Prioritize
Prioritize

Prioritize

Prioritizing procurement categories

There are many ways to prioritize how to start implementing Open SPP. This may include responding to high-profile environmental issues, market sectors or product groups where green goods and services are readily available, public sector programs where procurers and citizens can see a rationale for the use of green products, or high-profile projects or events where SPP can be piloted to raise awareness and interest, such as sporting events, conferences, and retrofits of prominent government buildings.

Pages 28 to 32 of the World Bank’s GPP Handbook provide a good overview of different approaches to prioritizing product categories. The prioritization tool developed by the United Nations Environmental Programme (UNEP) is a useful resource to carry out this exercise.

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In this section we present the different factors that can be considered when prioritizing procurement categories when implementing SPP.

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Communicating why you have prioritized certain categories.

Although there are many ways to prioritize, is it really important both to engage stakeholders in the prioritization to learn their perspectives and to communicate any decisions made so they can be implemented including through the clear Action Plan that we recommend at the end of the section.

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Consider a list of preliminary procurement categories

The first step to carry out a prioritization exercise is to work with stakeholders to establish the list of categories that are going to be analyzed. These categories should be taken from the official standardized vocabulary that procurement practitioners use in the country to consistently classify contracts. When implementing Open SPP, using a standardized way to classify procurement categories is not only important to find and analyze procurement notices for suppliers and contracting authorities, it is also essential to ensure that the implementation of sustainability policies and practices, as well as the gathering of data for monitoring purposes, is consistent.

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There is no globally adopted system to classify procurement categories, different systems are used around the world. For example, in Europe CPV codes are used, whereas some countries use the United Nations Standard Products and Services Code (UNSPSC). Identifying the classification system in place, and ensuring that Open SPP practices align with existing categories is essential.

Identifying high-impact categories

One logical way of prioritizing procurement categories is to identify those for which the implementation of sustainable practices can have the biggest impact. To do that, you need to know what you are buying and what its impact is.

Gain a data-driven picture of your category and contract spend

To prioritize procurement categories, it is first important to have a clear view of the current category and contract spend. The preliminary procurement categories should be filtered according to:

Value

Value refers to the total spend associated with a procurement category, regardless of the number of contracts associated with it.

Contract frequency

For each procurement category contract frequency should be captured, that is to say the number of contracts associated with a procurement category over a certain period of time.

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The process of gathering this data will depend on the organizational set-up of procurement, whether it is centralized, decentralized, or follows a category-managed approach. Having e-procurement in place will help to facilitate the process; if this is not the case, surveys and questionnaires can be distributed to collect the necessary information.

Evaluate the social, environmental, and economic impact of each category

One of the key factors that you should consider when prioritizing procurement categories is the impact that they have across the environmental, social, and economic sustainability pillars.

Environmental Impact

Each category can be classified according to their impact towards different environmental factors, such as CO2 emissions, air pollution, water pollution, landfill waste, hazardous substances, raw materials, energy consumption, water consumption, and biodiversity effect.

For example, as it can be seen in the section dedicated to specific sectors, the environmental impact of the construction sector is mainly associated with CO2 emissions with a potential impact on raw materials, pollution and biodiversity, whereas the ICT sector is more associated with waste, hazardous substances and raw materials.

Social Impact

Each category can be classified according to the impact it has regarding issues such as community health, occupational safety, or supply chain labor risks. For example, a key concern in construction projects is occupational safety, whereas the purchase of ICT products is strongly associated with labor risks in the supply chain.

Economic Impact

The economic impact of a category will largely depend on the local market offer. To assess the economic impact of a particular category, relevant context data gathered can include the number of local SMEs or local people employed in the sector.

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When assessing the impact of these categories, you should also think about their strategic relevance. This means, for example, that if a country or organization has decided to establish promoting net zero goals as an Open SPP goal, then the categories where the implementation of Open SPP will lead to the reduction of CO2 emissions should be prioritized. Implementing Open SPP in categories with a higher strategic relevance might receive more support from stakeholders, which can result in higher impact.

Considering ease of implementation

As well as identifying which categories can have the biggest impact when implementing Open SPP, you should also consider what existing resources there are that will facilitate implementation.

Identify existing sustainability standards and ecolabels

Certification schemes can help to facilitate the implementation of Open SPP. For example, credible ecolabels can be used to identify already available sustainable options that can be purchased within the identified procurement categories. You can judge the credibility of the scheme by its adoption, governance, auditing and oversight mechanisms.

Availability of developed sustainability standards

Buying more sustainably entails knowing which standards a product, service, or works, should meet to be classified as sustainable. This will inform the requirements you set to compare bids throughout the procurement process. Existing sustainability standards can facilitate this process, as they can be used as a reference to draft these requirements.

  • Existing environmental labels, or “ecolabels” can help you identify environmentally preferable products within a specific product category. For example, in procurement categories, such as ICT, there are well-established ecolabels that facilitate SPP implementation when buying products within this category. For more information on ecolabels, and how they can be used for SPP implementation, see this guide.

  • Existing criteria developed by other countries. For example, many countries in Europe have prioritized the procurement categories included in the European Commission’s Green Public Procurement (GPP) criteria guidance. This guidance provides information on specific criteria that you can set as essential requirements, or award criteria, when procuring, for example, environmentally preferable cleaning products and services. This information facilitates implementation for procurement practitioners. However, remember to check your enabling environment for guidance on how you can introduce these standards to evaluate bids.

Benchmark sustainability requirements against current market capability

An important variable when prioritizing procurement categories is assessing current market capability to comply with sustainability standards. To assess this factor, data can be gathered regarding:

Ecolabels available in the market

One of the variables that can be measured to assess market capability is the number of local companies that sell products accredited by an existing ecolabel. This will help to prioritize the introduction of the criteria associated with the ecolabel for the public purchase of the products it covers. If a national ecolabel exists, products covered by this ecolabel should be prioritized.

Existing sustainable initiatives in the local market

The existence of sustainability initiatives in the local market should also be captured. For example, if the local food industry has created standards regarding organic products, procurement categories associated with the purchase of food can be prioritized, and the criteria introduced should align with existing industry efforts. This information is important to ensure that the introduction of Open SPP practices doesn’t exclude local companies.

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There are different ways to collect information from the market to assess its capability to comply with existing sustainability standards. These methods are similar to the ones that will be implemented when engaging with the market during specific procurement processes, for more information see this section.

Evaluate options to build on sustainability policy work to-date

Existing sustainability policies and regulations should be used as a variable to prioritize procurement areas, favoring those where there is already a framework that enables SPP implementation. These will have been identified as part of the process of analyzing the enabling environment, and can include, for example, regulations regarding the management of toxic waste, or the ratification of some of the core ILO Conventions.

Share and communicate the results of your prioritization exercise

As it has been explained at the start of this section, once it has been decided to focus Open SPP efforts in specific procurement categories, you should openly communicate the reasons that have guided the decision. This can be communicated through an Action Plan, and should be referred to in contracts within the prioritized procurement categories.

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A period for reviewing prioritized procurement categories should be established. For example, if your Action Plan is set to be reviewed on a yearly basis, this would be a good time to assess progress made against goals and targets in selected categories, and reconsider your priority categories.

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Case study

After the approval of its National Green Growth Strategy in 2012, Vietnam applied a prioritization tool to public procurement in 2015 to select product categories where to focus SPP efforts, with the assistance of UNEP.

As the first step of the prioritizing exercise, a list of preliminary procurement categories was created. This list included all the products for which the European Union’s (EU) has developed GPP criteria. A series of factors were taken into account in order to prioritize procurement categories, including the availability of Vietnam’s own national ecolabel Green Label. Then  a scoring methodology was defined: products with no ecolabel were excluded; those which had a national ecolabel were scored with 2 points; and those with an equivalent international ecolabel 1 point.

Using this scoring methodology, four products were selected as focus categories for SPP efforts: office paper, laptops, fluorescent lamps, and LEDs lights.