Tenders and green procurement

BT has launched a new green procurement strategy which will require all its suppliers to prove they are making efforts to cut their carbon emissions.

The company claims to be among the first in the UK to introduce such a scheme. All suppliers will now have to create a formal climate change action plan, report their annual CO2 emissions and prove they have set themselves "challenging" emissions reduction targets.

During 2010, BT spent £12 billion with its suppliers, meaning the new scheme is likely to affect a large number of firms.

Liz Cross, BT's policy for procurement manager, said: "This is not something that we're legally obliged to do, but we see this as key to delivering on our commitments on carbon reduction."

She added that while "there is no penalty" for suppliers who do not currently comply with the new rules, "tenders and replacement contracts will take into account the action taken by suppliers to reduce their carbon output".

BT has made high profile strides to promote its commitment to energy efficiency in recent months.

Earlier in the year the company told BusinessGreen it was looking at extending the carbon footprinting model used for its London 2012 services to other corporate customers. ADNFCR-1235-ID-800442692-ADNFCR

Source: Low Carbon Economy

And then!!!
The civil service came under fire over the weekend in one of the most stinging attacks launched by a prime minister.

Speaking of "enemies" and "morals" at the Conservative spring forum in Cardiff, David Cameron promised to take on what he called the "enemies of enterprise" in Whitehall and town halls across Britain.

These enemies, he said were "the bureaucrats in government departments who concoct those ridiculous rules and regulations that make life impossible, particularly for small firms". He also criticised "town hall officials who take for ever with those planning decisions that can be make or break for a business – and the investment and jobs that go with it."

Cameron attacked public sector procurement managers who "think that the answer to everything is a big contract with a big business and who shut out millions of Britain's small- and medium-sized companies from a massive potential market".

The chancellor, George Osborne, also announced the creation of 10 enterprise zones to give small- and medium- sized firms opportunities to bid for large government contracts.

But while Cameron's comments hit on a acknowledged problem within the public sector – namely, a fear of innovation – critics said his speech showed a lack of understanding of the complexity of the procurement process.

"The criticism in main was fair, but his analysis of the reasons why it happens was very simplistic," said Colin Cram, procurement consultant and former director of the North West Centre of Excellence (NWCE).

Cram said: "Procurement managers react to and respond to commissioners so aren't necessarily the key or only decision-makers. There's a great tendency for procurement managers to follow procedures and that provides an alibi, but this goes right through from the people at the top to those at the bottom of the process.

"By and large the public sector isn't entrepreneurial and it goes right through organisations, not just procurement and through contracts and commissioning. Civil servants are used to being criticised by politicians so it will probably be water off a duck's back, but I don't think the rhetoric is fair."

Cram that the presumption that all large contracts were bad and all smaller contracts good was a red herring, and there had been good examples of procurement that could be built on and understood.

"I've seen some great examples of entrepreneurship though, both in big and small-scale contracts," he said. "The outsourcing and management of the social security estate in the 1990s was very entrepreneurial and a lot of public and private organisations have copied that. It was a massive contract. There have also been examples where people have gone right through the supply chain.

"When I was the director at NWCE, covering 47 local authorities, we did a purchase spend analysis and actually found that 66% of contracts were going to SMEs. So if that's typical of local government then it's not because of contract size alone.

Cram added: "And there is a downside. There were suspicions that SMEs were being used precisely because they didn't innovate, but because they actually were doing things the same way. The challenge is to get innovative SMEs business but there's almost a predisposition in the framework against innovation.

"If contracts run for three or four years they tend to be locked out. There are lots of things the public sector could do and how it could behave differently."

The Cabinet Office minister Francis Maude has been focused on scything millions from Whitehall budgets by centralising buying decisions. He echoed Sir Philip Green's review of government procurement last year that addressed the need to "leverage the scale [or procurement] in central government".

So does Cameron's speech, which comes ahead of the budget on 23 March, move along the same grain?

"There is a move towards centralising for commissioning, goods and services, but there is a risk of letting contracts get so big they might mitigate against innovation," said Cram. " We might just end up in a neutral situation.

"I know suppliers offering innovation who are very worried about being driven out. We need a very, very clear mandate from the efficiency and reform group on innovation – not just cost-cutting."

Cameron said the government would be "throwing open the bidding process to every single business in our country – a massive boost for small businesses, because we want them to win at least a quarter of these deals".

John Cridland, director general of the Confederation of British Industry said: "We've got to make sure that the action lives up to the words. They've yet to prove themselves. We're working with them and I hope they will."