Stage Three: Specification and Tendering

“A more functional specification leads to better results.”
Michael Plancken. Senior Buyer, UMC Utrecht

 

Aim By the end of this stage you will have: Developed a detailed specification document for your circular procurement proposal. Tendered, evaluated and awarded the contract or pilot project.

Having evaluated the possible alternatives to a ‘business as usual’ procurement approach, the next stage is to procure either a pilot or full procurement through the organisation’s procurement procedures, as governed by EU Procurement Directives and rules.

The important aspect in this stage is to ensure that the specifications capture the requirements of the procurement project and enable resource efficient business model (REBM) solutions to be offered on a value for money basis.

How to guide

Step One

Preparing your specification
The specification forms part of the tender documentation to enable bidders to quote on an equal basis. The nature of the specification e.g. prescriptive or performance based, can influence, intended or otherwise, the outcome significantly.

The Most Economically Advantageous Tender (MEAT) is now the sole award criterion within the new EU Procurement Directives. MEAT includes options for using a cost-effectiveness approach such as life-cycle costing and the best price-quality ratio (BPQR). The BPQR provides the best option for the procuring body to set a proportionate range of sustainability criteria that will encourage the market to offer REBMs and circular products in their bids.

When considering end-of-life, where re-use options are not available, setting requirements for recycled content can encourage market demand for secondary materials and help close product loops e.g. food grade packaging recycled back into food grade packaging.

Having set the appropriate criteria, it is important that the procuring body weights these appropriately. Too many criteria can dilute the influence of scores and too high a weighting on a few e.g. on price, can skew the evaluation.

The Utrecht Medical Centre (UMC) REBus pilot has set a range of criteria based around the:

• understanding of the client and the suppliers’ vision of circularity;
• functional requirement of the furniture being procured; and
• price.

Step Two

Legal tender requirements
The formal tendering stage is strictly governed by EU tendering rules. To create a level playing field for all businesses across Europe, the EU law sets minimum harmonised rules. These rules, transposed into national legislation, apply to the tenders within certain monetary thresholds.

Step Three

Scoping evaluation criteria
Following tendering, evaluation should be carried out in a structured, disciplined and transparent manner. Whole-life costs should be considered including the decommissioning, removal or disposal costs. This should be linked back to the scoring within the MEAT criteria based on the evidence presented for the market solutions offered against the functional specification e.g. in the Netherlands, construction projects such as the A12 Design Build Fund & Maintain (DBFM) monetise CO2 savings as part of the Total Cost of Ownership.

Step Four

Foundations of contract management
Following the award of the tender, both parties need to agree their obligations and key success criteria as part of the agreement. This forms the foundation of good contract management. The agreed terms and conditions help to minimise contractual risks and exposure to risk, especially when considering alternative models to business as usual.

A key part of the contract terms and implementation process should be agreed key performance indicators, monitoring and reporting. These should have clear timescales and parameters set out on both sides, including relevant stakeholder groups to manage the implementation effectively.

 

Learning Circular procurement should be described in functional terms to the market to allow the space for developing solutions. Be realistic with respect to the opportunities available in the current market – developing more circular products and business models is a journey.

Case Study examples

REBus circular procurement examples relevant to this stage include:

• Furniture pilot, UMC Utrecht, the Netherlands
• Design criteria for 50 large lock reconstruction projects. Rijkswaterstaat, the Netherlands

The case studies will be published on the REBus website as soon as they have been completed.