Development of Strategic Procurement and Sustainability. Salla Koivusalo Sustainability Consultant Procurement Center City of Vantaa

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1 Development of Strategic Procurement and Sustainability Salla Koivusalo Sustainability Consultant Procurement Center City of Vantaa

2 CARBON NEUTRAL VANTAA 2030 Change -80 % since kt CO2-ekv 215 kt CO2-ekv Compensation for remaining emissions Limitations Emissions generated within the city and emissions of purchased electricity, not consumption emissions Not emissions from air traffic 2

3 The objectives are realized by management City challenges and procurements - the city's needs Management= Productivity Development of competence Market dialogue - a marketplace of responsibility Communication = informing of goals Procurement making innovation possible - codevelopment, piloting Creating partnership criteria

4 Implementing strategy and values through management Proactive and strategic procurement management makes possible Integration into the management system Implementation of procurements Plugging into collaboration and agreements Development and reporting The Strategic Procurement Model (Coordination Group) puts effectiveness in practice by providing tools, expert assistance for procurements, EARLY market dialogue, competitive bidding, and early co-operation during the contract period/kategory management The Strategic Procurement Roadmap provides a constantly updated situation snapshot of future needs - business units and city-wide overall picture

5 Procurement Impact Preliminary Assessment Tool (Strategic Procurement Roadmap) Criteria described below for assessing the impact of strategic purchases.in the preparation phase of the procurement, the evaluation is a preliminary evaluation, the purpose of which is to recognize the greatest possibilities to improve the impact, accountability and cost-effectiveness of the services offered by the city. Manual: each line is evaluated as an independent result area, 9 different strategic criteria per need/procurement to be reviewed.effectiveness should be assessed in relation to city actors, local residents, businesses, and organizations. Identified strategic procurements are exported to a roadmap that is constantly updated. Different result areas and industries are aggregated to update the city road map at least once a year. Background information The procurement target, the need. Organizations that are involved in and impacted Potential Benefits (Points per Category 0-10) 1. Productivity / savings potential Small Moderate Large 2. Potential for improving service quality Small Moderate Large 3. Environmental impacts and improvement of resource wisdom 4. Social impacts on different population groups Small Moderate Large Small Moderate Large 5. Cooperation benefits within the city Small Moderate Large 6. Market readiness to meet the city's needs 7. Possibility of duplication of the solution in the market No ready solutions Semi-finished, requires experiments Small Moderate Large 8. Local innovation and growth potential Minor Moderate Large Available solutions are available 9. Risk potential Small Moderate Large

6 Impact of procurements Guidelines for Impact Assessments Potential benefit for the city and inhabitants 1. Productivity / savings potential 2. The potential of improving service quality 3. Environmental impacts and resource resilience Evaluate potential benefits in relation to current and existing solutions on the market. Try to take into account the whole life cycle. Assess the potential benefits (a) to your own unit and (b) across the urban group over the industry boundaries and the life cycle (eg, the positive and negative productivity and savings effects beyond the industry boundaries). Assess the potential of the solution to be provided to improve the quality of services provided by the city in relation to existing solutions and practices (eg customer potential, accessibility, accessibility, flexibility, usability). If needed, take advantage of the city's service design experts. Assess the positive and negative environmental impacts of the solution (eg living conditions, soil, landscape) and resource efficiency (including climate emissions, material losses, ecological footprint). The assessment can take advantage of the assessment of the effectiveness of procurement accountability and the roadmap for city resource resilience. 4. Social effects In addition to direct customer impact, the potential wider social impact of different population groups (eg security, employment, equality, child impact, and gender effects). The evaluation can take advantage of the procurement employment model, the evaluation table of the effectiveness of procurement, accountability, the equality and non-discrimination workbook, and welfare narrative, review, or reporting. 5. Synergy opportunities within the city Evaluate opportunities for co-operation in the implementation of the procurement (needs, work inputs, budgets) and harmonization of processes within the city group. Take advantage of the procurement employment model. Operation and competitiveness of companies 6. Market readiness to meet the city's needs 7. Possibility of duplication of the solution in the market 8. Local innovation and growth potential Assess the degree of market development in relation to the identified need to choose the right procurement model (eg R & D procurement, innovation partnership, piloting, procurement of a production solution). Evaluate how likely a solution to be procured can be introduced in other cities and the private sector. This affects, among other things, the prevalence of the development need (unique or universal/global), and whether the solution is tailor-made for the city or whether it has standardized product characteristics. Digital solutions affect, among other things, transparency of interfaces. Assess the likelihood that local actors have relevant expertise and are able to provide innovative solutions to the city's recognized developmental challenge. (Note that local suppliers can not be promoted in public procurement, but innovative purchases can be launched especially for sites that are known to have local innovation and growth potential.) The assessment can take advantage of the vitality program and the experts of the city's business unit. 9. Risk potential Estimate the level of risk by focusing on local people, economy and preparedness at the various stages of the procurement process (need definition, market knowledge, bidding, contract) and in relation to the target and supplier of the procurement and the end users/residents. The assessment can take advantage of the procurement risk assessment questionnaire.

7 Sustainability Advisory Board Views and experiences on accountability, monitoring/reporting and communication Where to start, how to prioritize (SDG as bechmark) Timetable for implementation and mobilization Resources and know-how Common objectives - How can Vantaa City be supporting/promoting companies and other actors' own responsibility? - Vantaa Code of Conduct Clarification of responsibility objectives (materiality assessment) UN Sustainable Development Goals Agenda 2030, The ILO's rights of children and working life Covenant of Mayors-agreement Implementation of the Paris Climate Agreement EU and national recycling and bio-economic goals

8 Sustainability Advisory Board configuration The City of Vantaa has invited representatives of the following organizations to work in the working group: Vantaan Energia, Finavia, CGI, Fair Trade Association, Green Building Council, HSY, HSL, Posti, Demos Helsinki, YIT, Kesko Oyj. The City of Vantaa s representation from all sectors KAJO (economic development work) SIVI (economy and administration) SOSTER (economy and administration) MATO (environment center, municipal engineering) KONSAS (Procurement Center)

9 Strategy goals are implemented through procurement City challenges and procurements - the city's needs Leadership = productivity Development of competence Market dialogue - a marketplace of responsibility Effectiveness = implementation of the strategy Communication Communication = = informing of informing of goals goals Procurement making innovation possible - codevelopment, piloting Creating partnership criteria Co-operation = vitality, external resources

10 Evaluation Assessment and observation of strategic nature, responsibility & road safety

11 The Procurement Center s process in preliminary evaluation THE CITY S STRATEGY Evaluation of the strategic nature of procurements Evaluation group 2x month - Objectives - Importance Assessment tool City Procurement Coordination Group 4 x year - Coherence Good practices Market dialogue - A suitable goal - A suitable time span Assessment tool - New objectives Criterion Library ESPD Contract management Cloaudia The contractor - Tracking - Cooperation Procurement working group - Criteria - Contract Assessment tool

12 The aspects of preliminary operational evaluation in the procurement process preparation choice of Supplier management of Supplier A. Managing the procurement process B. Human rights and ethical considerations C. Labor law considerations D. Environmental considerations E. Fair working principles F. End user's point of view G. The social impact of the activity H. Data protection I. Data security J. Preparation for disruptions and exceptional situations K. Financial responsibility L. Possible social and health sector and regional impacts 12

13 Responsibility Assessment Chart A. Managing the procurement process B. Human rights and ethical considerations C. Labor law considerations D. Environmental considerations E. Fair working principles F. Consumer aspect G. The societal impact of the activity 1. Responsibility has been incorporated into the strategy and management system 1. The human rights risks of the supply chain have been identified 1. Respect for labor law and local and industry collective agreements 1. Prevention of contamination (water, soil, air). 1. Principles and practices to prevent corruption 1. Honest marketing and communication 1. Enabling access by local actors 2. Responsibility has been taken into account in preparing procurement and communicating in the supply chain 2. The principles of the social responsibility chain (ILO) have been identified and incorporated into the requirements 2. Workers' freedom of organization 2. Effective use of resources (energy, materials). 2. Open and nondiscriminatory bidding. 2. Ensuring the safety of products and services 2. Employment and education 3. Sufficient resources have been ensured and the monitoring and enforcement of the legislation governing the operation is ensured 3. Anti-discrimination (race, religion, sex, etc.) principle 3. Occupational health and safety. Sufficient preventive and corrective procedures. 3. Climate change management and adaptation 3. Respect for contracts and access rights. 3. Sustainable consumption: recycling, reuse Energy efficiency, waste minimization 3. Supporting local growth and innovation. Promoting cooperation in the market. 4. The risks of the supply chain have been identified, mapped out and taken into account in procurement policy and procedures 4. Freedom of expression and the principle of respect for the local culture. 4. Training of employees and consultation procedures. 4. Consideration for biodiversity. Respect for conservation areas. 4. Promote responsible policies throughout the procurement and supply chain. Open and inclusive communication. 4. Consumer Service: Support and complaints procedures, awareness and education. 4. Development of the local community. Financial support and cooperative projects.

14 Helpful topics for evaluation Managing the procurement process means how the own unit has taken responsibility aspects into its own operations and decision-making. How to track legislation? How to find out the company's own capabilities for accountability? How are risks identified and sought to be reduced in procurement? Human rights and ethical considerations mean that the risks of human rights and labor to the acquired product or service have been identified, child labor and discrimination and animal welfare? And how can these risks be reduced in procurement? Job-related aspects mean that the risks associated with occupational health and safety, labor law and freedom of organization are related to the product or service being acquired? And how can these risks be reduced in procurement? Environmental considerations are related to how the risks of contamination, waste utilization, or nature conservation are related to the product or service being procured? And how can these risks be reduced in procurement? Fair policies mean how the risks of corruption, lack of open competition or respect for contracts relate to the provision of the product or service being acquired? And how can these risks be reduced in procurement? Consumer considerations mean how product safety, recyclability, or consumer support risks are related to the product or service being procured? And how can these risks be reduced in procurement? The social impact of the activity means what kind of impact does the effect of producing a product or service have for the region's employment, business location and other conditions of operation? And by what means can impact be increased in procurement?

15 Using the Responsibility Assessment Tool Estimated during the preparation phase of the procurement, the weight of the effects of the acquisition on accountability categories A. - G. and on these aspects ( ) with traffic lights. Green means that the procurement in question does not/will not have a weighted impact on the column's responsibility aspect. Yellow means that the procurement in question has/will have a weighted average effect on the column's responsibility aspect. Red, it means that the procurement in question has/will have a weighted impact on the column's responsibility aspect.

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17 Making an Responsibility Assessment and Plan For example procurement, meal services

18 Responsibility Assessment Case, Procurement of Meal Services A. Managing the procurement process B. Human rights and ethical considerations C. Labor law considerations D. Environmental considerations E. Fair working principles F. Consumer aspect G. The social impact of the activity 1. Responsibility has been incorporated into the strategy and management system 1. The human rights risks of the supply chain have been identified 1. Respect for labor law and local and industry collective agreements 1. Prevention of contamination (water, soil, air). 1. Principles and practices to prevent corruption 1. Honest marketing and communication 1. Enabling access by local actors 2. Responsibility has been taken into account in preparing procurement and communicating in the supply chain 2. The principles of the social responsibility chain (ILO) have been identified and incorporated into the requirements 2. Workers' freedom of organization 2. Effective use of resources (energy, materials). 2. Open and nondiscriminatory bidding. 2. Ensuring the safety of products and services 2. Employment and education 3. Sufficient resources have been ensured and the monitoring and enforcement of the legislation governing the operation is ensured 3. Anti-discrimination (race, religion, sex, etc.) principle 3. Occupational health and safety. Sufficient preventive and corrective procedures. 3. Climate change management and adaptation 3. Respect for contracts and access rights. 3. Sustainable consumption: recycling, reuse Energy efficiency, waste minimization 3. Supporting local growth and innovation. Promoting cooperation in the market. 4. The risks of the supply chain have been identified, mapped out and taken into account in procurement policy and procedures 4. Freedom of expression and the principle of respect for the local culture. 4. Training of employees and consultation procedures. 4. Consideration for biodiversity. Respect for conservation areas. 4. Promote responsible policies throughout the procurement and supply chain. Open and inclusive communication. 4. Consumer Service: Support and complaints procedures, awareness and education. 4. Development of the local community. Financial support and cooperative projects.

19 Procurement Process and Responsibility Considerations PRODUCT - SUPPLIER Planning Integration of responsibility in the procurement Managing risks and opportunities Determination of responsibility criteria Involvement of operators in the chain (customers, suppliers, etc.) Inclusion of responsibility requirements in the specifications Choice of Supplier Management of Supplier Evaluation and tender procedures for suppliers Evaluation of suppliers' capabilities (prequalification) Mapping out risks Self-evaluations Competitive bidding Choices and contract procedures Management of the Supplier during the contract period Management of procurement contracts Principles of operations and assessment: KPIs, communication procedures, meeting practices, audits Operations in accord with contracts and other requirements Development and its impact (from compliance to Impact) Procedures for defects and error correction procedures Contract audits and contract termination procedures A. Management of the procurement process B. Human rights and ethical considerations C. Labor law considerations D. Environmental considerations E. Fair working principles F. Consumer aspect G. The social impact of the activity

20 How to follow-up and evaluate? Ex ante Data gathering Post analysis Using the information for future procurements 20

21 City of Vantaa Group Services, Procurement Center Kielotie 14 A, Vantaa