ANNEX A Case Studies and Examples - Defra, UK

Social and Ethical Sourcing

Criteria for Key Product Groups 50037/D0602/Issue 2

June 2013

Annex A BMT Isis Ltd

ANNEX A

Case Studies and Examples



June 2013

Annex A-i BMT Isis Ltd

Contents Page No.

A1 Case Studies A-3

A1.2 Ministry of Justice (MoJ) - Supply Chain Labour Assurance Control

Processes A-5

A1.3 Welsh Health Supplies - Supply Chain Assurance A-6

A1.4 London Underground - Labour Standards Assurance A-7

A1.5 Department for International Development (DfID) - Supplier

Improvement Programme A-8

A1.6 Home Office/ Remploy (2009) - Supported Businesses A-9

A1.7 RESPIRO Guide on Socially Responsible Procurement of Textiles and

Clothing - Guidance for Public Sector Procurers (2007) A-10

A1.8 Crossrail - Social objectives A-11

A1.9 Transport for London’s Highways Maintenance Contract - Equality

and Diversity A-12

A1.10 The Scottish Government - Community Benefits in Public

Procurement A-14

A1.11 London 2012 – Olympic Delivery Authority (ODA) Objectives (the

following is extracted from the ODA Report) - Social Objectives A-17

A1.12 London Organising Committee of the Olympic and Paralympic Games

- Policy Objectives and ITT A-19

A1.13 National Sustainable Public Procurement Programme (NSPPP) –

Risk Assessment/prioritisation methodology A-19

A1.14 BUFDG (British Universities Finance Directors Group) Commodity

Coding - Social and Ethical Risk Assessment A-19

A1.15 Durham County Council - Targeted Recruitment & Training A-20

A1.16 Church Village Bypass - partnership Between Costain, Rhondda

Cynon Taf Council and Welsh Government - Community Benefits A-21

A1.17 Glasgow Housing Association - Community Benefits A-22

A1.18 PAS 91:2013 Construction related procurement - Pre-qualification

questionnaires A-24

A1.19 Shotts Prison Phase 2 Development - Community Benefits

Requirements A-24

A1.20 Department for Work and Pensions - Land Securities Trillium &

Amaryllis Environmental Services - Example of Commercial Supplier

Delivering Social Outcomes A-25

A1.21 Reuse@Leeds - Leeds University - Reuse Links to Social Benefits A-26

A1.22 London Councils - Sustainable Furniture Disposal Toolkit - Social

objectives A-26

A1.23 London Fire Brigade - furniture disposal and social benefits:

sustainable furniture disposal toolkit tested - Social objectives and

Evaluation A-27



June 2013

Annex A-ii BMT Isis Ltd

A1.24 London 2012 - identifying key social issues through risk assessment

matrix - Social and Ethical Risk Assessment A-28

A1.25 Environment Agency - Wheal Jane Operations & Maintenance

Contract 2010-2020 - Delivering local employment through

procurement A-29

A1.26 APUC Supply Chain Code of Conduct – setting clear policy objectivesA-29

A1.27 National Skills Academy Construction Skills – toolkit for skills and

employment outcomes A-30

A1.28 Olympic Games, Responsible Procurement, Travel Ambassador

uniforms – tender requirements A-30

A1.29 West Midlands Procurement Framework for Jobs and Skills –

Guidance throughout procurement A-31

A1.30 Labour Standards Assurance System - Labour Standards Monitoring

and Improvement A-31



June 2013

Annex A-3 BMT Isis Ltd

A1 Case Studies

A1.1.1 The following case studies represent examples of social and ethical pre-procurement and procurement practice within UK public sector procurement.

A1.1.2 Important - Public sector procurers should ensure the relevance and

proportionality for their particular procurement and obtain legal advice where

necessary. These case studies should be considered given their context and

procurers should determine the suitability or otherwise of adopting similar

practices, given the subject matter of the contract. The case studies are not

presented as examples to be necessarily replicated in particular procurements,

but enable procurers to understand how others have considered such issues

and whether lessons can be learned. The principle of networking and sharing

good practice among procurers is to be encouraged and procurers should

discuss with colleagues, potentially including those represented here, how

social and ethical criteria may be applied in their procurement.

This should be read in conjunction with the main report which include the Legal

Framework: it is recommended that legal advice is taken about the potential for

using social or ethical criteria in any individual procurement process. You

should also ensure that the social and ethical criteria are incorporated is

relevant and proportionate to the subject matter of the contract. This must be decided on a case by case basis, in advance of commencing the procurement.

A1.1.3 The information in these case studies has been provided by key stakeholders

who have been engaged with during the development of this report, or from

the public domain. We are very grateful for information provided, where

relevant.

A1.1.4 Section Error! Reference source not found. ‘Further Examples and

Guidance’, provides more information, guidance and examples on relevant social and ethical issues and mechanisms.

A1.1.5 The following signposting table allows quick reference of case studies in

relation to their focus within the procurement cycle. This also allows efficient

reference from the corresponding procurement stage at Annex B ‘Product Category Matrices – Procurement Criteria’.

A1.1.6 Bold text within this document allows the reader to relate particular areas of text to the procurement process.

A1.1.7 The following colour coding (used within Table A.1) relates to particular product

categories. However, please note that where category focus can be useful, the

mechanisms presented can often be applied to other product categories beyond the original case study procurement scope:

- Textiles;

- Food;

- Building and construction;

- General;

- Furniture.



June 2013


Table A.1 - Signposting Procurement Stage

Pre-

procurement

Advertising Specification PQQ Tender /

Evaluation

Contract

Performance

A1.2

A1.3

A1.4

A1.5

A1.6

A1.7

A1.8

A1.9

A1.10

A1.11

A1.12

A1.13

A1.14

A1.15

A1.16

A1.17

A1.18

A1.19

A1.20

A1.21

A1.22

A1.23

A1.24

A1.25

A1.26

A1.27

A1.28

A1.29

A1.30



June 2013


A1.2 Ministry of Justice (MoJ) - Supply Chain Labour Assurance Control Processes

A1.2.1 Background: supply of uniforms, anti-slipwear and textile products since 2007.

A1.2.2 Setting policy objectives - labour standards assurance

The Ministry of Justice (MoJ) emphasised the importance of labour standards

and demonstrated a clear commitment: ‘The Supplier shall acknowledge that,

as a Government department, the Authority has a duty to ensure the integrity of its supply chain in accordance with the highest social and ethical standards’.

A1.2.3 Subject Matter of the Contract - labour standards assurance

Based on the MoJ policy objectives notice was given to the market describing these objectives and the nature of two contracts:

‘The provision of a managed service to supply officers' uniform and anti-slip

footwear through professionally controlled and ethical supply chains’;

‘The economical supply of clothing, textiles and textile products through

professionally controlled and ethical supply chains. (This contract supplies raw

textile materials to prison industries to manufacture prisoner clothing and

bedding)’.

A1.2.4 Contract conditions and management - labour standards assurance

These examples used a standard set of Corporate Social Responsibility (CSR)

control policies that have been developed and defined since 2007, when the Authority signed the first contract directly with a Chinese company.

It is the responsibility of the Supplier to control CSR and the Procurement

Directorate will continue to obligate the supplier to commission 3rd party

audits on MoJ’s behalf.

Each control process is tailored to the contract, the supplier and the

commodity. For example, the procedures followed to control the CSR aspect of

supply chains of the above 2 MoJ textiles contracts vary significantly as they are both targeting different tiers of a textile supply chain.

Through a Supply Chain Entities Disclosure form the Contractor should ‘provide

and monitor details of supply chain; names of suppliers, in supply chain, their

role, changes in last 12 months, and numbers that have been assessed within

previous 12 months in accordance with an appropriate standard, such as ETI

Base Code, SEDEX or equivalent’, the aim being to provide transparency

throughout the life of the contract. ‘It is essential that the Supplier does not

remove any entities from their supply chain. If a supplier no longer features in

the supply chain then the Contractor should stipulate ‘INACTIVE’ along with the

date that they became inactive in the category field of the form’.

A1.2.5 This focus on supply chain transparency through the Supply Chain Entities

Disclosure form also requires ‘Tier 1 supplier internal and independent audit of

the whole supply chain evidencing that it is operating according to ETI Base

Code, Worldwide Responsible Apparel Production, Sedex, SA8000 or

equivalent’.



June 2013


A1.3 Welsh Health Supplies - Supply Chain Assurance

A1.3.1 Background: In May 2009, the All Wales Nurses’ and Midwives’ Uniforms

Procurement Project Board was formed to provide leadership for a new

contract tender for an estimated 150,000 uniforms. The management and

coordination of the procurement contract was carried out by Welsh Health Supplies (WHS) on behalf of NHS Wales.

A1.3.2 Setting policy objectives - labour standards assurance

‘WHS recognises the important role it plays in supporting the Welsh Assembly

and UK Government sustainability agendas. It has developed a CSR policy which outlines its responsibility in twelve areas, including ethical procurement’.

A1.3.3 Pre-procurement - mapping supply chain - labour standards assurance

As a part of WHS’ approach to sustainable procurement, all contracts valued

over £25k are required to include a sustainability risk assessment. As a result,

a number of key issues were highlighted, including labour issues associated

within the uniforms supply chain.

As a further step, WHS mapped the supply chain for uniforms from

fabric manufacture through the dying process and garment production. This

mapping demonstrated that poor labour standards were a risk beyond the first tier, right down the supply chain.

A1.3.4 Contract requirements - labour standards assurance

The outcome of a competitive dialogue process was to include a requirement in

the contract for the whole supply chain to be compliant with the Ethical Trading Initiative (ETI) Base Code, or equivalent.

The contract also required a labour standards audit to have been conducted

within the last 6 months at each supplier’s site throughout the supply chain;

including the textile manufacturer, dye house, garment manufacturer and

warehousing.

Additionally, details of the most recent corrective action report were required.

If an audit was not available, the supplier was required to pay for an audit to be undertaken by WHS’ approved partner.

WHS worked with High Street Textiles Testing Services (HSTTS), a qualified

audit body, to review the documentation provided by potential suppliers.

HSTTS provided advice on non-compliances and closeout of issues identified in the audits.

The intention of this approach was to incorporate the requirement for ETI Base

Code compliance in the conditions of contract. This allowed WHS to agree, with

the supplier, reasonable timescales to achieve compliance and ensured that

action would be taken throughout the supply chain.

A1.3.5 Contract conditions – labour standards assurance

In December 2009, a contractor was selected for the manufacture of the

uniforms. WHS requested social audits from all sites, including fabric

manufacturing, production and dyeing. Sites without an audit were asked to

commission one immediately. Whilst no major issues were raised, HSTTS

continued to provide on-going support on corrective actions and closing out issues identified by these audits.



June 2013


A1.3.6 Lessons: impacts and outcomes:

WHS believes that the inclusion of compliance with the ETI Base Code as a

contractual obligation added minimal cost to the procurement process, as these

costs were borne by the successful contractor. Whilst the entire procurement

process was time consuming, with two people working full time for six months,

the inclusion of the assessment of the bidders against the ETI Base Code added very little extra time to the process.

Advertising: The supplier engagement process highlighted that although

suppliers understood the importance of labour standards, they did not

necessarily understand detail relating to labour standards.

A1.4 London Underground - Labour Standards Assurance

A1.4.1 Background: the supply of uniforms for London Underground staff.

A1.4.2 Policy objectives - labour standards assurance

As the world’s oldest and most famous underground railway system, London

Underground recognised that its reputation was a key consideration and stated

that: ‘We like to reassure our workforce that the garments they are wearing

have been made by workers who have been treated fairly, no matter what country they were made in.’

A1.4.3 Tender / evaluation:

As a result, those tendering were asked to explain how they monitored labour

standards within their overseas factories. The response was varied with some suppliers refusing even to provide details of the factories they used.

Other suppliers asked which standards London Underground wished to judge

them by. Eventually it was decided that the Ethical Trading Initiative’s Base

Code was the most appropriate standard for London Underground, both as a

measuring rod to gauge future suppliers as well as a way of demonstrating commitment to ethical sourcing.


At the time of the ITT in 2007 most of the suppliers embraced the requirements – especially those who also supply the retail sector.

London Underground’s procurement manager stated: ‘We are seeing that those

companies that can adapt to an ethical sourcing policy are also more likely to

be the best in category as regards production. They are also more likely to have better quality control procedures and be less likely to cut corners.’



June 2013


A1.5 Department for International Development (DfID) - Supplier Improvement Programme

A1.5.1 Policy objective: Improving suppliers

A1.5.2 The DfID Responsible and Accountable Garment Sector (RAGS1) Challenge

Fund has supported projects in Bangladesh, India, Lesotho and Nepal aimed at

improving conditions of vulnerable workers in the ready-made garment (RMG)

production sector. The aim of RAGS is to make responsible and ethical

production the norm in the garment manufacturing sector supplying the UK. The seven key areas of intervention that RAGS funds are as follows:

Building skills in garment production management;

Adopting better people management skills;

Harmonising codes and audit requirements;

Building awareness of workers’ rights and the capacity to enforce them;

Strengthening local audit capacity;

Capacity building and reach on fair trade principles;

Development of training tools to assist replication and expansion of

effective approaches.

A1.5.3 RAGS grants matching funds to non-governmental organisations, both for-

profit and not-for-profit, associated with labour conditions in the garment

sector in poorer African and Asian countries supplying the UK market. This

includes private businesses, trade unions and members of both ethical and fair

trade movements. RAGS does not work with procuring organisations in the UK

public sector nor support projects aimed at improving working conditions in

raw materials and fibre production, the wider textiles sector, footwear and accessories, and leather goods other than clothing.


Although it’s main focus is on suppliers who supply the retail sector, in reality

they may be in the same supply chain as those who supply the public sector.

This Programme highlights the importance of working with suppliers to improve

labour standards, rather than prohibiting them from supplying if they are unable to meet initial labour standards assurance requirements.

Lessons from the RAGS project will be shared with procuring organisations.

While the retail sector inevitably follows fashion and seasonal changes, with

suppliers having to respond quickly, the public sector has the advantage of

being more certain in its procurement requirements - in theory they could plan

well ahead to ensure that they and suppliers understand key issues and

opportunities.

As a result, central or collaborative procurement of uniforms, early dialogue

with suppliers, early risk assessment and clarification of requirements will help

the process.

1 http://old.dfid.gov.uk/Work-with-us/Funding-opportunities/Business/Responsible-and-

Accountable-Garment-Sector-RAGS-Challenge-Fund-/Project-Monitoring-and-Impact-

Measurement/

http://old.dfid.gov.uk/Work-with-us/Funding-opportunities/Business/Responsible-and-Accountable-Garment-Sector-RAGS-Challenge-Fund-/Project-Monitoring-and-Impact-Measurement/





June 2013


A1.6 Home Office/ Remploy (2009) - Supported Businesses

A1.6.1 Background: The Home Office commercial directorate championed the use of

supported businesses, third-sector suppliers and small to medium-sized enterprises as an organisational objective.

In May 2009, companies were invited to promote their service offerings to the

Home Office collaborative commercial board. This is a group that includes the

commercial directors from each of the Home Office business areas. The

purpose of the event was to develop and encourage opportunities across the

organisation by supporting the benefits that can be derived from working with

these businesses, which include innovation, reliability, value for money and benefits to the wider community.

A1.6.2 Subject Matter: Supported businesses

While it is often an assumption that, in order to accommodate supported

business, such as Remploy, the clause under Article 19 of the public sector

procurement directive, which allows organisations to restrict bidding on certain contracts to supported businesses, must be used.

Although this is indeed a viable sourcing solution, Remploy in this case was

able to compete on its own merits and won a multi-million pound tender with

the Home Office in which the organisation competed against recognised global

competitors through a full OJEU competitive process. After extensive scientific

testing, Remploy's protective clothing products were found to be the best

suited to meet the Home Office business needs.


The procurement activity between the Home Office and Remploy resulted in a

number of benefits. While working in collaboration with a supported business

helped fulfil social responsibilities and bring wider benefits to society, Remploy

was selected primarily for its ability, competency and value for money. In this

case Remploy eradicated the notion of having to rely on being a supported

business or third sector supplier to win business by tailoring its capabilities

around the requirements of the department and delivering competitive value for money.

A1.6.4 The use of Supported Business Frameworks remains potentially relevant

although at the time of writing this report some have expired. Public sector

procurers may also seek the delivery of social objectives by encouraging social enterprises in the relevant supply chain, for example as sub-contractors.



June 2013


A1.7 RESPIRO Guide on Socially Responsible Procurement of Textiles and Clothing - Guidance for Public Sector

Procurers (2007)

A1.7.1 Background: The RESPIRO guide provides guidance for EU public sector

procurers of Textiles and Clothing, produced by ICLEI2 (Local Governments for Sustainability). This includes a staged approach to the procurement:

Carrying out a needs assessment - what are you looking for?

Analysis of the market - readiness of the market to meet social

sustainability requirements;

Develop a comprehensive social sustainability strategy and policy in

order to legitimize social criteria inclusion in the procurement;

Engage with relevant stakeholders and so obtain useful input into the

procurement.

A1.7.2 Procurement process guidance and specifications: labour standards assurance

A1.7.3 It also includes guidance for each stage of the procurement process, such as at

specification stage as detailed below, with an emphasis on ‘decent working conditions’.

2 http://www.respiro-project.eu/en/respiro-guides/

http://www.respiro-project.eu/en/respiro-guides/



June 2013


A1.8 Crossrail - Social objectives

A1.8.1 Background: Crossrail is the biggest engineering project in Europe and forms

a major part of the Mayor of London’s Transport Strategy. It will connect 37

stations, including Heathrow airport and Maidenhead in the west with Canary Wharf, Abbey Wood and Shenfield in the east.

A1.8.2 Policy objectives “Crossrail have adopted the Responsible Procurement

requirements from Greater London Authority and embedded the requirements

into our contracts. We seek a sustainable approach to all aspects of the

project lifecycle, optimising opportunities wherever practicable to facilitate economic growth, environmental protection and social progress.”

As part of the agreement to build, Crossrail was to ensure a lasting legacy of skills and employment and community benefits.

A1.8.3 Policy: The Crossrail Responsible Procurement Policy sets out commitment in

the following key themes:

Encouraging a diverse base of suppliers

Promoting fair employment practices

Promoting workforce welfare

Meeting strategic labour needs and enabling training opportunities

Community benefits



June 2013


Ethical sourcing practices

A1.8.4 Contract Conditions: Several of the relevant themes form part of the Crossrail Act which requires Crossrail to deliver on:

Fair Employment - covers employment aspects such as London Living Wage;

Supplier Diversity - requires the supply chain to facilitate equal subcontracting

opportunity for all sizes and forms of business to work on Crossrail;

Skills & Employment – The Mayor of London was keen to ensure that such a

project affords the opportunity for apprentices and trainees to gain valuable

and real life working experience. (As a rule of thumb, every £3m contract

requires at least 1 apprentice or a pro-rata training opportunity and Crossrail

has made a firm commitment to provide opportunities to 400 apprentices as a

minimum and to work with Crossrail for at least 16 weeks);

Ethical Sourcing requires that contractors ensure compliance with the 9 points

of the base code formulated by the Ethical Trading Initiative (ETI);

Workforce Welfare addresses the fair treatment of workers covering issues

such as collective bargaining.

A1.9 Transport for London’s Highways Maintenance Contract - Equality and Diversity

A1.9.1 Background: Transport for London’s (TfL’s) Highways Maintenance contract

was awarded in April 2007. Surface Transport led the procurement activity and

along with TfL’s equality team were instrumental in pioneering an innovative

approach to responsible procurement, including consideration of equalities and diversity issues.

A1.9.2 Tender/evaluation: equality and diversity action plan

As part of the tender process each supplier was asked to submit an equality

and diversity action plan, which contained plans on 4 key issues including:

Equality Policy outlining equality objectives and how these will be achieved

over the duration of the Contract and how they will be implemented by

Subcontractors;

A Diversity Training Plan outlining how Employees and Contractors would

be trained in diversity issues relating to the delivery of the Contract;

A Supplier Diversity Plan outlining the bidders prospects for optimising the

participation of diverse suppliers, including details of how this will be

encouraged and measured;

A Communication Plan outlining the approach to managing external

relations and communications with the local communities and relevant

stakeholders who were directly affected by the contract.

To ensure the best possible outcome from the process and to develop good

relationships TfL worked closely with the suppliers to provide relevant support

and guidance. This took the form of initial briefing, submission of draft plan,

which was followed by feedback, and then final submission of plans. The plans

were required to be SMART and the evaluation focused on actions that would achieve measurable outcomes.

A1.9.3 Contract Management: Learning was taken from the engagement process

and the successful contractors then worked to a specified framework. This framework required suppliers to identify the following:



June 2013


Equality & Diversity (E&D) objectives for each aspect of the plan;

Their baseline/current position in relation to the objective;

Actions to be taken to secure achievement of objective;

Timeframe for the action to be taken;

Person responsible for the action;

Resource required to support the action being progressed; and

The measures of success.


Since the contract was let in 2007 there have been some significant achievements including:

Contractors now have E&D monitoring systems in place;

Contractors now understand their baseline position;

Contractors now understand the relevance of targets and are now

setting appropriate targets;

Contractors are investing in additional resources to ensure that they are

able to deliver to the E&D agenda;

Contractors are champions of the E&D agenda with other authorities and

to the rest of the industry;

Contractors are running and attending meet the buyer events targeting

SME suppliers;

Contractors are pro-actively approaching TfL for support and assistance

to develop their approaches to E&D.

For example, one of the contractors Accord as a result of the emphasis of E&D

consideration in the contract appointed a full time Equality and Diversity Officer

who is responsible for their policy, core values, collecting monitoring information, training and recruitment from the local community.

In addition, all three contractors Accord, Amey and Ringway along with others

in the industry have set up an E&D forum to share experiences of E&D

practices and to constantly challenge each other to improve their E&D

practices. This has been as a direct result of TfL’s innovative approach to responsible procurement.

Amey’s Managing Director for Local Government, Nick Sharman said: “The TfL

North Area contract really focused our minds on delivering a sustainable

service, minimising the impact of works on the local environment and engaging

with the local community. As a result we now go beyond the requirements of

the original contract and are undertaking a range of environmental and

community initiatives. We are also encouraging and supporting our supply

chain to do the same.”



June 2013


A1.10 The Scottish Government - Community Benefits in Public

Procurement3

A1.10.1 Background: The purpose of this note is to provide guidance on the use of

‘community benefits’ in public sector procurement. The note draws on the

findings of the Scottish Government’s pilot Community Benefits in Procurement

(CBIP) Programme, which focused on a pilot within construction related procurement projects.

‘Community Benefits’ in this context are contractual requirements which deliver

a wider social benefit in addition to the core purpose of the contract. In

particular, requirements in relation to targeted training and employment

outcomes.

A1.10.2 Specification: Community benefits programme

It has become clear over recent years that there is scope within the EU legal

framework which applies to public contracts, to use contracts to deliver wider

social benefits. However, notwithstanding the legal possibilities, there are

significant practical and value for money issues around adopting this approach.

The background for these type of programmes can be found in the following report; Achieving Community Benefits through Contracts4

The Scottish Government established a pilot programme to examine these

issues in a practical context (the ‘CBIP Programme’). The pilot programme

commenced in 2003 and included participation in pilot contracts by five

authorities: Glasgow Housing Association, Raploch Urban Regeneration Company, Inverclyde Council, Dundee City Council and Falkirk Council.

In addition to the targeted training and recruitment requirements, the pilot

projects involved the procurement of a wide range of works and services on

varying scales. The Community Benefits in Procurement Report summarises

the pilot projects and analyses the use of community benefit clauses and the

effectiveness of the procurement process in obtaining a contractor that is

committed to delivering the required community benefits. The report also

describes the supply-side initiatives (e.g. training and recruitment services)

that were needed to help contractors deliver their obligations under the various

contracts. Also included are recommended model clauses to assist public

bodies in recruitment and training matters in their contracting processes. The

full Community Benefits in Procurement Report was published on 19th

February 2008 and is available on the Scottish Procurement Directorate’s5 website.

A1.10.3 This note is not a comprehensive guide to the use of community benefit

clauses; it is intended to provide an overview of the legal and practical issues.

Those considering including community benefit clauses in contracts are advised to take appropriate legal advice.

A1.10.4 The CBIP Programme focused on one area – targeted recruitment and training

– where there is scope for incorporation of community benefit clauses in public

sector contracts.

3 http://www.scotland.gov.uk/Publications/2008/02/13140629/0

4 http://www.jrf.org.uk/publications/achieving-community-benefits-through-contracts-

law-policy-and-practice

5 http://www.scotland.gov.uk/Publications/2006/05/spdpolicymanual

http://www.scotland.gov.uk/Publications/2008/02/13140629/0

http://www.jrf.org.uk/publications/achieving-community-benefits-through-contracts-law-policy-and-practice

http://www.jrf.org.uk/publications/achieving-community-benefits-through-contracts-law-policy-and-practice

http://www.scotland.gov.uk/Publications/2006/05/spdpolicymanual



June 2013


A1.10.5 Policy, rationale and organisational objectives:

The priority for all public procurement is to achieve Value for Money (VfM).

Value for money does not, however, mean ‘lowest price’. It is defined in the

Scottish Public Finance Manual 2 as “the optimum combination of whole life

cost and quality to meet the end user’s requirement”. The CBIP Programme

sought to examine the inclusion of community benefits clauses in contracts in a way which also achieved value for money.

At a national level, the importance of linking regeneration spend to

opportunities for disadvantaged communities is clearly stated in the Scottish

Government’s Regeneration Policy Statement. At a local level, many

Community Planning Partnerships have adopted policies to address social exclusion.

The Review of Public Procurement in Scotland recommended that the Scottish

Government should prepare and issue guidance on Corporate Social

Responsibility. The Scottish Procurement Directorate has published guidance on Social Issues in Public Procurement6 in line with this requirement.

A1.10.6 Summary of key lessons:

Legality: Community benefit clauses need to be carefully considered to ensure

that they meet the requirements of the EU procurement rules and general EU

law. In particular, care should be taken to ensure that clauses do not cause

either direct or indirect discrimination. Contracting authorities must have a

legal and policy basis for incorporating community benefit requirements in their procurement processes.

Clarity and commitment:

Subject Matter: It is essential that all involved have a full understanding of

community benefit clauses. A team or group dedicated to the project is

advantageous and, where possible, should involve those with previous experience of targeted recruitment and training clauses.

Procurement Officers should undertake an analysis of the labour content of the

contract. Professionals from the field of employment and training can also

provide invaluable advice on community benefits clauses. This ensures that the

clauses are given robust consideration in the tender documents and forces

providers to seriously consider how they will implement and report on the requirements.

Bids should be compared in a standardised format and community benefit

clauses judged solely on objective and measurable outcomes. Once in place,

the monitoring of deliverables needs to be robust with clearly defined detail.

Limitations

The following considerations should be borne in mind with relation to use of community benefits clauses in contracts:

a) Check legal and subsequently policy justifications;

b) All procurement of goods and services should achieve Value for Money,

having due regard to propriety and regularity (the cost of incorporating

community benefit clauses will vary with the requirements);

c) Contract suitability and capacity need to be addressed on a case-by-

case basis;

6 http://www.scotland.gov.uk/Resource/Doc/116601/0053331.pdf

http://www.scotland.gov.uk/Resource/Doc/116601/0053331.pdf



June 2013


d) Key components which together indicate the appropriate targeted

recruitment and training (TR&T) clauses which can be used in a

particular case must be linked. Such components include employment

planning, industry capacity, funding, as well as possible routeways for

employment support and training providers to facilitate achievement of

TR&T clauses;

e) Responsibility for the whole process, including implementation and

monitoring, needs to be clearly set in advance;

f) Community benefit clauses must be mentioned in any OJEU notice by a

contracting authority and throughout the procurement process;

g) Community benefit clauses need to have a direct link to the core

purpose of the contract, in order that they can be included in the

technical assessment of potential contractors and in award of the

contract;

h) To avoid any form of discrimination, including indirect discrimination,

the wording of community benefit clauses needs to emphasise ‘social

inclusion characteristics’ and cannot be aimed specifically at employing

people from a certain locality, of a certain age or sex, etc. Targeted

training is permissible;

i) Indirect discrimination, to the disadvantage of non-local contractors,

must be avoided;

j) Monitoring of contract deliverables and outcomes to ensure compliance.

A1.10.7 Subject matter, Advertising: When use of Community Benefit Clauses can be appropriate

Market factors contributing to compliance with TR&T clauses, such as

beneficiaries, training, funding and the supply of trainees and recruits all need

to be aligned. In addition:

a) The mere act of considering the possibility of inclusion of a Community

Benefit clause can encourage authorities to rethink strategies and

encourage a more innovative approach to implementing these strategies

across the organisation;

b) Successful community benefit programmes can lead to the permanent

employment of formerly non-working people leading to a positive cycle

of experiences for these people;

c) Community benefit clauses can enhance the regeneration of deprived areas.



June 2013


A1.11 London 2012 – Olympic Delivery Authority (ODA) Objectives (the following is extracted from the ODA

Report) - Social Objectives7

A1.11.1 Background: The ODA has worked with LOCOG on communication and

consultation with communities neighbouring the Olympic Park and other

venues. This ongoing programme supports active local participation in the regeneration of the area.

Table A.2 below highlights the relevant social objectives and commitments

(and status as set out in the ODA Report):

Table A.2 - Progress for London 2012

Commitment Status

Promote supplier diversity and maximise opportunities for local

and UK minority-owned businesses and social enterprises to

benefit

On track

Inspire, engage and involve people and communities round the

Olympic Park in developing legacy plans:

On track

Create excellent architecture and urban design, based on

inclusive design principles, in the Olympic Park

On track

Recruit and develop a diverse workforce and ensure that

opportunity and training are available to all

On track

Promote sustainable employment opportunities and boost skills

levels locally and across the UK

On track

Bring opportunities for under-represented groups in the

construction industry, including women, BAME and disabled

people

On track

Deliver a construction workforce of which at least 10–15% are

residents from the five Host Boroughs

Exceeding

Ensure at least 7% of the construction workforce is made up of

people previously unemployed before working on London 2012

Exceeding

Place at least 2,250 people into construction traineeships,

apprenticeships and work placements (up to 2012)

Exceeding

Encourage contractors to pay the London Living Wage On track

The ODA also sought to use design to eliminate health and safety risks

associated with the construction, maintenance and use of the Olympic Park and

venues. It also looks to enhance the health of those working on the site now, and those using the facilities in the future.

7

http://www.london2012.com/mm%5CDocument%5CPublications%5CSustainability%5C0

1%5C24%5C09%5C14%5Clondon-2012-sustainability-report-a-blueprint-for-change.pdf

http://www.london2012.com/mm%5CDocument%5CPublications%5CSustainability%5C01%5C24%5C09%5C14%5Clondon-2012-sustainability-report-a-blueprint-for-change.pdf

http://www.london2012.com/mm%5CDocument%5CPublications%5CSustainability%5C01%5C24%5C09%5C14%5Clondon-2012-sustainability-report-a-blueprint-for-change.pdf



June 2013


A1.11.2 Advertising: Contractors and suppliers engagement

The ODA held a series of ‘meet-the-buyer’ events, putting local and UK

minority-owned businesses in contact with Tier 1 contractors. For the SMEs,

this increased their understanding of potential buyers’ requirements, while the

Tier 1 contractors were encouraged to register business opportunities on ‘CompeteFor’.


At the end of December 2010, there were 6,499 people working on the

Olympic Park and 5,381 people working on the Athletes’ Village.

A total of 222 women have received help in finding employment through

the ODA’s Women into Construction project.

75% of the previously unemployed people placed into work since April

2008 are from the five Host Boroughs.

Overall, 3,259 training interventions have been provided through the

ODA’s National Skills Academy for Construction.

In total, 408 apprentices have worked for the ODA on the construction

programme.

A1.11.4 The London Living Wage (Note: LLW is not a mandatory contract

condition for public sector.)

The ODA encourages contractors to implement the London Living Wage (LLW).

Of those who responded to a voluntary question, 82% of the Olympic Park

workforce said that they receive the London Living Wage. 8% indicated that

they were not and 10% preferred not to say. In the Athletes’ Village, 60% of

the workforce declared themselves as earning the London Living Wage, 8%

stated they did not and 32% preferred not to say. The London Living Wage (LLW) is £7.85 per hour from June 2010, and £7.60 per hour in 2009.

A1.11.5 Diversity and equality:

The ODA introduced a work placement initiative as part of the Women into

Construction Project which offers newly qualified women an opportunity to gain

experience of working on-site. A total of 47 women have done work

placements, of which 16 were students, and of the remaining 31 women, 87%

gained full-time employment at the end of the placement. By the end of

December 2010, 222 women had been brokered into employment on the

Olympic Park, 401 had received training in construction, and 601 had benefited

from employment support as part of this programme. In 2010, Opportunity

Now, part of Business in the Community, recognised the ODA’s gender equality

programme with the Innovation Award. Opportunity Now praised the fact that

women working on the Olympic Park were empowered and supported to use their skills to further develop their careers.

A1.11.6 Skills and training:

The London 2012 Apprenticeship Programme has exceeded its target. It has

now had 408 apprentices who have experienced working on the construction

programme. The ODA is the first initiative of its kind to be awarded National Skills Academy for Construction (NSAfC) status.

http://www.competeforlondon.co.uk/

http://www.bitcdiversity.org.uk/about_us/opportunity_now.html


http://www.bitc.org.uk/




June 2013


A1.12 London Organising Committee of the Olympic and

Paralympic Games - Policy Objectives and ITT

A1.12.1 Background: The bid for the London Olympics made a commitment to host

the world’s first truly sustainable Olympic and Paralympic Games. The London

Organising Committee of the Olympic and Paralympic Games Ltd (LOCOG) has

identified the most effective way to support this commitment was to embed sustainability within the procurement process from the start.

A1.12.2 Tender/evaluation requirements:

The LOCOG ‘Invitation to Tender (ITT) for the provision of goods and

services’ sets out a clear vision and objectives for suppliers: ‘LOCOG will place

a high priority on environmental, social and ethical issues when procuring the

goods and services needed for the Games’ and refers them to the Sustainable Sourcing Code8 for guidance.

In terms of construction LOCOG procurement focuses on temporary structures

and ‘overlay’ for venues to make them Games-ready. Examples of

sustainability requirements include sourcing of materials, timber and timber

products in line with LOCOG policies and compliance with labour practices,

diversity and inclusion requirements. For example, all timber and timber

products must be from a known origin with credible evidence of legal

harvesting and FSC or PEFC certification (NB Central government bodies are

required to comply with the UK Timber Procurement Policy, the requirements

of which differ from this). Targets have also been set to ensure 20% of

materials purchased by LOCOG for venues, by value, are from recycled or

secondary sources. Additionally there is a target for 90% of materials, by

weight, arising from installation and deconstruction of temporary structures and overlay to be reused or recycled.

A1.13 National Sustainable Public Procurement Programme

(NSPPP) – Risk Assessment/prioritisation methodology

A1.13.1 The NSPPP prioritisation methodology9 is a tool available to all public

sector procurers to identify categories and sub-categories of procurement

where social and ethical issues are significant and where these issues they may

be addressed in the procurement process. It is therefore a strategic planning

tool.

Other methodologies have been developed that have a category or sector

specific focus. As with the NSPPP any prioritisation methodology must be relevant for your organisation and may be tailored to suit.

A1.14 BUFDG (British Universities Finance Directors Group)

Commodity Coding - Social and Ethical Risk Assessment

A1.14.1 Background: identifying the relevance and significance of social and ethical

issues for products and services is an essential step, supporting organisational policy objectives.

8 http://www.london2012.com/documents/locog-publications/sustainable-sourcing-

code.pdf

9 http://sd.defra.gov.uk/advice/public/nsppp/prioritisation-tool/

http://www.london2012.com/documents/locog-publications/sustainable-sourcing-code.pdf


http://sd.defra.gov.uk/advice/public/nsppp/prioritisation-tool/



June 2013


A1.14.2 An example of sector or category specific methodologies include the BUFDG

Commodity Code Risk Analysis (available via the Sustainable Procurement

Centre of Excellence10). The Commodity Coding Risk Analysis includes a risk

assessment process for key categories of procurement (for Higher Education sector but potentially relevant for other public sector organisations)

This can be used to assess headline risk. Then evaluate in detail acquiring further expert advice as required and dependent upon level of risk/relevance.

A1.15 Durham County Council - Targeted Recruitment & Training

A1.15.1 Background: This contractor successfully secured a contract to build 2 large buildings.

A1.15.2 Policy: Targeted Recruitment and Training (TRT) Charter - contractor commitment

The contractor made a firm commitment by signing the Durham TRT Charter to

support the local community by creating employment and training

opportunities and supporting educational initiatives. This reinforced the

Council’s commitment to TRT and provided the contractor with a clear set of objectives.

A1.15.3 Contract conditions: key milestones set within the contract

Month 1 – work started;

Month 2 – School pupils from local community start a monthly programme of

activities, projects and site visits;

Month 3 – Company sign the TRT Employment & Skills Charter;

Month 4 – 8 jobs created & start on site (one with subcontractor);

Month 5 – a 6 week paid work placement was extended to 10 weeks;

Month 6 – 1st Apprentice starts work on site, 3 jobs created and started with

sub contractor;

Month 7 – 2 further jobs created and started, 5 jobs created and started with

sub contractor;

Month 8 – 1 further job created and started, 10 jobs created and started with

sub contractor


Working in partnership with Durham County Council’s TRT Officer, the contractor has successfully recruited:

4 bricklayers;

1 scaffolder;

1 paid work placement in administration;

2 Gate persons;

1 Apprentice;

10

http://spce.ac.uk/knowledge_base_cat/resources/aupo_sustainable_procurement_guidan

ce_and_documentation/

http://spce.ac.uk/knowledge_base_cat/resources/aupo_sustainable_procurement_guidance_and_documentation/

http://spce.ac.uk/knowledge_base_cat/resources/aupo_sustainable_procurement_guidance_and_documentation/



June 2013


3 General Construction Operatives;

1 Office Junior;

18 service engineers.

The number of jobs created on this project is 620% of the contract obligation. The 18 service engineers came from 1 main sub-contractor.

By signing the TRT Charter, a nominated contractor contact engaged regularly

with the TRT Officer within DCC to enable these opportunities to be targeted at

local unemployed people. Where training was to be provided these vacancies

were targeted at new entrants to the construction industry. The skilled trades were targeted at unemployed skilled people.

At week 35 of the project the above employment represents 304 person weeks.

In addition to the opportunities secured through the contract the contractor also agreed to additional support for training. This includes:

School visits from local primary schools;

Workshops for local primary schools;

Research projects;

Work experiences;

Construction Road shows;

Continual professional development of current workforce (including

H&S, short courses & vocational qualifications).

The project build for both buildings has secured a number of opportunities for

local residents and companies: By week 35 a total of 97% of staff employed on

the site on a monthly basis were from the North East region. 33% of these

are Durham residents. 96% of the 31 beneficiaries started through the project were unemployed prior to commencing work.

A total of 31.6% of sub-contracting opportunities were secured by Durham

companies through this contract. (84.2% NE). A total of 22.6% of supplier

opportunities were secured by Durham companies and 88.5% by North East companies. An analysis of the value of contract is to follow in a later report.

A1.16 Church Village Bypass - partnership Between Costain,

Rhondda Cynon Taf Council and Welsh Government - Community Benefits

A1.16.1 Background: In 2007/08 the Rhondda Cynon Taff County Borough Council

tendered for the design and construction of the 7km Church Village Bypass,

which involved five major civil engineering contractors. The Welsh Government

(WG) confirmed funding for the scheme in March 2008 and proceeded to utilise

an Early Contractor Involvement methodology for project delivery. This

involved establishing a partnering approach to design and build, in which the

main contractor (Costain) was engaged before the detailed design stage and

completion of statutory processes, to assist in planning the project and estimating its cost.



June 2013


A1.16.2 Costain reviewed the original outline plans as part of a value engineering

exercise and proposed a revised scheme which identified savings of £37 million

and 51% reduced carbon emissions compared to the original scheme, through

a number of initiatives, including:

Imported stone and primary steel being at least 60% recycled content;

70% recycled aggregate, from local suppliers;

As the scheme went through old landfill sites permission was sought

from the Environment Agency to use materials from these for the

scheme, including 300,000 tyres and 80,000m3 of pulverised fuel ash;

Community engagement and community benefits.

The revised scheme was presented at a public exhibition and outlined the

numerous benefits including a reduction in visual impacts through extensive

planting and the use of bunding to reduce traffic noise.

Additionally, Costain worked closely with the Council and Constructing

Excellence in Wales to consult with the public and key stakeholders to develop a Community Benefits Plan aligned with the Council’s own Community Plan.


On completion of the project in 2010, three months ahead of schedule and £1

million under budget, a total of 90% of waste had been diverted from landfill

and 70% of the bypass had been constructed from locally sourced recycled

aggregate. The local community was kept informed and involved throughout

the project by utilising newsletters and information notices along with a

dedicated website and visitor centre.

Additionally, 75 jobs were created for long-term unemployed during the project

and more than 90% of sub-contracts were awarded to local companies based

in South Wales. The project has won numerous awards and is part of

Constructing Excellence in Wales’ Demonstration Project Programme. This

example highlights the benefits of undertaking formal supplier relationship

management activities with key construction suppliers. In order to realise the

benefits of innovation a relationship between client and contractor which promotes partnership and collaboration is required to achieve mutual benefits.

A1.17 Glasgow Housing Association - Community Benefits

A1.17.1 Background: This Case Study is an extract from ‘Community Benefits in Public

Procurement, The Scottish Government’. The focus was on targeted recruitment and training requirements.

A1.17.2 Policy objectives and market engagement:

For each contract or group of contracts a contractors’ conference was held.

This included a presentation from GHA and Scottish Executive on the

employment and training requirements and opportunities to ask questions. A

leaflet setting out the objectives and contact information for labour and training supply organisations was provided at each conference.

A1.17.3 Subject Matter of the Contract:

In the Official Notice (OJEU), the following text was included in II 1.6 Description/object of the contract;



June 2013


‘Under this contract/these contracts, the contractor/supplier will be required to

support the awarding authority’s economic and social regeneration objectives.

Accordingly, contract performance conditions may relate in particular to social

and environmental considerations’.

A1.17.4 Appraisal Questionnaire (PQQ)

Information was requested on existing apprenticeship and training activity

including:

Recruitment and training of young people; adult returners and the

unemployed;

Willingness to invest in training;

The existence of contract monitoring arrangements (for training); and

the name and position of the person responsible for training in the

Company;

A1.17.5 ITT and specification

Bidders had to submit an Employment and Training Method Statement with their tender setting out how they would deliver:

Every vacancy (including those with subcontractors) to be notified to

agencies named by GHA;

10% of person-weeks delivered by new entrants engaged in a training

programme agreed by GHA;

The equivalent of 5% of person weeks to be available for unwaged work

experience placements;

The provision of records for monitoring and verification purposes,

including compliance with the Data Protection Act;

Provision of reports on performance against stated KPIs.

A1.17.6 Selection and Award

GHA’s Neighbourhood Renewal Team developed a scoring framework for the

Method Statements. This score represented between 5 and 12.5% of the

‘quality’ score, so typically between 1.5% and 3% of the overall scoring

framework (on a 30:70 quality/price ratio).

A1.17.7 Contract Conditions and management

Employment and Training requirements included in two of the four documents

that make up the suite of contracts.

The monitoring requirements are set out in a Constructor Training and

Employment Monitoring Pack. This contains:

An overview of the monitoring arrangements

Copies of the monitoring forms:

New Start Personnel Record

Employee leaver form

Quarterly Report form

New start definition flow-chart



June 2013


A1.18 PAS 91:2013 Construction related procurement - Pre-qualification questionnaires

A1.18.1 Background: A set of standard PQQ questions for construction related procurement, including equal opportunity and diversity11.

A1.19 Shotts Prison Phase 2 Development - Community Benefits

Requirements12

A1.19.1 Background: To ensure social sustainability considerations were embedded in

the Phase 2 development of Shotts Prison the Scottish Prison Service (SPS) specified the requirement for contractors to consider Community Benefits.

A1.19.2 Policy objectives and market engagement:

The key areas focussed on were Recruitment and Training; Involvement of

Small and Medium Sized Enterprises and Involvement of the Third (Voluntary)

Sector. North Lanarkshire Council (NLC) hosted a ‘Bidders’ Forum’ with SPS to

provide background to the requirements on existing regeneration and other Community Benefit programmes operational in the local area.

A1.19.3 PQQ requirements:

Working in partnership with North Lanarkshire Council (NLC) a Pre-Qualification

Questionnaire (PQQ) was developed which specifically tested bidder experience of including community benefit involvement within construction projects.

A1.19.4 Tender/evaluation requirements:

NLC also supported the SPS procurement process by providing specific

questions for inclusion within the Invitation to Tender along with an example format of an ‘Employability and Skills Plan’.

Bidders were requested to address these elements which were assessed as part of the tender evaluation process.


The winning contractor (Laing O’Rourke) for the design and build contract

(awarded in December 2010) outlined a number of community benefits

provisions that will be undertaken during the construction project. These

include: 16 employment opportunities for people who have been unemployed

for over 12 months; 354 unwaged training weeks and local sub-contractor engagement in support of the primary contract.

Laing O’Rouke were proactive in meeting with the SPS prior to works

commencing and engaging with proposed sub-contractors to outline

requirements, which included the delivery of a breakfast seminar to prospective supply chain companies.

Throughout the process the Laing O’Rouke Project Manager has been actively

engaged in driving the Community Benefits agenda with SPS and NLC. To date

(April 2012) excellent progress has been made so far with 8 higher level apprenticeships and 7 labouring jobs created.

11 http://shop.bsigroup.com/upload/PASs/PAS91-2013.pdf

12 http://www.sci-network.eu/snapshots/targeting-community-benefits-in-prison-

construction-in-scotland-uk/

http://shop.bsigroup.com/upload/PASs/PAS91-2013.pdf

http://www.sci-network.eu/snapshots/targeting-community-benefits-in-prison-construction-in-scotland-uk/

http://www.sci-network.eu/snapshots/targeting-community-benefits-in-prison-construction-in-scotland-uk/



June 2013


The example highlights the benefits of being proactive in seeking innovation

and clearly articulating this to suppliers. Undertaking ‘Early Market

Engagement’ (EME) activities early in the pre-procurement phase helped to

allow identification of new, innovative or alternative ways of meeting requirements.

Consideration of Community Benefit provisions needs to be developed and

reflected into the procurement process at this early stage to establish realistic

objectives and targets which then inform the specification, testing of bidder

capability at PQQ, and the subsequent contract. Community benefit provisions

which are relevant to the contract and performance of the contract can be included as part of the qualitative tender evaluation criteria.

Early engagement with the market regarding potential objectives through pre–

tender dialogue or Bidder Forum’s, joint working with the contractor to turn the

outcomes indicated in the contract into practice, and ensuring follow-up

monitoring during the performance of the contract are considered key success factors.

A1.20 Department for Work and Pensions - Land Securities

Trillium & Amaryllis Environmental Services - Example of

Commercial Supplier Delivering Social Outcomes

A1.20.1 Policy: As part of the PRIME contract to provide a range of services following

the transfer of the Department for Work and Pensions Estate and management

to Land Securities Trillium the furniture service delivery is ‘based around the

lifecycle management of all furniture, fittings and equipment on the Estate. All

existing furniture on the Estate will be maintained as ‘fit for purpose’ and will

meet statutory standards, as a minimum, at all times. All replacement

Furniture (whether new or remanufactured) will also meet the quality standards’.

The office modernisation process also involved the upgrading of large amounts

of office furniture. As part of this Land Securities Trillium sought to re-use

office furniture wherever possible, and to refurbish or remanufacture whenever re-use was not possible.

From 2002-2008, the modernisation process resulted in 31,000 refreshed

chairs, nearly 60,000 remanufactured desks and 15,000 remanufactured

storage units. Over 15,000 tonnes of surplus furniture were re-used or recycled

in 2007 and 2008. Of this, less than 4% went to landfill.

Amaryllis has a full de-manufacturing and remanufacturing process plant.

Within the public sector they have worked with the Home Office, DVLA, HMRC, Ministry of Justice and Surrey Police.

A1.20.2 Social outcomes: The link to social outcomes concerned the relationship Land

Securities has had with Remploy, which supports a process of refurbishing and

repairing furniture and creating employment opportunities for ‘people facing complex barriers to the world of work’.



June 2013


A1.20.3 While the focus of the Amaryllis service is to deliver enhanced recycling and

remanufacturing and therefore reduce environmental impacts this may be also

delivered through social enterprises, although in some cases they may not

have the scalability to be able to deal with large volumes. The link with

Remploy may be reinforced through contractual requirements where this meets the procurer’s sustainability objectives13.

A1.21 Reuse@Leeds - Leeds University - Reuse Links to Social

Benefits

A1.21.1 Background: In 2009 it was identified that a large amount of good-quality

furniture was being disposed of by the University. This led to the development

of an online reuse system. This system linked departments, saving over £380k

of furniture and over 80 tonnes of carbon savings in less than two years.

Building on this, in March 2011, a new site, ‘reuse@leeds’ was launched.

Developed with procurement in mind, this site offers a simple system of reuse across campus, including furniture, stationery and equipment categories.

A1.21.2 This system, while enabling financial and environmental savings, also delivers

social benefits - if re-use is unsuccessful, local company ‘Over2Hills’ take the

items and redistribute to local charities, with any profit generated from this being donated to a charity nominated by the University14).

A1.21.3 While not directly related to procurement activities this example highlights the

importance of re-thinking the need for procurement and considering the scope for links to social outcomes.

A1.22 London Councils - Sustainable Furniture Disposal Toolkit -

Social objectives

A1.22.1 Policy Objectives:

The toolkit15 for tendering office furniture disposal in a sustainable manner is

available from the link below. It includes specifications for the environmental

and social objectives listed below which were cleared by the legal team at

Camden Council (these would need to match the relevant organisation’s objectives, so may need to be adjusted accordingly).

Reducing waste, re-use .v. recycling;

Vehicle emissions, vehicles used and transport distances;

Promoting new markets and supporting SMEs;

Equalities- improvement of staff conditions in fire stations;

Social responsibility of contractors & training opportunities.

13 http://www.dwp.gov.uk/docs/026-sch-8-epc-generic-method-statement.pdf

14 http://reuse.leeds.ac.uk/

15

http://www.londoncouncils.gov.uk/search.htm?cx=012816060298198299354%3Aulbau

m7l6aw&cof=FORID%3A11&ie=UTF-8&q=furniture&sa=go

http://www.dwp.gov.uk/docs/026-sch-8-epc-generic-method-statement.pdf

http://reuse.leeds.ac.uk/

http://www.londoncouncils.gov.uk/search.htm?cx=012816060298198299354%3Aulbaum7l6aw&cof=FORID%3A11&ie=UTF-8&q=furniture&sa=go

http://www.londoncouncils.gov.uk/search.htm?cx=012816060298198299354%3Aulbaum7l6aw&cof=FORID%3A11&ie=UTF-8&q=furniture&sa=go



June 2013


A1.22.2 ITT: This includes a suggested method statement wording as follows:

‘Please outline your mechanisms for ensuring that the processes in place to

provide the service are sustainable and designed to reduce any environmental impact. Please concentrate your response on methods employed to:

Reduce waste in line with the waste hierarchy as detailed in the Waste

Strategy for England;

Reduce CO2 emission and other pollutants through vehicles used and

transport distances;

Promote new markets and support SMEs;

Demonstrate social responsibility including training and employment

opportunities provided;

Encourage your supply chain to meet the sustainability objectives of the

contract’.

A1.23 London Fire Brigade - furniture disposal and social

benefits: sustainable furniture disposal toolkit tested - Social objectives and Evaluation

A1.23.1 Background: The London Borough of Camden was the lead Local Authority on

a 2-year project for the London Centre of Excellence on sustainable

procurement. The London Borough of Camden assisted the London Fire and

Emergency Planning Authority (LFEPA) to determine the most affordable sustainable method for the disposal of excess office furniture.

A1.23.2 An inventory analysis carried out in February 2007 identified approximately

5,566 items of furniture were required to be disposed of with an approximate

weight of 297 tonnes. Whilst the furniture was in good condition it was not

recommended that the furniture be the first choice to furnish the new building

as there are a number of different styles and ranges of furniture and would be very difficult to manage such a mix of products across a single site.

A1.23.3 Subject Matter: The options available to dispose of the furniture were:

disposal to landfill;

disposal through a single social recycling service and;

disposal through a managed social recycling network.

The following is the summary of the analysis undertaken at the time:

A1.23.4 Landfill Disposal: Costs for landfill disposal are likely to be in the region of

£77,000 including site labour to dismantle the furniture and transport it to

allocated skips. This equates to £259 per tonne.

The environmental impact of landfill disposal is the fact that 297 tonnes of

mixed waste will be added to the waste stream. There are no environmental benefits from this option.

Socially this disposal option is neutral and has no significant bearing on employment or the wellbeing of the community.

A1.23.5 Single social recycling service: The likely costs for disposal by means of a

single social recycling service will be in the region of £71,000 including site

labour, transportation for processing and gate fees. This equates to £239 per tonne.



June 2013


The environmental impact is mixed as only a small amount of the furniture is

likely to be re-introduced into the reuse marketplace and the balance will be

processed for the recyclable materials. The energy required to recycle the

materials will be considerable although no accurate data is available to quantify this.

The social impact is very good as employment is secured in organisations that

require this type of work for their survival. There are undoubtedly public

relations opportunities from being seen to support the work carried out by

social organisations. This may have some benefit in developing wider

recognition of the work London Fire Brigade is doing to enhance their sustainable credentials.

A1.23.6 Managed social recycling network: The likely cost for disposal through a

large-scale managed social recycling network will be in the region of £48,300

including site labour and transportation to the process centre in Dundee, Scotland. This equates to £163 per tonne.

The reason behind the lower disposal costs are that a far higher proportion of

the furniture is sold into the reuse market thereby offsetting the single social

recycler’s likely disposal costs for timber and waste chipboard. Resale margins

are high as there is no cost for the product as the donor organisation covers the costs of dismantle and transportation.

Unlike the single social recycling process the managed social network offers

much higher levels of product being re-introduced into the marketplace with

very little material recycling. As with the single social recycler the social impact

is positive and represents an opportunity to enhance the social standing of London Fire Brigade.

A1.23.7 This includes the tender evaluation matrix with a focus on SME, training and supply chain sustainability.

A1.24 London 2012 - identifying key social issues through risk

assessment matrix - Social and Ethical Risk Assessment

A1.24.1 Background: The comprehensive LOCOG Sustainable Sourcing Code covers all key procurement categories.

A1.24.2 This includes furniture and fittings, which are assessed against broad social issues as follows:

Labour standards;

Health and safety;

Animal welfare;

Diversity and inclusion.

A1.24.3 The matrix16 therefore flags up key social issues which will need to be considered in relevant procurement documentation.

The matrix also confirms that for furniture and fittings LOCOG mandates Sedex

registration. Suppliers and licensees are encouraged to register with Sedex regardless of their particular category.

16 http://www.london2012.com/documents/locog-publications/sustainable-sourcing-

code.pdf

http://www.environment-agency.gov.uk/aboutus/112323.aspx



http://www.environment-agency.gov.uk/aboutus/112323.aspx



June 2013


A1.25 Environment Agency - Wheal Jane Operations &

Maintenance Contract 2010-2020 - Delivering local

employment through procurement

A1.25.1 Background: (From EA) The Environment Agency (EA) is a committed leader

in sustainable procurement and have contributed to the Government’s

strategy. We have an award winning approach as recognised by the European

Eco-Management and Audit Scheme in 2009 and we openly share and promote

this to others. This particular case study demonstrates that our approach can

deliver real improvement and drives a step change in supplier performance.

The outcomes benefit the environment, local community and economy, and contribute to EA corporate strategy, Creating a Better Place, 2010 – 2015.

A1.25.2 In 1992, over 45 million litres of heavily contaminated minewater burst out of

the disused Wheal Jane tin mine and into the Carnon River and Falmouth Bay.

As a result, the EA commissioned the Wheal Jane Minewater Treatment Plant (the Plant) to treat minewater and dispose of the toxic metals within it.

A1.25.3 A ten year contract was negotiated in 2000 to outsource the operation and

maintenance of the Plant. The EA have recently re-tendered this contract for

the £15m project for the period 2010 to 2020.

A1.25.4 As well as several environmental criteria the following social considerations were met:

A1.25.5 Local Employment: Maximum influence was exerted on the supply chain to

retain local people in their jobs because Cornwall has a high level of

unemployment. Additionally, the contract is labour intensive and requires input

from specialists.

A1.25.6 Local Economy: Contract conditions: Suppliers should be encouraged to

utilise local SMEs for sub-contracted work, material supply and maintenance contracts.

A1.26 APUC Supply Chain Code of Conduct – setting clear policy

objectives

A1.26.1 Background: APUC (Advanced Procurement for Universities and Colleges)

Limited is the procurement centre of expertise for Scotland’s 60 universities and colleges.

A1.26.2 APUC and its client community of Colleges and Universities is committed to

carrying out procurement activities in an environmentally, socially, ethically

and economically responsible manner and to entering into agreements and

contracts with suppliers that share and adhere to its vision. To demonstrate

this commitment, current and potential suppliers are asked to acknowledge

their compliance with the principles of the APUC Supply Chain Code of Conduct,

below, with respect to their organisation and their supply chain.

A1.26.3 To this end the Code includes a focus on:

Social Compliance

Ethical Compliance and Economic Development

Environmental Compliance

Full details are available here.17

17 http://www.apuc-scot.ac.uk/code.htm

http://www.apuc-scot.ac.uk/code.htm

http://www.apuc-scot.ac.uk/code.htm



June 2013


A1.27 National Skills Academy Construction Skills – toolkit for skills and employment outcomes18

A1.27.1 Background: The National Skills Academy for Construction Client-Based

Approach for use in Scotland provides a toolkit to deliver employment,

apprenticeships and training to public sector and other procuring clients

through their construction projects. It provides model documentation,

benchmarks, case studies and practical commentary. Based on successful

National Skills Academy for Construction projects, the guidance includes all

necessary components to deliver apprenticeships, employment and training

opportunities on any type and size of construction project.

A1.27.2 This guide has been commissioned by Construction Skills to provide the

working documentation for local authorities and other bodies procuring

construction projects to embed employment and skills, right through from

policy and strategies to procurement and operational implementation. It also

explains how progress towards the outcomes can be monitored. The guidance document includes:

Good practice information on use of an Employment and Skills Strategy and the development of an Employment and Skills Plan (ESP)

Legal, policy and process advice on procurement of contracts

Template benchmarks relating to a range of employment and skills areas

Guidance as to the inclusion of supply chain diversity

Appendices, including:

a template ESP

a summary of the employment and skills areas and potential issues

surrounding them

template procurement and contract clauses

an Employment and Skills Strategy Workbook.

A1.28 Olympic Games, Responsible Procurement, Travel

Ambassador uniforms – tender requirements

A1.28.1 In accordance with the GLA Group Responsible Procurement Policy and the

requirements of Games organisers LOCOG, it was important to ensure the

supplier could ethically source items ranging from polo shirts and hats to

backpacks and water bottles. After a rigorous tender process, in which ethical

sourcing requirements were a key element, Hull-based company Arco won the

contract. Arco are ETI members, and have a strong track record in ethical

sourcing. They commissioned third party independent social audits for eight

sites in China, Laos and the UK to understand current labour conditions at each site, and determine whether any corrective actions were required.

18 http://www.cskills.org/nsacademy/clientledapproach/procurement/client-approach-

scotland.aspx

http://www.cskills.org/nsacademy/clientledapproach/procurement/client-approach-scotland.aspx

http://www.cskills.org/nsacademy/clientledapproach/procurement/client-approach-scotland.aspx



June 2013


Some non-conformities against the ETI Base Code were discovered at several

of the sites. These ranged from a lack of emergency lighting systems and

broken sewing machine needle guards to inconsistent wage payments and

bank holiday pay issues. Clear, specific, time-bound corrective action plans

were agreed between TfL, Arco, and the factory managers. The plans were

overseen by Arco, who provided TfL with evidence that each issue had been resolved.

Full details are available here19

A1.29 West Midlands Procurement Framework for Jobs and Skills

– Guidance throughout procurement20

A1.29.1 The Main Guide to the West Midlands Procurement Framework for Jobs and

Skills – Harnessing Public and Third Sector Buying Power, The West Midlands Economic Inclusion Panel, March 2010;

A1.29.2 The Framework consists of three linked documents:

a Summary Guide, which provides an introduction to the Panel’s

approach to achieving its aim of embedding jobs and skills as core

considerations throughout the procurement process, and the issues to be considered when doing so;

a Main Guide containing information on legal and policy matters, supply-

side issues and the free, public sector recruitment and training support services that are available to procurers and prospective contractors;

and

a Toolkit for Stakeholders containing a series of model documents,

including template jobs and skills clauses, detailed legal guidance and

various tools, which can be downloaded and adapted to meet the needs

of individual public and third sector organisations and prospective contractors, including SMEs and social enterprises.

A1.30 Labour Standards Assurance System - Labour Standards

Monitoring and Improvement

A1.30.1 The Labour Standards Assurance System has been developed by the

Department of Health in partnership with NHS Supply Chain21. It has been used

initially on a pilot surgical instruments contract by NHS Supply Chain and will

now be used for other contracts where labour standards have been identified

as being of particular concern, using an initial risk assessment based on the Ethical Procurement for Health assessment process22.

19

http://www.london.gov.uk/sites/default/files/TfL%20TA%20Uniforms%20case%20study.

pdf

20 http://hub.westmidlandsiep.gov.uk/uploads/files/smes/main%20guide%20job.pdf

21 http://www.supplychain.nhs.uk/news/company/nhs-supply-chain-sets-the-standard-

for-ethical-procurement-in-new-bma-film/

22 http://www.ethicaltrade.org/ethical-procurement-for-health

http://www.london.gov.uk/sites/default/files/TfL%20TA%20Uniforms%20case%20study.pdf



http://hub.westmidlandsiep.gov.uk/uploads/files/smes/main%20guide%20job.pdf

http://www.supplychain.nhs.uk/news/company/nhs-supply-chain-sets-the-standard-for-ethical-procurement-in-new-bma-film/

http://www.supplychain.nhs.uk/news/company/nhs-supply-chain-sets-the-standard-for-ethical-procurement-in-new-bma-film/

http://www.ethicaltrade.org/ethical-procurement-for-health



June 2013


A1.30.2 The Labour assurance system covers the range of policies, procedures and

practices that an organisation employs to identify labour standards abuses, mitigate risks and drive improvement, within:

The organisation itself;

Contractors and sub contractors;

Suppliers and;

Parties in the supply chain.

A1.30.3 The System is designed to encourage improvement with levels of progression,

suppliers being responsible for demonstrating how they manage labour

standards and deliver improvement and they are initially expected to at least

meet Level 1. The LSAS recommends four levels of maturity: foundation,

implementation, established and progressive, with all awarded suppliers being

obliged to reach at least foundation level within six months of contract award

before being allowed to sell products through the framework. Clear milestones

are set for suppliers to progress through the remaining three levels of the LSAS

with support from NHS Supply Chain to help suppliers through the auditing process.

A1.30.4 It comprises a range of requirements:

A1.30.5 Policy: Top management shall define the organisations policy in relation to

labour standards as relevant to the organisation itself, its contractors, sub contractors, suppliers and parties engaged through the supply chain. It:

Is appropriate to the nature and scale of the organisation, its activities,

products, and services;

Makes a commitment to continual improvement and maintaining labour

standards in line with a defined set of minimum labour standards;

Includes a commitment to comply with applicable legal requirements,

and other requirement to which the organisation subscribes;

Is periodically reviewed to ensure it is appropriate to the nature, scale

and scope of the organisation’s activities, products and services;

Commits the organisation to make available sufficient resources for

implementation;

Provides a framework for setting objectives and targets;

Is documented and maintained;

Is communicated effectively to all persons working for or on behalf of

the organisation (including contractors and suppliers);

Is available to the public.

A1.30.6 Management Representatives: The organisation shall establish, implement

and maintain a procedure(s) to:

Identify how labour standards relate to the organisation, its activities,

products and services;

Assess the extent to which labour standards abuses do or could occur

within;

The organisation’s direct operations;

Its supply chains for goods and services;



June 2013


Consider the views of key interested parties.

A1.30.7 The organisation shall document this information and keep it up to date and use this information to define LSAS priorities.

A1.30.8 Legal and Other Requirements: The organisation shall establish, implement

and maintain a procedure(s).

A1.30.9 To identify and have access to information on relevant labour / employment /

human rights legislation and other requirements as they apply to its direct

operations, contractors, sub-contractors, suppliers and parties in the supply chain.

A1.30.10 Staff with responsibility for labour standards assurance have access to this

information and understand how it applies in relation to their roles and responsibilities.

A1.30.11 Objectives, Targets and Programmes: The organisation shall establish,

implement and maintain documented objectives and targets for labour standards assurance.

A1.30.12 Objectives and targets shall be:

Related to significant issues identified through the labour standards

status review;

Within the defined scope of the Labour Standards policy and are also in

line with the organisation’s overall strategy and objectives;

Specific, measurable, realistic and time-bound;

Assigned to an accountable owner(s), with responsibility for

achievement of the objectives and targets;

Agreed by top management;

Systematically reviewed to ensure they reflect the priorities of

organisation and its policy;

A1.30.13 The organisation shall establish, implement and maintain a programme for achieving its objectives and targets.

A1.30.14 Roles and Responsibilities: Management shall ensure the availability of resources essential to establish, implement, maintain and improve the LSAS.

A1.30.15 Roles, responsibilities and authorities shall be documented and communicated

in order to facilitate effective management of labour standards within the organisation’s direct operations and through its supply chains.

A1.30.16 Competence, Training and Awareness:

The organisation shall:

Ensure that any person (directly employed or working on its behalf) with

designated roles and responsibilities related labour standards assurance

is competent, on the basis of appropriate education, training or

experience;

Identify training and development needs to support effective labour

standards assurance and improvement;

Retain records to evidence this.



June 2013


A1.30.17 Communications: The organisation shall establish, implement and maintain a procedure(s) for:

Internal communication among various levels and functions of the

organisation;

Receiving, documenting and responding to relevant communications

from external interested parties;

Receipt and secure management of information from ‘whistle-blowers’

(internal or external) that protects the rights of the ‘whistle blower’;

The external communication of information on its labour standard

assurance practice and performance, clearly identifying the scope of this

procedure and any significant exceptions.

A1.30.18 Operational Control:

The organisation shall:

Identify its activities and decisions that are associated with labour standards

issues and assurance management (critical control points).

Establish, implement and maintain procedures to control situations where their

absence could:

(i) Lead to the contravention of relevant legal or other

requirements;

(ii) Present opportunities for labour standards abuse to arise or go

unchecked;

(iii) Undermine improvement or mitigation actions.

A1.30.19 Supply Chain Management:

The organisation shall establish, implement and maintain a procedure for:

Identifying suppliers and other parties within its supply chains (supply

chain mapping);

Identifying labour standards risks within the supply chain;

Communicating policy and other relevant information to suppliers and

other parties in the supply chain;

Collection of information on identified risks;

Verification, evaluation and communication of information on identified

risks;

Taking action in response to information collected.

A1.30.20 Emergency Response:

The organisation shall ensure that:

Significant risks, related to labour standards issues, and planned

mitigation actions are documented;

Periodic reviews of risks are undertaken to ensure they are still current

and that mitigation actions are appropriate and effective.



June 2013


A1.30.21 Management Review:

The organisation has internal monitoring procedures in place to ensure that the LSAS is operating effectively including:

Tracking progress against overall targets and objectives, and any annual

targets and objectives;

Tracking use of resources;

Evaluating impact of LSAS.

A1.30.22 In addition to:

regular monitoring, any substantial changes to an organisation’s

operations or organisational structure result in a re-evaluation of the

LSAS, its effectiveness and applicability;

reviewing the progress of the LSAS, the organisation regularly reviews

and updates the policies and procedures that constitute the

management system of their LSAS;

regular reviews, any substantial changes to an organisation’s operations

or organisational structure result in a re-evaluation of the labour

standards policies and procedures.

ANNEX A Case Studies and Examples - Defra, UK

Documents

Transcript of ANNEX A Case Studies and Examples - Defra, UK