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The list of SPAP commitments to be embedded in the SOGE framework is reproduced below in Box 4.3. During 2007 the SDC recommended that the

SOGE targets be formally updated to include specific targets on procurement. At present, there is still

some confusion in departments over the status of the ‘Government to Mandate’ targets listed in the

SOGE framework. At the very least, therefore it must be re-stated that these targets are also mandatory,

not just desirable.

Commitments on sustainable procurement are

not new to the SPAP, however. A number were included in the former SDGE framework, covering: the

development of a sustainable procurement strategy; integrating environmental clauses into contracts for Quick Wins goods and services; and delivering training to raise awareness and competency around sustainable procurements issues for procurement practitioners.

4.5.1 SPAP commitments

Leadership and accountability

Permanent Secretaries are accountable for their department’s overall progress and for ensuring, from 2007/08 onwards, key staff in their departments have performance objectives and incentives that drive the implementation of this plan, linked to performance objectives for delivering efficiency savings.

Budgeting and accounting practice Where responsibility for capital and revenue budgets is divided between different organisations, sponsoring departments will review budgeting arrangements and performance frameworks to ensure any barriers to choosing sustainable solutions are resolved. In addition, where departments believe an upfront cost constraint prevents them from choosing the most sustainable option, they may raise this with the Treasury.

Building capacity

Departments to set out the actions they are taking to ensure procurement practice helps to achieve their sustainable operations targets in their departmental Sustainable Development Action Plans

Government encourages organisations to make full use of the Task Force Flexible Framework where it helps improve procurement practice and achieve sustainability targets while OGC are developing a new detailed procurement framework.

Raising standards

Departments/OGC to take action in respect of central government contracts to meet updated and extended mandatory standards.

Existing contracts will be updated as soon as is practical.

New contracts will be required to meet these standards.

Steps will be taken to remove offers that fall below these standards from framework agreements within 12 months (where permissible under existing contract terms).

Departments will make use of pan-government collaborative contracts in key areas to achieve compliance.

New government contracts, where relevant, will include appropriate requirements for suppliers and sub-contractors to provide products and services that comply with agreed mandatory standards and assist in the delivery of departmental sustainable operations targets.

From 1 April 2009, only timber and timber products originating either from independently verified legal and sustainable sources or from a licensed FLEGT partner will be demanded for use on the government estate - appropriate documentation will be required to prove it. From 1 April 2015, only legal and sustainable timber would be demanded.

OGC will help departments achieve their sustainable operations targets through

supporting the development of pan-government procurement of goods and services, required to meet the sustainable operations targets. Market engagement and capturing innovation

OGC and government departments will work together to strengthen their strategic engagement with key sectors to ensure key suppliers have plans in place to lower their carbon footprint and that of their supply-chains.

Note: The Office of Government Commerce (OGC) is an office of HM Treasury, responsible for improving value for money by driving up standards and capability in procurement. Its Executive Agency, OGCbuying.solutions, provides easy access to more than 500,000 products and services, through a range of frameworks as well as a number of managed services.

Box 4.3

Sustainable Development Commission Sustainable Development in Government 2007 97

Given that the SPAP requirements were not published until the end of the 2006/07 reporting

year, the SDC did not cover all of them in this year’s SDiG assessment, and performance on procurement

has not been included in the calculations of the performance ‘star rating’ for departments.

For this year’s assessment we requested information about selected procurement activities

in departments, notably to indicate the level of outsourcing for operational activities, the inclusion of sustainability clauses in top contracts, and the

application of the Quick Wins and timber mandatory procurement standards.

Two further SPAP requirements were selected by the SDC as key mechanisms for delivering

sustainable operations targets in future, and are

reported in Chapter 6:

• Permanent Secretaries to be accountable for departmental progress by ensuring that key staff have performance related sustainability objectives;

• Departments should be encouraged to engage with the SPTF Flexible Framework.

4.5.2 Progress on sustainable procurement

Operational outsourcing is an important part of the total operations of a government department and can include activities ranging from those expected

across an office based estate such as facilities management, security and IT, through to those more

unique activities such as leasing aircraft for cabinet

ministers, producing coinage, harvesting wood, climate change prediction, defence engineering,

and running prisons. Beyond the large outsourced

contracts there is also significant dispersed procurement activity including office and technical consumables, postal and travel services and one-off

products and services.

Outsourcing presents the risk of placing sustainability issues ‘out of mind’ depending on

the nature of the contract. At the moment, unless activities are carried out on a departments’ site,

they are not likely to be captured in its reported

operational performance. Therefore government needs to ensure that the outsourced functions it is purchasing are delivered in such a way that the sustainable development impacts are fully

considered, managed, minimised and reported on. If not, government can not claim to understand, let alone reduce, its operational impacts. As outsourcing of key activities increases, great care needs to be

taken to ensure that government is not merely shifting the burden of its operational impacts.

Government should also take the opportunity to

learn from its contractors, where there are market

leaders who can contribute innovative and more sustainable services. Two way communication between departments and their key suppliers is

essential if the full benefits of outsourcing are to

be realised.

4.5.3 Embedding sustainability in outsourced operations

Each department was asked to provide basic information on its outsourced operational

contracts relating to the top five in value, facilities management, catering services and IT, and whether

or not these contracts included sustainability clauses (see Tables 4.6 and 4.7).

The inclusion of a clause in a contract is not in

itself sufficient to ensure that outsourced operations

support sustainability objectives. It simply gives some indication of whether sustainability has

been considered in the way in which the products and services will be delivered. The extent to which outsourcing can strategically drive forward

sustainable development, all the way through the supply chain, will depend on the content of these

clauses and whether they are actively managed and developed over the contract period. Anecdotal evidence suggests that this is rarely the case in practice.

Company Service

Sustainability clause

included? Client department

Aspire Defence Facilities Management Yes MOD

Marshall C’brdg Aero Engineering Not reported MOD

Eastbury Park Ltd Construction Not reported MOD

EDS IS/IT Yes DWP

BAE Systems Engineering Not reported MOD

Westland Helicopters Engineering Not reported MOD

LandSecurityTrillium Estate and facilities Yes DWP

Capgemini UK Ltd IT Services Yes HMRC

BT IS/IT Yes DWP

Mapeley Estates Ltd Facilities Management Yes HMRC

Individual contract values are confidential and therefore have not been displayed.

Total value £19.8 billion

Table 4.6 Sustainability in the top 10 valued contracts

Outsourced activity Number of contracts reported Combined value of contracts* Number o f con tr acts con taining a sus tainability clause Value no t co ver ed b y sus tainability clause** % V alue no t co ver ed b y sus tainability clause IT 18 2.3bn 11 97m 4.2% Facilities Management 19 13.3bn 16 13.3m 0.1% Catering 20*** 374.6m 12 362.9m 96.9%

* Some departments did not report the value of their catering contract. ** Total value of the contracts where a sustainability clause is not included. *** HO’s catering contract is included in its Facilities Management contract.

Table 4.7 Sustainability in outsourced IT, facilities management and catering contracts

• Together, departments reported that they have 6389 outsourced contracts in place.

However, in reality this figure will be much higher, as three of the ‘big 5’ departments (DCA, DWP and MOD) did not know the total

number of outsourced contracts they had in place

• The combined value of the 6389 contracts

was reported as £8.7 billion, but this is clearly nowhere near the real value given the figures reported elsewhere. Further, neither LOD or – more significantly – MOD reported the total

value of their outsourced operations

4.5.5 Outsourced operations – analysis

• Taken together, £21.6 billion was spent on

the 98 ‘top five’ contracts. While this is the combined value for the top five contracts reported by each department, these

are not necessarily the top 98 contracts across government. Contract values vary

substantially. As such, one department’s sixth

highest value contract may be of a higher value that another department’s top valued contract

• MOD’s expenditure is significant. All five of its

‘top five contracts’ appeared in the list of ten highest value contracts across government,

with a combined value of £16.7 billion • Of the 123 contracts for which details were

reported (either as a top five supplier or as a contractor providing IT, catering or facilities management services), only 66 (i.e. 53.7%)

included a sustainability clause

• The top ten valued contracts have a combined total value of £19.8 billion. Only six of these are known to include a sustainability clause

• 20 of the 21 departments reported having

outsourced catering contracts, with a

combined value of over £374m (16 reported

the value). Only 12 of these – covering 3.1% of total known spend on catering – were

reported to include a sustainability clause. This is despite sustainable food procurement being a pan-government initiative for a number of years

• 19 of the 21 departments reported having outsourced facilities management (FM)

contracts, with a combined value of £13.3bn. Of these, 16 were reported to include a sustainability clause. These 16 cover 99.9%

of the total value of all FM contracts • 18 of the 21 departments reported having

outsourced IT contracts, with a combined value of £2.3 billion. Of these, 11 were

reported to include a sustainability clause.

95.8% of the total contracts value was

therefore covered by clause.

The ‘Quick Wins’ are a set of mandatory minimum environmental standards for the procurement of

a variety of goods, including IT equipment, white goods, paper and construction materials. The

standards relate to characteristics such as energy

consumption, recycled content, and biodegradability.

The ‘Quick Win’ mandatory standards were introduced

in 2003, and now cover 54 product areas.

In our assessment we asked a number of questions relating to the use of the Quick Win mandatory

standards, the responses to which are shown below in Table 4.8. The specific products selected were

considered to be indicative of compliance with the

Quick Wins, as products that would most likely be procured by all departments, rather than being

singled out as the most important products in terms of impact.