comes in terms of how to include social and/or environmental aspects in specifications, award criteria and contract conditions.

For example, your specification could require a bidder’s product or service to meet the requirements of an environmental or social label, such as energy efficiency standards. However, the guidance does remind us of the conditions the label concerned must meet in order to comply with the Regulations, especially the need to accept equivalent labels and that the label requirements only concern criteria that are linked to the subject matter of the contract.

Regulation 67(2) now expressly states that award criteria may include environmental or social aspects as long as a clear link with the subject matter of the contract can be demonstrated. One way of giving more weighting to environmental aspects is to take a life cycle costing approach to the evaluation of ‘tender price’ where you evaluate the cost of a product over the whole lifecycle allowing scope to consider environmental factors such as electricity consumption and disposal/recycling costs. The method used for the assessment of costs imputed to environmental externalities does need to be transparent and objective (i.e. bidders need to be told what the assessment methodology is up front.)

Regulation 70 now allows special contract performance conditions to be incorporated into the terms and conditions of a contract, provided these have been highlighted in the procurement documents and the condition can properly be linked to the contract. Examples might be terms and conditions around recycling of waste or packaging, or in relation to fair trade requirements or in relation to a percentage of the workforce deployed on your contract to be in the form of an Apprentice (note apprentices must be for your contract in question not generally within the supplier’s workforce). In particular, if you really want to achieve social value through your procurement activity e.g. driving the use of apprentices, then it’s generally thought that the best way to do this is through the use of terms and conditions i.e. to include a requirement for the successful bidder to provide it in your contract terms and conditions, rather than evaluate it as part of the bidder’s proposal.

If you are using a CPC framework agreement, suppliers on the framework will already have passed a selection stage evaluation of social and/or environmental aspects. This will have included an assessment of any breaches in environmental, social or labour laws, the environmental management systems in place and/or any unlawful discrimination findings by employment tribunals or upheld complaints by the Equality and Human Rights Commission.