Digital toolsets enabling a sustainable approach to procurement*
By Rob Cook, Marketing Manager, TenderLink
As a middle-aged (and some would claim) ‘hippy’, it always strikes me as interesting that although sustainability is a holistic concept, it’s often actually used as a flowery phrase to describe the often gruelling process of reducing costs. While this use currently seems to be the basis for many discussions, it’s also important to note that much of the sustainable procurement activity we see within the local government space extends to far more than purely financial matters.
Sure, the recent New South Wales council amalgamations are a prime example of financial sustainability. While controversial, the argument for amalgamation is based on the assumption that fewer councils will be more financially sustainable to the State in the long run; in effect, the amalgamations are a prime example of the never-ending search for efficiency dividends within the sector.
There’s also a push towards more environmental sustainability, with such concerns increasingly being formalised within procurement requirements.
But it’s not just a two horse race. Over the last few years we’ve also see a concerted effort towards sustainability for local businesses and community, expressed most formally in what can be broadly termed local supplier preference policies. Local pressure for this is immense, as illustrated in Tasmania’s recent tender for the state’s new police boat, with the award decision going in favour of a Western Australian company. Despite there being a 10 per cent weighting for local submissions, according to an ABC report a local shipbuilder described the tender process as unfair and not in the best interest of Tasmania’s economy.
Yet another example of the rising prominence of the sustainability agenda is the Indigenous Procurement Policy which requires three per cent of all contracts to be offered to indigenous firms by 2020. And nine months in, the policy has been called a resounding success. During 2013-14, the ATO contracted just $2622 with indigenous firms. This year? The ATO has contracted nearly $27 million as of May.
In fact, according to Nadine Williams, Head of the Department of the Prime Minister and Cabinet’s Indigenous Affairs division, in the first six months of the policy’s operation alone, 250 indigenous businesses had signed over 750 government contracts worth about $91 million.
Clearly, the drive for sustainability is wide-ranging and far more than just talk. It’s a very topical theme and everywhere you look, those that cannot, or will not keep up, are finding themselves under greater scrutiny. The sustainability agenda is becoming increasingly front-of-mind for customers and constituents who are making the point that while price is important, it’s only one part of the procurement equation.
At its core, sustainability relies on a commitment to making more balanced procurement decisions. In turn, these require balanced objectives. And for the rubber to meet the road, balanced objectives have to be operationalised, and be seen to be operationalised.
At a local government level, that’s being achieved through the increased use of electronic procurement systems that incorporate flexible evaluation toolsets. Not only do such toolsets allow sustainable principles to be implemented in a practical manner, importantly, they also provide evidence that no stone is being left unturned to ensure a sustainable approach to local governance.
Online evaluation toolsets allow sustainability criteria and their associated weightings to be pre-determined and incorporated into standardised, tender-specific online response forms, allowing evaluators to compare and score submissions on a criterion-by-criterion basis. They can even separate price from non-price attributes, to ensure that submissions are not evaluated by price alone.
Once tenders are evaluated and awarded, any disputes can be quickly resolved through detailed reports showing the scoring per criterion for each submission, along with any evaluator comments. These same reports also serve a useful audit function, particularly when faced with accusations that weightings may have been changed after the fact in order to favour a particular submission.
Evaluation toolsets inject consistency and rigour into a vital stage of the procurement process while also providing proof points as to how the final outcome was determined. And in the era when there is a seismic shift towards sustainability, it’s exactly these benefits which see their use becoming common practice among procurement professionals determined to meet the expectations of their constituents.
*Copy supplied by Tenderlink