Powering sustainable procurement

Following its commendation at the recent National Government Opportunities (GO) Excellence in Public Procurement Awards, agendaNi speaks to Rodney Smyth, Specialist Procurement Manager within Business Services Organisation’s (BSO) Procurement and Logistics Service, about the collaborative procurement for energy which BSO led across Health and Social Care sector in Northern Ireland (HSCNI).

Announced in July 2016, the sustainable energy programme focussed on delivering energy contracts that offer best value for HSCNI whilst sustaining the health and wellbeing of citizens in Northern Ireland.

BSO’s Procurement & Logistics Service team (PaLS) led the collaborative procurement of electricity and natural gas supplies, on behalf of HSCNI organisations, including all six Health Trusts and Northern Ireland Fire and Rescue, resulting in a four-year, £140 million contract.

The contract secured 100 per cent of electricity from renewable sources, as well as a host of supports from the energy suppliers including initiatives, incentives, measures and services linked to health and wellbeing.

Smyth explains: “The environment around us impacts on people’s health subsequently HSCNI aims to have sustainable development as a core element of its business and ultimately make life better through the delivery of sustainable health and social care. Our challenge was to deliver a new energy contract that would support sustainable development objectives and Northern Ireland’s Health and Wellbeing strategy by adopting an approach based on the sound principles of sustainable procurement focusing on environmental issues, economic considerations and social impacts linked to health and well-being.

“As a leading buyer and the second largest public sector consumer of electricity in Northern Ireland there was a requirement for HSCNI to lead by example and create demand in the market for a more sustainable energy supply.”

Historically requirements for electricity and natural gas had been met under a number of separate contracts based on a fixed price supply, usually over a 12 month period. Often the awarding of these contracts prioritised cost and gave little consideration to the HSCNI’s sustainable development objective.

“As a leading buyer and the second largest public sector consumer of electricity in Northern Ireland there was a requirement for HSCNI to lead by example and create demand in the market for a more sustainable energy supply.”

Explaining the basis to the Northern Ireland market’s largest energy contract and the first Northern Ireland public sector energy tender to include sustainability support, linked to health and well-being, Smyth says: “A contract evaluation group was established which was representative of all key stakeholders to review and agree the procurement strategy for the new contract.

“It became apparent early in this process that any new contract must support HSCNI organisations in the delivery of their sustainable development requirements. The group recognised the link between carbon emissions and climate change and were committed to minimising the impact of one of the determinants of health and well-being.”

Delivering a new contract in compliance with the Public Contracts Regulations 2015 and delivering sustainable procurement considerations that could be acceptable to all nine participating HSCNI organisations posed a challenge, admits Smyth, which was met with a formal market engagement process, attended by the majority of suppliers.

As a result, tenderers were required to submit an annual plan, based on the Department of Health’s Making Life Better framework, detailing a programme of initiatives, incentives, measures and services linked to the themes of the framework.

As well as a transition to 100 per cent renewable electricity from 1 April last year, which to date is estimated to have delivered carbon savings of more than 116,000 tonnes, and other initiatives including:

• the use of electric vehicles for HSCNI and access to charging points;
• over 500 people, including patients, families and carers being given access to various events as part of a wider commitment to access to events for charities which focus on health and wellbeing and underprivileged young people;
• volunteering programmes and volunteering days; and
• energy saving awareness schemes.
It’s estimated that falling energy prices and the competitive tender process will result in £4 million electricity cost reduction in the first year of the contract.

As Northern Ireland’s only finalist, BSO PaLS received a highly commended UK National award for Procurement Innovation/Initiative of the Year at the GO awards in March. The awards recognise organisations continuously raising the benchmark in public sector procurement.

Smyth hopes that the success of the initiative will serve as an example of the application and benefits of including sustainable procurement considerations into relevant contracts.

He adds: “As well as briefing the HSCNI Regional Procurement Board on the project, we will use it along with other case studies to create further awareness with our customers to ensure that all relevant sustainable procurement requirements are at the very least considered at the pre-tender planning stage of all relevant procurement projects.”

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