Sustainable Procurement

The NSW Government Sustainability Policy, the Environmental Sustainability Strategy 2012-2015 provides guidance and targets for the Agency to become a more environmentally sustainable organisation by:

  • Reducing waste;
  • Encouraging the efficient use of energy and water;
  • Increasing recycling;
  • Procuring goods with recycled components;
  • Selecting suppliers with environmentally sustainable business practices; and
  • Resourcing and procuring efficient appliances.

This policy provides guidance for Entities on how to embed these environmental considerations into procurement decisions for goods and services consistent with the purchasing principles, namely value for money, open and fair competition, accountability, risk management, probity and transparency.

Key Requirements

Entities are to purchase goods and services that have reduced impacts on the environment compared with competing products and services that achieve the same function and value for money outcomes.

Entities are required to consider environmental impacts and opportunities during the procurement process with attention given to the early stages of the procurement process when defining business needs, market analysis, tender and quotation strategy, leading to market engagement

Entities should define their environmentally sustainable procurement priorities based on an assessment of environmental risk and their ability to influence environmentally sustainable outcomes.

Different goods and services have different environmental impacts and opportunities associated with them. The approach to environmentally sustainable procurement should be scaled based on an assessment of the level of adverse environmental impact (risk) and an assessment of the Entity’s ability to effect environmental outcomes (influence), including the capacity of suppliers to respond to the specific functional requirements on a value for money basis.

Entities are to purchase based on the principle of Value-for-Money and should therefore consider the total cost of ownership in meeting NSW Health’s business needs and procurement budgets.  “Hidden” costs, such as energy and water use or disposal must be considered.

A procurement specification and the evaluation of tenders or quotations is to proceed on a Total Cost of Ownership (TCO) basis or whole of life cost where the environmental values are considered alongside matters related to acquisition, operation, maintenance, storage, disposal and retirement.

Entities should consider where appropriate the inclusion of minimum environmental performance requirements in specifications.

These minimum requirements can be presented as mandatory criteria only if the Entity is confident that the market is able to meet the requirements in line with the value for money analysis. Mandatory criteria must also be based on identifiable technical standards or quantifiable data. Such mandatory requirements should be defined in relation to the impact of the good or service on the environment.

Alternatively, the environmental performance requirements can be noted as desirable criteria and/or suppliers can be required to provide information about their current environmental management practices.

Entities should consider the inclusion of environmental criteria in the selection of suppliers where appropriate. Where an Entity considers it appropriate to include environmental evaluation criteria in the selection process this needs to be published as part of the quotation or tender process.

Environmental requirements can be defined in relation to performance standards, the impact of the good or service on the environment and/or in relation to supplier’s environmental management practices. In setting evaluation criteria, consideration is to be given to alignment with the procurement specifications, policies and the market’s capacity to respond.

Entities’ relationships with suppliers should include the principle of continuous environmental improvement.

Improvements in environmental sustainability and reduced impact of products or services on the environment can be achieved over time as a result of improved mutual understanding of desired outcomes and opportunities between departments and suppliers. Contracts for the purchase of products and services over a multi-year period should include the principle of continuous environmental improvement.

Environmental impact should form part of any surveys of Clients on Contractor performance and the suitability of supplies.

When considering the disposal of goods, Entities should explore the prospect of recycling or transferring such goods to another Entity or agency as a priority, in accordance with disposal of goods policy. Other options open would be to return them to the manufacturer wherever practicable or to sell them. Alternately, if the unwanted items have some value to a charity or a community/non-for-profit organisation, then such items can be removed by these organisations and their ownership transferred, subject to a written declaration from such an organisation attesting to no cost and no obligation/ liability to the Agency, now or in the future.