Procurement by Northumberland National Park Authority

A Sustainable, Fair and e-Procurement Policy

What Is Meant By Procurement?

Procurement is the process of acquiring goods, works and services, covering both acquisitions from third parties and from in-house providers. The process spans the whole cycle from identification of needs, through to the end of a services contract or the end of a useful life of an asset.

Current Procedures

The National Park Authority currently acquires goods, works and services on a totally devolved basis. All nominated officers are able to place orders within their budgets. There is no procurement policy as such. All controls and checks are purely of a financial nature and there is no analysis of the environmental, economic or social impact of the National Park Authority's cumulative spend.

Aspiration

The National Park Authority recognises that its procurement decisions can have a large impact on the environment and people, both locally and globally. Many of the goods and services it buys can cause damage to the environment or public health through the use of raw materials, the manufacture of goods and their distribution, use and disposal. Targeting spend more effectively will accelerate the delivery of the National Park Authority's Vision for sustainable rural development. It will also end the anomalies and the inefficiencies that inevitably result from devolved procurement. Buying goods and services using an electronic system rather than using a paper ordering process will also reduce costs and increase efficiency.

Best Value and Corporate Procurement

Northumberland National Park Authority aims to provide services that offer best value in terms of economy, efficiency and effectiveness; and that have the capacity to improve performance. Procurement should be an important element in any best value or other strategic review of service. Such reviews should include consideration of alternative methods of provision.

In the context of a procurement process, obtaining 'best value for money' means choosing "the optimum combination of whole life costs and benefits to meet the customer's requirements".  This is not necessarily the lowest initial price option and requires an assessment of the ongoing revenue/resource costs as well as initial capital investment. The National Park Authority's requirement should include environmental, economic, social and other strategic objectives and be specified at the earliest stages of the procurement cycle. The criterion of best value for money is only used at the award stage to select the bid that best meets the requirement.

Partnering Contracts

Collaboration, networks and links with other organisations, can provide benefits to the National Park Authority. Working with other organisations to combine buying power, to procure or commission goods, works or services jointly or to create shared services should be seen as advantageous. This form of public-public partnership should, in appropriate circumstances, be regarded as an option capable of delivering economies of scale.

Responsible Procurement

All products have an impact on the environment. It may be due to the use of valuable natural resources, or pollution caused during manufacture or processing. Energy use during production or distribution may also be excessive, particularly if products are produced many miles from their destination. There are also issues relating to the eventual disposal of products. It is important therefore that the products the Authority uses have the minimum impact possible on the environment - they should be sustainable.

Goods and services may also be produced and delivered under conditions which involve abuse or exploitation. The globalisation of trade means that many of the goods on sale in the UK have been produced by people who experience dangerous or discriminatory working conditions. These activities inevitably affect the environment of other countries and often their National Parks. Fair trade is thus an issue that needs to be addressed in any sustainable procurement policy for the National Park.

Northumberland National Park Authority therefore undertakes to follow a sustainable and fair procurement strategy and give guidance to its employees and suppliers to ensure that they incorporate environmental, economic and social issues into their procurement practices.

Achieving Environmental and Social Sustainability

To achieve the National Park Authority's objectives relating to environmental sustainability, the organisation recognises that it should take a positive lead, by carrying out its procurement activities in an environmentally responsible manner. The National Park Authority will therefore work to:

• reduce the number of goods and services procured by cutting down on waste and repairing or reusing existing goods
• purchasing products and services that use fewer natural resources in production and distribution and promote Fair Trade products
• take account of whole-life costs, quality, environmental impacts and other benefits and not just the initial price
• purchasing products that can be recycled or disposed of with minimal environmental damage
• buy the most energy-efficient products where they give value for money, taking account of whole-life costs, using the European Commission's mandatory energy-labelling scheme
• purchasing locally where possible, to reduce the impact of transport, as long as the criteria above are met
• ensure procurement is consistent with this statement, by conducting at least one pilot project or environmental audit each year

while complying with the law, including EC procurement rules and international agreements on trade.

The National Park Authority will also work with its suppliers, wherever possible and practical, to green the supply chain by:

• promoting environmental awareness amongst suppliers and ensuring they are aware of the National Park Authority's Sustainable and Fair Procurement Policy
• providing relevant information and training for specifiers and end users
• including environmental specifications in all contract documentation and ensuring environmental criteria are used in the award of contracts
• encouraging suppliers to introduce more environmentally friendly processes and goods (which can be verified) at competitive prices
• assessing the environmental credentials of major suppliers and their goods
• reduce the number of goods and services procured by cutting down on waste and repairing or reusing existing goods
• the best environmental option is to procure and use less. This will conserve resources and reduce pollution, as well as significantly reducing the amount of waste produced
• before buying any goods staff should consider whether consumption can be reduced by reusing or repairing existing materials and goods
• ivestigations should also be made into whether alternative procedures can be put in place to remove the need to buy goods and services
• or example, can goods be shared, borrowed or loaned rather than purchased?
• use the least environmentally damaging goods and services and promote Fair Trade

Procurement decisions should be based on environmental criteria along with other major factors such as value for money, quality and whole life costs. The National Park Authority should assess whether goods and services:

• are durable, reusable, refillable or recyclable
• contain reused, recycled or renewable raw materials
• are energy and resource efficient
• use minimum packaging and encourage waste reduction
• are non (or minimum) polluting
• promote Fair Trade
• are locally produced
• are free from ozone depleting substances, solvents, volatile organic compounds and other substances damaging to health and the environment
• are from certified sustainable sources
• cause minimal damage to the environment in their production, distribution, use and disposal, and
• are on the most competitive terms having regard to Best Value.

While preference should be given to goods that have been independently certified by a credible certification scheme it should be noted that in certain circumstances this can act against the interests of sustainability and local suppliers.

Provide value for money by taking into account the whole life costs of goods and services

The National Park Authority should take into account all aspects of costs including running and disposal costs, as well as the initial purchase price. The main elements to take into account when considering Whole Life Costs are:

• direct running costs – e.g. resources used over the lifetime of the product or service such as energy, water
• indirect costs – e.g. loading on cooling plant arising from energy inefficient equipment, maintenance costs, training
• administration costs – e.g. COSHH overheads from buying hazardous products requiring additional controls and special handling and disposal
• spending to save – e.g. investing in higher levels of insulation to save heating and reduce bills
• recyclability – e.g. creating markets for our own waste by buying recycled products, to promote the development of long term markets for localised recycling activities
• cost of disposal – e.g. paying a premium at the outset to reduce waste by choosing a product which is more durable, re-usable and recyclable and does not contain hazardous substances requiring disposal in a special way. Consideration should be given to current and impending EU and UK waste regulations

After considering these aspects it may mean value for money is provided by investing in a more expensive product or service initially, to reduce costs in the long run.

What Is E-Procurement And Why Are We Doing It?

Electronic procurement (e-procurement) is an area that is developing and changing at an extremely rapid rate. The Procurement Policy relating to this aspect needs to remain flexible to ensure that it stays responsive to emerging developments, and must include the capacity for improvement based on continuous learning. A number of steps will focus on delivering better services, for better value using closer relationships with suppliers and new procurement processes including procurement on-line.

• Increase market share - Part of the e-procurement initiative is to enable competitive local businesses to trade within the marketplace
• Reduce cost of sales - Purchasing electronically via the Internet from electronic catalogues or by e-mail reduces the administrative costs of both the buyer and supplier of placing an order.  It is intended to virtually eliminate paper orders and invoices and maximise the benefits of electronic technology

Quicker payments - Purchasing electronically also reduces the administrative costs of both the buyer and supplier in invoicing. In addition the Authority is aiming to reduce its administration costs by reducing the manual processing of invoices.

• Reduce cost of inventory -Technology will be used to reduce the cost, and improve the efficiency and effectiveness, of all aspects of the Authority's procurement process and its suppliers and contractors. There are distinct advantages for suppliers, including smaller firms.
• Improve management information and provide marketing data - E-procurement increases the amount of information available to both parties and allows them to plan for the future
• Offer the technology to other sectors and other customers - Some suppliers already have the capability to send the Authority electronic invoices, so we are currently investigating how best to process and store these.

Local Purchasing

The National Park Authority's contracts for goods, services and works cover a wide range of requirements and local suppliers already account for a significant level of expenditure. The National Park recognises its responsibilities to local communities and the opportunities afforded through procurement to help deliver corporate objectives, including the economic, social and environmental objectives set out in the National Park Management Plan. Local business that can meet the Authority's social and environmental objectives should be able to compete for work alongside contractors from outside the area and the National Park will encourage them to do this by:

• ensuring that developments emanating from the National Park's e-Business Group, particularly the e-business portal, are adopted, as appropriate developing and publishing a 'Selling to the National Park' guide as a means of clarification for suppliers and an opportunity to market the National Park
• publishing details of forthcoming bidding opportunities and contact details for each contract on the internet
• reviewing procedures to examine methods of reducing the challenges facing small and medium enterprises when doing business with the National Park
• increasing the level of contact with local business by working in liaison with the Chamber of Commerce to sponsor and support 'meet the buyer' events
• encouraging supplier partnerships to better facilitate competitive quotations for National Park business, through consortium bids.

Equality

Northumberland National Park Authority is committed to promoting equality of access. The National Park will treat all people equally including those contracting to supply goods or services. It will not discriminate on the grounds of age, colour, disability, ethnic origin, gender, and sexuality or on any other unjustifiable grounds. Suppliers or contractors appointed for the provision of goods, services or works will have to comply with these criteria.

Probity

Controls within the procurement and financial processes exist to promote good practice and not only help the prevention of fraud but also protect the individuals concerned against allegations of fraud. Compliance with appropriate legal requirements and the internal controls set out in the Financial Procedures is essential. Involvement in procurement requires consideration of the following:

• there is a duty to behave honestly and in a trustworthy manner maintaining standards which the public is entitled to expect
• all staff have a fiduciary responsibility which means they are individually and collectively, responsible for the safe and proper arrangements relating to public spending
• all managers have a responsibility to ensure systems and appropriate training are operating to prevent fraud.

Risk Management in Procurement

It is essential that the risks associated with procurement are properly assessed and managed. This will be particularly important when changing service providers and suppliers and will need to be considered in respect of both initial and ongoing costs and service level. Management of risk involves having processes in place to monitor risks, access to reliable current information about risks and appropriate levels of control operational within a framework of risk identification and analysis.

Risks, it is recognised, must be managed in an integrated way. Environmental concerns in contract arrangements can either be addressed at the specification stage of the buying process, such as specifying the content of recycled materials or specifying certain substances cannot be used or by building environmental factors into the assessment process.

Sustainability

The National Park recognises the need to carry out procurement activities in an environmentally responsible manner and will, therefore:

• comply with all relevant environmental legislation
• encourage contractors and suppliers to investigate and develop environmentally friendly procedures and products
• ensure that suppliers environmental policies are considered during tender evaluations and that, where appropriate, environmental criteria are used in the award of contracts
• wherever possible and practicable, specify the use of environmentally friendly materials and products
• ensure that specifications, as appropriate, provide the facility for suppliers to provide environmentally friendly alternatives.

Terms and Conditions

The following general statement will be included in the Standard Terms and Conditions of all new contracts:

The contractor shall ensure that the Services or Product (as the case may be) are provided or supplied in accordance with the National Park Authority's Sustainable, Fair and e-Procurement Policy. Copies of any relevant documents setting out the National Park Authority's policies in this regard shall be provided to the Contractor upon request.

Environmental Specifications and Criteria

All procurement of goods and services should be carried out in accordance with EU and UK legislation, Standing Orders, Financial Regulations and other procedures determined by the National Park Authority. Environmental requirements should be incorporated into contracts ensuring they:

• are appropriate and relevant to the product or service
• are included within the tender
• apply equally to all potential suppliers or contractors
• are not anti competitive
• do not specify brand products
• do not refer to non-commercial matters
• other environmental requirements specific to the contract

The National Park Authority will establish criteria by which the environmental impact can be taken into account during tender evaluation and this will be clearly identified in tender documentation. The weight given to the environmental impact of the tender will be dependent on the Authority's perception of the risk associated with that purchase. The National Park Authority will continually review its contract specifications and assessment to ensure they comply with environmental legislation and reflect best practice.

Environmental awareness relating to procurement

To ensure full account is taken of the Sustainable and Fair Procurement Policy, the National park Authority will develop and implement a training programme to raise awareness and to explain the procedures for implementing environmentally friendly procurement. This will provide detailed guidance to help employees buy or specify products and services which cause the least environmental and social damage.

Promoting Environmental Awareness amongst Suppliers

Whenever the National Park Authority invites tenders for new contracts a copy of the Sustainable and Fair Procurement Policy will form part of the tender documentation. Suppliers who initiate and promote good environmental practice and provide a good service will be recognised. The National Park Authority also intends to highlight opportunities for suppliers to improve their environmental performance through disseminating best practice and directing suppliers to further sources of information.

Encouraging suppliers to introduce more environmentally friendly processes and goods at competitive prices

The National Park Authority's intention is to increasingly develop specifications that are environmentally friendly. These enhanced specifications should encourage manufacturers and suppliers to develop environmentally preferable goods and services, at competitive prices.

Assessing the environmental credentials of major suppliers and their goods

Ultimately the National Park Authority would like its suppliers to be 100% environmentally and socially committed. Suppliers and contractors will increasingly be asked questions relating to their environmental performance.

Competencies and Development

The National Park is committed to Training and Development of all staff and members involved in procurement. An annual training programme will be published and delivered as an integral element of the Procurement Improvement Plan to support the programme of modernisation and the development of innovative procurement methods.

Training delivery will be via both internal and external providers, as appropriate, following a skills audit. The continual measurement of awareness and the competency of Procurement related staff will be ongoing.

Procurement Procedures

In order to introduce a sustainable, fair and e-procurement policy the National Park Authority needs to totally re-examine its approach to purchasing. In particular it needs to decide where in the structure of the organisation responsibility for procurement lies. It is likely that some centralisation of the purchasing function will be necessary if the National Park Authority is to have a workable policy. It is therefore recommended that one person be given specific responsibility for developing and implementing the proposed policy.

Jonathan Mullard
Director of Park Management
January 2005