HMRC Sustainable Procurement Strategy

1. Background

1.1 The Government made a commitment to ensuring a better quality of life for everyone, now and in the future, through its strategy for sustainable development “Securing the Future”, published in March 2005.

The strategy sets out the Government’s approach to tackling the problems of climate change, poverty and environmental degradation through five guiding principles:

  • Living within environmental limits
  • Ensuring a strong, healthy and just society
  • Achieving a sustainable economy
  • Promoting good governance
  • Using sound science responsibly

and four priorities for immediate action:

  • Sustainable Production and Consumption
  • Climate Change and Energy
  • Natural Resource Protection and Environmental Enhancement
  • Sustainable Communities

The strategy requires Government Departments to embed sustainability principles into all activities, and requires procurement to play a prominent role in achieving sustainable development objectives.

Government’s Commitment Sustainable Procurement Group

1.2 In November 2001 the Sustainable Procurement Group (SPG) was established to look at the scope to improve the way in which sustainable development considerations are incorporated into purchasing. Its remit was to consider how Government bodies could carry out the procurement of goods and services in a manner that supports the Government's policy and objectives for sustainable development. The Group’s report was published on 30 October 2003. In Chapter 4.4 it states that:

'Value for money is not an end in itself. Government buys in order to achieve those things which it has set out to do. If Government has resolved to conduct its business in a sustainable manner then there can be no choice other than to conduct its procurement in a sustainable manner'.

The report also states that a risk based approach is essential both at whole of Government and at departmental level. It makes clear that risk assessment (impact, likelihood, etc.) is the key tool to sensible decision-making in incorporating sustainability criteria into any individual procurement.
It concludes that within the policy and legal framework and within the context of achieving value for money, scope and opportunities exist for relevant sustainable development considerations to be taken into account in public procurement.

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Ministerial Statement

1.3 At the same time as the announcement of the SPG report, the Government reaffirmed its commitment to sustainable public procurement. In a Written Statement to the House of Commons, the Chief Secretary to the Treasury and the Secretary of State for Environment, Food and Rural Affairs, stated that: "central Government procurement can and should support sustainable development within the framework of the Government's procurement policy and its overarching aim of achieving value for money, and the EC procurement rules". The Written Statement stated that the Government's "first priority is for environmental procurement to become embedded across the board" in government purchasing.

Minimum environmental standards

1.4 Ministers announced that from 1 November 2003, all central government departments must apply minimum environmental standards in new contracts when purchasing certain types of product, which cover aspects such as energy efficiency, recycled content and biodegradability.
To assist departments in achieving this standard, the SPG identified a number of environmental "Quick Wins". To further support this initiative, OGCbuying.solutions has published on its website a list of "Quick Wins" products and services included in its Framework agreements. The list will be kept under review and its coverage widened over time.

OGC/Defra Joint Note on Environmental Issues in Purchasing

1.5 The new emphasis on environmental standards represents a significant shift in public sector purchasing practice. To assist Government Departments in meeting this aim, the Joint Note on Environmental Issues in Purchasing, which provides guidance to public buyers, has been revised by the Office of Government Commerce and Defra. Published separately from the "Quick Wins" on 30 October 2003, the Joint Note demonstrates, through practical examples, how environmental issues can and should be integrated appropriately into each stage of the procurement process. It makes clear that the Government's policy of achieving value for money in procurement applies to the award stage of procurement processes. It is for Departments to decide what to buy and to set the specification, in the context of their overall objectives and subject to the normal public expenditure tests of need, affordability and cost-effectiveness. It is at this early stage that there is most scope to consider environmental issues.

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Ongoing work

1.6 OGC is also currently working with other departments to prepare guidance on how to take social issues into account during the procurement process. Work is also underway to explore the scope for Government procurement to stimulate the market in environmental technologies.

2. HMRC Sustainable Procurement Policy

2.1 The Government’s procurement policy objective is that “all public procurement of goods and services, including works, is to be based on value for money, having due regard for propriety and regularity”. Value for money is not the lowest price; it is defined as “the optimum combination of whole life cost and quality (or fitness for purpose) to meet the user’s requirement.”
This policy is set out in Government Accounting, Chapter 22.

It is the responsibility of all Government Departments, and their Executive Agencies to apply it. The traditional procurement role within Commercial has been to purchase goods and services required by customers in the business areas at the most economically advantageous cost. In the context of sustainability, Commercial needs to adopt a more proactive approach and actively encourage customers along a sustainable route, for example by influencing the specification and by encouraging the use of recyclable and sustainable materials.

2.2 It is HMRC Procurement Policy to purchase sustainable goods and services wherever possible. All Commercial staff have a responsibility to promote and assist sustainable procurement by working closely with both customers and suppliers.

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3. HMRC Sustainable Procurement Strategy

3.1 This strategy supports the Sustainable Development activity across HMRC, and facilitates the achievement of HMRC and wider Government objectives. The purpose of the strategy is to:

  • Outline the high level context and set out the aim of sustainable procurement activity within HMRC
  • Summarise achievements and progress
  • Set targets for the future

4. HMRC Sustainable Procurement Aim

4.1 HMRC aims to adopt and promote sustainable procurement best practice in order to achieve both value for money and compliance with Public Procurement legislation. To achieve this aim we will:

  • Implement the HMRC sustainable procurement policy across the Commercial Directorate during the transition to a single site
  • Encourage commodity teams to develop specific strategies and targets for the new Commercial Directorate, post transition
  • Ensure that sustainable procurement principles are considered in every commercial decision based on whole life costs
  • Engage with customers at the earliest opportunity to actively encourage best practice in sustainable procurement
  • Raise awareness with suppliers of HMRC’s commitment to sustainable development
  • Work with customers and suppliers to manage sustainable development in the supply chain
  • Include sustainable procurement in the induction process for all new procurement and contract management staff

5. Achievements to date

5.1 An environmental tool was developed jointly between former HMC&E and IR, which enables procurement staff to assess the environmental impact of a particular contract and take appropriate action such as inserting wording in the specification and standard terms. It also incorporates an environmental questionnaire for suppliers.

5.2 HMRC has a series of Guided Learning Packages on sustainable development and sustainable procurement available on the intranet and these form part of the basic training requirement for Commercial staff.

5.3 The Dept. manages a contract for recycled paper for copying and printing that is available throughout Government.

6. HMRC Sustainable Development Targets

  • Raise awareness and embed sustainable procurement across the new Commercial directorate and across HMRC by promoting best practice, guidance and training.
  • Maximise Commercial’s contribution to sustainable development targets.
  • Improved disposal of toner cartridges, mobile phones, CD and stationary
  • Increase the proportion by value of sustainable products / services purchased each year.
  • Increase the percentage of forms and printed material on recycled paper.
  • Increase the percentage of environmentally, fuel efficient vehicles in our fleet
  • Carry out environmental risk assessments of all strategic contracts, major spend, and high risk contracts
  • Develop a policy and procedures for managing sustainable procurement in the supply chain
  • Develop an assurance system for measuring and reporting achievements in sustainable procurement and reporting progress externally
  • Meet the 'Quick Wins' targets. 'Quick Wins'.

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