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Procuring and sustaining resources

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Procuring and sustaining resources

  1. 1. Procuring and sustaining resources By / MahmoudShaqria ‫محمود‬‫شقريه‬‫محمد‬
  2. 2. Outlines: 1. Definition of procurement 2. Objective of procurement 3. Principles of sustainable procurement 4. Key concepts in sustainable procurement 5. Benefits of sustainable procurement 6. Sustainability issues in purchasing decisions 7. procurement process 8. How to develop the questionnaire 9. key areas that should be covered 10. HEALTH SECTOR PROCUREMENT STRATEGIES 11. The inclusion of The procurement profile 12. Planning for equipment maintenance and repairs 13. Implementation of procurement Plan
  3. 3.  Principles of sustainable procurement include: 1-adopting strategies to avoid unnecessary consumption and manage demand (this includes the consumption of energy and water) 2-giving consideration to the purchase of goods and infrastructure that can be reused, repaired and recycled, and that include recycled content
  4. 4. 3-minimizing environmental impacts over the life of the goods and services by choosing products or services that have lower adverse impacts associated with any stage in their production, use or disposal 4-fostering innovation in sustainable products and services through the design and implementation of procurements 5-ensuring that fair and ethical sourcing practices are applied and that suppliers are complying with socially responsible practices, including legislative obligations to employees.
  5. 5.  Key concepts in sustainable procurement 1. Value for money: Achieving value for money is the core principle underpinning Australian Government procurement. It should be noted that the price of a good or service is not the sole determining factor in assessing value for money. This means that all relevant financial and non- financial costs and benefits must be considered over the entire life of the procurement.3 Relevant costs and benefits include environmental sustainability.
  6. 6. 2. Sustainable development: This is commonly defined as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’ 3.Sustainability: This depends on maintaining or enhancing the wellbeing of society over time, and therefore requires that the total economic, social and natural capital is maintained or improved for future generations.
  7. 7.  Benefits of sustainable procurement  The benefits of adopting a sustainable procurement approach are numerous. The receiver of the benefits can be the purchaser, the market (or supplier) or the community. Some benefits can apply to all these groups
  8. 8. 1. Benefits to the purchaser can include:  achieving value for money and a more efficient use of public resources  generating financial savings through reduced waste disposal (including reduced packaging to waste); reduced water use; and reusing materials and products, thereby lowering the cost of a product over its life cycle
  9. 9. achieving positive publicity associated with the purchase and use of products, services and suppliers with good environmental and social responsibility records providing government leadership to the community in demonstrating social and environmental responsibility through the purchase of sustainable products and services.
  10. 10. Benefits to the market can include: 1. increasing the availability of sustainable products and services at more cost-effective prices 2. expanding the market for sustainable products and services, with potential benefits for local businesses 3. expanding market opportunities gained from stronger product and service differentiation
  11. 11. 4. reducing transport-related costs such as fuel, vehicle maintenance and road congestion 5.supporting and encouraging innovation through demonstrating preference for more sustainable products and services 6.encouraging industry to develop capacity to operate in a clean, green economy.
  12. 12.  Benefits to the community can include: 1. reducing adverse environmental and social impacts arising from procurement decisions 2. reducing waste going to landfill 3. saving water and reducing greenhouse gas emissions, and reducing air and water pollution 4. reducing consumption of both natural and processed resources
  13. 13. 5. promoting health, safety and equality in the community 6.influencing purchasing decisions to support issues such as recognizing equality and diversity, increasing employment and skills, and developing local communities and their physical infrastructure. 7.Improving social inclusion and cohesion through creating employment and business opportunities for disadvantaged or marginalized groups.
  14. 14.  Sustainability issues in purchasing decisions When considering a purchase, the sustainability issues could include: 1-examining the need for the product or service, to avoid unnecessary consumption and manage demand 2-considering the alternatives to purchasing a replacement product, such as reusing, refurbishing or reconditioning the existing product or its components to extend its life 3-with all factors being equal in the purchase of a product, choosing products that contain recycled content, or products that can be reused, repaired, or recycled at the end of their life
  15. 15. 4-choosing products that minimize adverse environmental and/or social impacts, and that preferably have been accredited with an ecolabel 5-utilizing extended warranties 6- considering the environmental management practices of the supplier/manufacturer .
  16. 16. 7- requiring suppliers to meet their employment obligations under relevant legislation and other related instruments 8- considering the carbon emissions, pollutants, energy and water required at all stages of the life-cycle 9- verifying the social responsibility and ethical behaviour of manufacturers and suppliers of the product 10- reducing the hazardous and toxic material in products.
  17. 17. Sustainable procurement at each stage of the procurement process 1. Identify whether there is a need for the goods or services  Investigate the genuine need for the procurement by asking ‘Do we really need this?’  The key message is that considering sustainability at an early stage of procurement decision- making can identify opportunities to:  avoid or reduce consumption  identify whether there is a more sustainable alternative readily available  rethink and revise specifications in order to improve sustainability outcomes at the concept or design stage of the procurement
  18. 18. 2)Understand the potential environmental and social impacts and risks Consider whether the need could be met in a way that minimizes environmental and social impacts and risks. Where possible, outline the environmental and social impacts and risks of the good or service over its lifetime
  19. 19. 3)Consider alternatives to buying Alternatives to buying, such as reuse, hire or shared goods/services, are part of demand management strategies. Demand management encourages a reduction in the volume of goods purchased, usually through a combination of behaviour change and technology.
  20. 20. • Conduct a risk assessment Conduct a risk assessment based on the environmental and social impacts of the procurement that were identified as part of identifying the business need. The effort directed to risk assessment for sustainability should be commensurate with the scale, scope and identified potential environmental and social impacts of the procurement.
  21. 21. 4)Research alternatives that may offer reduced environmental and social impacts  Consider alternative approaches that may be available in the market, such as reusing or refurbishing existing goods, or hiring or sharing the required goods. .
  22. 22. 5)Define the sustainability aspects in the procurement  Once you have determined the key environmental and social life-cycle impacts to address, you should now be ready to set requirements that would minimise these impacts. However, incorporating sustainability in procurement decisions should be commensurate with the size, complexity and risk of the procurement
  23. 23. 6)Specify environmental and social requirements as minimum or desirable.  Specifications can be provided as either minimum or desirable requirements. .
  24. 24. 7)Focus on the performance requirements  This approach allows suppliers to propose innovative solutions within the environmental and social preferences established.
  25. 25. 8)Plan for inclusion of sustainability requirements in the final contract  At this stage you should also be planning ahead and identifying which sustainability requirements will be included in the final contract with the successful supplier as contract clauses and/or key performance indicators
  26. 26. 9)Considering broader economic benefits  The requirement for officials to assess the economic benefit of procurements valued above $4 million also provides suppliers with further opportunity to describe the environmental benefit of the proposed solution
  27. 27. 10)Request documentation to support sustainability attributes Documentation supporting the claims of the specified sustainability attributes of the goods or services should be sought. Any agreements for the management of packaging and end-of-life take-back of goods should also be incorporated in the contract.
  28. 28. 11)Include reporting areas to ensure delivery of environmental and social specifications  KPIs and reporting requirements for environmental and social requirements determined at an earlier stage in the procurement process should be included in the contract.
  29. 29. 12)Provide debriefings  Debriefings should be provided to unsuccessful tenderers on the areas where they did not meet sustainability criteria. This can assist with increasing knowledge in the marketplace about sustainable procurement and improve future responses to procurement requests.
  30. 30.  Follow up environmental and social performance • Identify areas of continuous improvement 13)Compliance  Through regular meetings and updates, contract managers should follow-up on the environmental and social performance and the progress of the supplier against KPIs and other measures as appropriate. This includes compliance with specifications and standards that were included in the tender to mitigate environmental risks.
  31. 31. 14)Continuous improvement  The contract management process is also an opportunity for the agency to raise any concerns or suggest new areas to improve sustainability performance, as well as for the supplier to bring any ideas for new technologies and goods or services options to the agency. .
  32. 32.  Determine how the goods will be disposed of in the most environmentally preferable way Disposal  At their end of life, goods can be disposed of in a variety of ways, with the least preferable option usually being landfill. Where possible and relevant, the disposal of goods should be considered as part of the procurement planning stage.  A better option is to ensure the goods are recycled
  33. 33. Consider costs that may be associated with the procurement Below is a list of examples of costs that may be associated with any procurement. They should be considered when evaluating competing options. 1. Purchase price 2. Delivery 3. Installation and commissioning 4. Energy and fuel 5. Water 6. Consumables 7. Waste from operation 8. Labour 9. Health and safety 10. Maintenance and repair 11. Decommissioning 12. Disposal
  34. 34. 15)Assessing supplier sustainability performance  This section demonstrates how suppliers and potential suppliers can be assessed on their sustainability performance at both a basic and a more advanced level. The benefits of assessing a supplier’s performance are also outlined.
  35. 35. There are a number ways to check a supplier’s environmental and social management practices, including: 1-asking questions of the supplier, either through a questionnaire or by including questions in your approaches to market 2-verifying environmental or social credentials, for example through certifications 3-setting reporting requirements through contracts. 4-The appropriate level of investigation into a supplier’s environmental and social management depends on the relative size and complexity of the procurement.
  36. 36. Putting it into practice—Using environmental or social certifications as evidence of sustainability performance  Environmental or social certifications can indicate more advanced performance by a supplier. You could ask the supplier if its operations, or the goods or services it provides, are verified to the appropriate certifications. These may be:
  37. 37.  HEALTH SECTOR PROCUREMENT STRATEGIES .1 Procurement should be planned to enable prudent management of budgets and to ensure achievement of best value for public funds. .2 The procuring entities (PE) within the public health sector should aim to acquire medical supplies and services at optimum terms by taking into account the acquisition price, payment terms, product and service quality, availability, supplier support and track record. .
  38. 38. .3 Qualified suppliers shall be given equal opportunity to bid for supply of medical products and services. .4 The highest ethical, professional and legal standards in procurement should always be observed in establishing a mutually beneficial relationship with suppliers and customers
  39. 39. .5 All procurement of medical requirements shall be done through open competitive public bidding unless an alternative procurement method is justified in accordance with the relevant provisions in the Public Procurement and Disposal Act. .6 There should be a continuous improvement of procurement processes by procuring entities to ensure that the processes are simple, efficient and cost effective.
  40. 40. The procurement profile should include, but not be limited to the following information: a) Goods and services purchased and how much was spent on them; b) How goods and services were purchased; c) Current sources of supply and their geographical location; and d) Criticality of the goods and services to the organisation.
  41. 41. Planning for equipment maintenance and repairs .1 In order to take account of costs of ownership, provision should be made in the procurement plan and the budget for maintenance and repairs. .2 The procurement contract may include maintenance with clearly set out service level agreements for a period of time after the expiry of the warranty period. .3 All medical capital equipment should be subject to a preventive maintenance programme as well as provision for repairs to ensure continued operational efficiency of the equipment.
  42. 42. .4 In case an existing procurement contract does not cater for maintenance and servicing, the procuring entity should appraise and register service providers in order to establish in advance that they have proven technical expertise to maintain the equipment. .5 The service providers should preferably be authorized agents for the relevant equipment. .
  43. 43. .6 The procuring entity should plan for disposal and subsequent replacement of such equipment once they have become old and expensive to run or have become technologically obsolete
  44. 44. .7 The Heads of Departments should submit their plans to the Head of the Procurement Unit, who should study and consolidate them and compile a master plan for approval by the Head of the Procuring Entity. .8 The plan should be submitted at least 30 days before the end of the financial year. .9 The procurement plan should be prepared in accordance with the format
  45. 45. Implementation of procurement Plan .1 Unplanned requirements that arise out of unforeseen operational needs or changes to the user’s annual procurement plans should be communicated to the Head of the Procurement Unit immediately such changes occur. .2 Regular reports on implementation of the plan should be prepared by the Procurement Unit. The report is to include compliance or variances, if any, from the plan and the implications of such variances, for remedial action.
  46. 46. 3- As far as practicable any existing suitable substitutes or alternative products should be considered before initiating procurement of products not in the plan.
  47. 47. .4- PEs should be aware that health sector financing at the national level is a shared responsibility that is discussed and agreed upon between Government of Kenya and various Development Partners under various Joint Funding Agreements. Although this may not affect individual PEs at an operational level, it is important to understand the sources of medical supplies. However, efforts are constantly being made at the ministry level to harmonize supply options for medical commodities to PEs where this is applicable.
  48. 48. Thank you….