SUSTAINABLE PUBLIC PROCUREMENT State procurement as a lever
SUSTAINABLE PUBLIC PROCUREMENT State procurement as a lever of change in the Western Cape” 13 November 2017
What is sustainable procurement? SPP is “a process whereby public organizations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life-cycle basis in terms of generating benefits not only to the organization, but also to society and the economy, whilst significantly reducing negative impacts on the environment” (UNEP) © Western Cape Government 2012 | 2
What is sustainable procurement? Optimizing value-for-money across the lifecycle • Life-cycle thinking, whole-life costs • Benefits to society and economy • Reduced environmental impact © Western Cape Government 2012 | 3
What is green procurement? Across the project life cycle Material Production Raw Material Extraction Recycling/ Reuse Manufacturing Construction and Occupation Disposal End of life © Western Cape Government 2012 | Briefing to EXCO 4
SDG’s Goal 12: Ensure sustainable consumption and production patterns “doing more and better with less” increasing net welfare gains from economic activities by reducing resource use, degradation and pollution along the whole lifecycle, while increasing quality of life. Target 12. 7 Promote public procurement practices that are sustainable, in accordance with national policies and priorities © Western Cape Government 2012 | 5
Legal setting and mandates • The Constitution of the Republic of South Africa (1996): - Section 217 (1) states that procurement systems must be: Fair; Equitable; Transparent; Competitive; and Cost effective Section 217 (2) states that procurement may provide for: Categories of preference; and protection or advancement of persons or categories of persons disadvantaged by unfair discrimination. • The Public Finance Management Act (1999): - Efficiency of economic allocations of paramount importance Guards against corruption • The Municipal Financial Management Act (2003): - Each municipality to have and implement its own Supply Chain Management Policy. Bids may be assessed on ‘value for money’ – open to interpretation • Preferential Procurement Policy Framework Act (2000) &BBBEE Code (2003, 2014): - Procurement decisions are influenced by BBBEE. • Local Procurement Accord (2011): -Up to 75% localisation of public/private procurement © Western Cape Government 2012 |
Legal setting and mandates • Provincial Treasury implementing National Department of Trade and Industry: -Implement 75% local content in procurement by 2019 (Local Procurement Accord 2011) • Western Cape Government: - Position the Western Cape as the green economic hub of Africa and be the lowest carbon province. WCG and City of Cape Town, as major property owners and users of electricity and water, to take the lead in promoting resource efficiency. (Green is Smart: Western Cape Green Economy Strategy Framework 2013) • Western Cape Department of Human Settlements : - Allocate 30% of budget to the procurement of sustainable technologies for housing • Western Cape Department of Transport and Public Works: - Ensure all new WCG accommodation to be certified to a minimum of a 4 Star Green Star rating (Transport and Public Works Annual Performance Plan 2015/16) © Western Cape Government 2012 |
The need for SPP from the state • Government is one of the largest consumers in the economy, spending between 45% - 65% of the annual budget on procurement (in SA 29% of GDP). • With this great purchasing power, comes the responsibility to choose materials & products not only for their functionality, affordability & durability but also considerations for environmental & socio-economic benefit to the municipality & country. • State-subsidised housing & infrastructure receives a significant portion of government funding & is therefore a strategically important focus for green public procurement. © Western Cape Government 2012 | 8
Aims and principles of sustainable procurement Aims • Improved sustainable use of resources • Increased ecological resilience • To enable sustainable livelihoods with increased economic inclusion • Reducing energy consumption Principles • Reducing water consumption • Minimising waste generation • Reducing greenhouse gas emissions • Improving quality of life and dignity for beneficiaries (safety, health and access to services and economic opportunities) • Increasing the reuse and/or the recycling of resources • Maximising economic inclusion, especially for SMMEs and local subcontractors © Western Cape Government 2012 | 9
The need for SPP from the state SUSTAINABLE PUBLIC PROCUREMENT SPP Focus areas LOCALISATION SUPPORT FOR PREFERENTIAL ETHICAL GREEN /LOCAL SMALL, PROCUREMENT CONTENT MEDIUM AND & BBBEE NT MICRO(COVERING ENTERPRISES LABOUR PRACTICES & HUMAN RIGHTS) Cross-cutting governance interventions support SPP. These include: National and Western Cape Government Strategic Procurement Strategy; E-Procurement; Professionalisation of Procurement Staff; and Transversal SPP Working Group. © Western Cape Government 2012 | 10
Procurement cycle & sustainability Identify the need Market consultations Define pre-qualification criteria © Western Cape Government 2012 |
Procurement cycle & sustainability Write technical specifications Issue the tender Evaluate the tender © Western Cape Government 2012 | 12
Procurement cycle & sustainability Award the contract Design contract conditions Monitor and evaluate © Western Cape Government 2012 | 13
Human settlements - framework In the Western Cape, climate change is expected to result in higher temperatures, reduced rainfall & more severe storm events. © Western Cape Government 2012 | Briefing to EXCO 14
Karl Bremmer hospital The major innovations which caused the Karl Bremer building to receive 5 Green Building Stars: • Blackwater Treatment Plant • Treated Blackwater Supplying Recycled Water to HVAC Cooling Towers • Harvesting of HVAC Bleed-off for Re-use • 1 -in-100 Year Storm water Infiltrated into the Ground Due to the above innovations, 100% of all water (waste water and storm water) is either re-used onsite or infiltrated to groundwater (i. e. no water leaves the site in any municipal infrastructure). © Western Cape Government 2012 | 15
Mountain view housing project A study in 1951 by the National Building Research Institute developed a low cost block shaped house (nicknamed the “ 51/6”) to meet the minimum living standards of the Apartheid Government for “non-Europeans” which Reconstruction and Development Programme homes still emulate. The Mountain View housing project attempts to break the conventional mould by designing an “unconventional” RDP type house that fits within the 40 m 2 minimum requirements. © Western Cape Government 2012 | 16
Key features The use of local stone allows: • The houses to blend into the surrounding natural environment. • Provide a thermal mass and good insulation properties. • Stone is heat resistant and does not burn, which creates good fire protection. • The thick 390 mm stone walls create a bay window with a seat. • The houses look upmarket and not a typical subsidy housing development. © Western Cape Government 2012 | 17
Job creation • Stone construction is extremely labour intensive and created jobs for many of the unemployed residents. • Additional funding via the City’s Expanded Public Works Programme has allowed approximately 497 people to be employed in the past 12 months. • 30 local trainee stonemasons (including 5 women) have undergone an intensive 6 month training course and now form part of the main construction team. • An official certification for stone work is under consideration. © Western Cape Government 2012 | 18
Total of 543 housing units provided © Western Cape Government 2012 | 19
Knysna municipality - Oupad © Western Cape Government 2012 | 20
Knysna - Oupad • 250 houses • 4 Ward based contractors (2 women) using locally sourced labour • R 5500 saving per unit • Govan Mbeki award winner - 2014 © Western Cape Government 2012 | 21
Projects Environmental, economic and financial Implications of sustainable procurement in state-subsidised housing As part of the process to improve the environmental impact of state-subsidised housing, there was a need to learn from projects that have aimed to incorporate environmental considerations into the design and construction of statesubsidised housing. • • • Witsand (IEEECO) project Delft Symphony 3 and 5 Kleinmond project Steen Villa Social Housing Complex Swartland Mosselbay Overall, the business case in each project was achieved, at least to some extent, with the most successful project evaluated being the Kleinmond Eco-housing project, followed closely by the Steen Villa Social Housing Project. © Western Cape Government 2012 | 22
Examples of issues addressed © Western Cape Government 2012 | 23
Examples of issues addressed © Western Cape Government 2012 | 24
Life cycle costing © Western Cape Government 2012 | 25
Life-cycle costing © Western Cape Government 2012 | 26
Life-cycle costing © Western Cape Government 2012 | 27
Examples of issues addressed © Western Cape Government 2012 | 28
PBS - a new approach Performance-Based or Functional Specifications • A PBS or functional specification describes a performance or the functionality of what procurers and end users seek to buy, rather than the product or service in itself. In other words, the specification will outline the what the end users seek to realize but not how it should be realized. © Western Cape Government 2012 | 29
Co. CT - Economic Development Department CITYWIDE OUTCOMES BASED WORKFORCE DEVELOPMENT PROGRAMME: • Education and training: The service provider must provide evidence of placement onto an accredited course in the form of a student number and/or registration papers. The service provider would need to provide proof i. e certifcate upon completion of or retention in an accredited course. For learnerships and apprenticeships we will require a signed, headed letter or contract from the institution or company providing the placement. • Placements: For voluntary work experience placements we will require a signed, headed letter from the organisation offering the position. For job placements we will require an employment contract as evidence. • Self employment: If residents become self-employed then the service provider will need to provide documentary evidence of business activity/ income generation i. e. CIPC registration, informal trading permit, SARS registration, bank statements, etc © Western Cape Government 2012 | 30
Implementing sustainable procurement Engaging with Provincial and National Treasury • • • Key lever for implementing sustainable procurement in existing procurement processes is the use of ‘Functionality’ (pass or fail) in tender documentation and evaluation processes. Necessary to develop and/or find workable methods for life-cycle costing. Due to the complexity of this it is necessary for National Treasury to provide standards and guidance on methods and values for life-cycle costing. Current process……… • • DEDAT, DEA&DP, PT presently collaborating on the development of departmental procurement frameworks. Framework to address social and environmental considerations Need to engage NT to investigate wasteful expenditure stipulations in MFMA Stakeholder engagement required due to limited PM expertise in sustainability. © Western Cape Government 2012 | Briefing to EXCO 31
Implementing sustainable procurement Current process continued • WCG DEA&DP is working with The International Institute for Sustainable Development (ISSD) to develop a Sustainable Public Procurement (SPP) guidebook currently due for launch. • Smart. Procurement is a programme aimed at developing a best practice guideline based on case study research with a strong local government focus on infrastructure and asset management. © Western Cape Government 2012 | Briefing to EXCO 32
Big ticket items for local procurement accord © Western Cape Government 2012 | 33
Designated local content sectors © Western Cape Government 2012 | 34
GPG Township Economic Revitalisation programme 10 000 9 000 8 268 7 614 8 000 7 000 5 679 6 000 5 000 3 804 4 000 3 014 3 000 2 000 1 968 1 072 642 2014/15 2015/16 Registered © Western Cape Government 2012 | Briefing to EXCO 2016/17 2017/18 Q 1 Utilized 35
GPG Township Economic Revitalisation programme 45. 0% 40. 0% 35. 0% 28. 0% 30. 0% 23. 3% 25. 0% 18. 0% 20. 0% 10. 0% 5. 0% 14. 3% 14. 1% 12. 0% 15. 0% 6. 0% 4. 5% 0. 0% 2014/15 2015/16 2016/17 Target © Western Cape Government 2012 | Briefing to EXCO 2017/18 Q 1 2018/19 Actual 36
Secure Engage Confirm Buy-in Commitment Inactive Suppliers (2100) Perfect Your Pitch Bootcamp Phase 1 Attendance Registers (Checkpoint) Expression of Interest signed? (Checkpoint) Programme Supplier Selection? Supplier Development Agreement Signed (Checkpoint) Deliver Development Support Think-Be-Do: Ideation Think-Be-Do: Incubation © Western Cape Government 2012 | (160) (320 ) Project Briefing Session Expression of Interest signed? (Checkpoint) Programme Placement (regrets) No Further Action in Project Scope – Referral to alternative support agents Think-Be-Do: Build & Grow Think-Be-Do: Grow & Scale Active Suppliers Supplier Development Agreement Signed (Checkpoint) NXTMove Partnering for Growth Business Optimization Drop outs Business Edge Leadership & Governance
Thank you
Contact Us Gray Maguire Environmental Economy Directorate Tel: 021 483 2566 Fax: 021 483 5496 Gray. maguire@westerncape. gov. za www. westerncape. gov. za
- Slides: 39