Phase 2: PRE-PROCUREMENT AND PREPARATION OF TENDERS

This is the stage before the formal tendering phase where procurers have the possibility to engage with the market.

The boxes below highlight the most relevant pre-procurement instruments and show how relevant they are to foster the procurement of bio-based products and services.

Needs analysis

Brief explanation:

A needs analysis is an investigation into a business case which contains the specific requirements of your organisation. It helps you ensure that any tendering process will focus on a solution to the exact problem.

Before you purchase a product or service, it is important to know what the precise need of your organisation is and who has this need. Often, by consulting various experts and investigating the ‘need behind the need’, this casts new light on what the actual need is. By then correctly formulating the need in the request, you can provide the scope for innovations that can satisfy the need.

The information received constitutes the basis of the procurement decision. This is a crucial step that could encourage innovation and the application of bio-based products and services. Awareness raising and the dissemination of good practices is important to provide information on the available bio-based substitutes, legal possibilities and budget relevancies.

More information:

Needs analysis

Market survey

Brief explanation:

A market survey helps you acquire knowledge of what the market can offer and understanding the potential supply chains. A market survey can help answer a range of questions when preparing for a possible procurement, such as: Is the solution we are seeking already on sale, or is it still awaiting development? What, broadly speaking, are the available solutions, who are the tenderers and what are the prices? Is it possible to combine existing solutions? What do the tenderers claim to be the advantages and disadvantages of their solutions? Is Innovation Procurement an attractive option, or would it be better to choose a currently-used solution?

The application of bio-based products and services often will involve new market actors/suppliers. Therefore it is important to get more information on this market so that more realistic tender requirements can be formulated/applied. A general market survey template could be fine-tuned for the purposes of the application of bio-based products and services in procurements.

More information:

Market survey

Market consultation

Brief explanation:

This is a way of consulting market parties about a proposed tender. With the gained knowledge you are able to better formulate your need.

As desktop research cannot answer all questions about the knowledge and opportunities offered by the market it is wise to put additional questions to market parties. What, for example, would be a good way of formulating the request? Is the request ambitious enough and at the same time feasible for the market? What should be included in, or left out of, the Schedule of Requirements? A market consultation can answer these questions. You could also further research how you could work with the market and what the benefits of purchasing an innovative solution may be.

The market consultation should discuss the possibilities of existing and innovative bio-based products and services under development that can fulfil your need.

More information:

Market consultation

Functional specifications

Brief explanation:

A functional specification is a method of tendering by which you give a clear description of the standards that a product, service or solution is required to meet in a tendering process, without restricting the freedom of suppliers to come up with innovative ideas.

Functional specification is useful if you expect that a supplier can offer added value to procurement processes by means of, for example, innovative or new products, services or solutions. It is also useful for procedures where the most important goal is to encourage innovation. By functionally specifying a tendering process you give your suppliers the freedom to contribute their market or field expertise to a problem area in which you are interested. You thereby also give them the freedom to provide you with the best possible solution, which is often a solution that you may not have even considered yourself.

More information:

Functional specifications

SPP/GPP criteria documents

Brief explanation:

Green Public Procurement (GPP) means that public authorities seek to purchase goods, services and works with a reduced environmental impact throughout their life-cycle compared to goods, services and works with the same primary function which would otherwise be procured.

Sustainable Public Procurement (SPP) is a process by which public authorities seek to achieve the appropriate balance between the three pillars of sustainable development - economic, social and environmental - when procuring goods, services or works at all stages of the project.

The EU GPP criteria are developed to facilitate the inclusion of green/sustainable requirements in public procurement tenders. The basic concept of GPP relies on having clear, verifiable, justifiable and ambitious environmental criteria for products and services, based on a life-cycle approach and scientific evidence base.

When it comes to the application of bio-based products and services in public procurement it is crucial to address the issue of environmental sustainability first at policy level and later in the practical implementation of the procurement. Particular attention should be paid to the new standard ISO 20400:2017 Sustainable procurement – Guidance, which includes practical measures for public and private organisations on integrating sustainability within procurement.

It is important to show a clear link to the procurers that the bio-based products and services that they purchase comply with established GPP criteria. To this end further LCAs have to be made.

Best Price Quality Ratio

Brief explanation:

According to the New Public Procurement Directives 2014/24/EU and 2014/25/EU public contracts must be awarded on the basis of the MEAT (most economically advantageous tender). There are two options for awarding the contract on the basis of MEAT: either the best quality-price ratio is being assessed or the price or cost only. The best quality-price ratio means that the award criteria is designed so that it includes both quality and costs elements.

The assessment whether this instrument is important for the procurement of bio-based products and services depends on the specific contract in question. Qualitative award criteria however could allow the contracting authorities to target those areas that are important to them. One of the requirements related to the award criteria is that it has to be linked to the subject matter of the contract. Due to this legal requirement the indication for bio-based products could be a reasonable part of the technical specifications.

Total Cost of Ownership

Brief explanation

Total Cost of Ownership (TCO) refers to the cost you expect to incur throughout the entire life cycle of the purchase. Having regard to the TCO will assist you in choosing the best tenderer from a tendering process. Alongside the financial aspects of the purchase you can also weigh up the environmental aspects.

You should consider the TCO if you expect to be able to make a smarter purchase by looking at the total life cycle costs (LCC) of a product or service. In Sustainable Public Procurement (SPP) the initial costs may be higher, for example, because other materials are used or because a maintenance-free or low-energy design is used. However, these higher initial costs can be compensated for over time by lower running costs and maintenance costs, for example, by lower energy consumption or extended life of a product or work. Also the end-of-life costs may be lower. By considering the costs for purchase, maintenance and disposal, "price" will be seen different when comparing several tenders. By applying the TCO, an innovation requiring a higher initial investment gets a fair chance.

More information:

Total Cost of Ownership

Life cycle costs

Brief explanation:

Life-cycle costing (LCC) means considering all the costs that will be incurred during the lifetime of the product, work or service:

  • Purchase price and all associated costs (delivery, installation, insurance, etc.);
  • Operating costs, including energy, fuel and water use, spares, and maintenance;
  • End-of-life costs, such as decommissioning or disposal.

LCC makes good sense regardless of a public authority’s environmental objectives. By applying LCC public purchasers take into account the costs of resource use, maintenance and disposal which are not reflected in the purchase price. Often this will lead to ‘win-win’ situations whereby a greener (bio-based) product, work or service is also cheaper overall. The main potential for savings over the life-cycle of a good, work or service are:

  • Savings on use of energy, water and fuel;
  • Savings on maintenance and replacement;
  • Savings on disposal costs.
More information:
Factsheet #5 on LCA and LCC

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