Guidance on Green Public Procurement from the Emerald Isle
October 2021What has happened? Why does it matter?
In September, the Irish Environment Protection Agency (“EPA”) released detailed guidance for public sector bodies on Green Public Procurement (“GPP”). This is seen as an important tool in Ireland transitioning to a sustainable and carbon neutral economy and society. The guidance supports a more specific objective of ensuring that by 2023, all procurement using public funds includes green criteria.
The guidance comprises a users’ guide[1] and a series of advice notes tailored to ten specific priority areas or sectors where products and services have a significant environmental impact[2]. Building on previous papers from the Irish Government and EU Commission, it summarises the policy and legislation and legal context as well as providing step-by-step advice on implementing GPP criteria.
More importantly, the guidance package is a practical toolkit. Specific selection criteria, specifications and award criteria are proposed for public bodies, designed to elicit greener solutions from the market. The criteria are designed to be inserted directly into tenders and contracts and will doubtless be of use to public buyers.
Incorporating the GPP into Irish procurement procedures
In the EPA’s view, GPP criteria should be incorporated into all stages of the procurement process. Even prior to tender launch, market engagement is encouraged to canvas opinion on available green solutions and appropriate environmental labels and standards. Purchasers are recommended to talk to subcontractors, second tier contractors who are often the parties responsible for delivering the environmental aspects of the contract.
Specifications set out the functional requirements for the contract, usually by reference to the detailed characteristics of the deliverables being purchased. The guidance states that for appropriate procurements, the performance or outcome-based specifications (as opposed to technically detailed specifications) may be helpful in allowing suppliers to innovate to achieve the desired outcome. However, outputs should be fashioned so that contractors do not overlook environmental considerations.
Selection or exclusion criteria can be used too. These can be calibrated to allow the authority to weed out bidders who do not meet minimum requirements linked to environmental objectives. EU procurement law already mandates exclusions for bidders which have breached certain environmental legislation[3] or have presented a bid which is cheaper because it would contravene environmental regulations[4].
GPP considerations can be incorporated to competitive shortlisting processes in which, say, only the three highest scoring bidders are invited to tender. The guidance suggests points can be awarded in those for such factors as an organisation’s ability to apply environmental management measures.
Award criteria are used to score the merit of the bids received in a tender process. They are published in the tender documents and weighted. The EPA guide says Life cycle costs (LCC) should be an important consideration in the scoring system. Numerous LCC tools and methodologies are proposed in the guidance. Examples are given of the economic benefits of an LCC approach. GPP factors should also be set out as a relevant factor when examining bidders’ method statements.
At the contracting stage, environmental KPIs should at the very least be considered. GPP commitments given in tenders should be worked into the contract and kept under review.
Suitable evidence and greenwashing
The EPA Guide states that it is at the tender evaluation stage that GPP criteria are put to the test:
“[a]n increasing number of companies make environmental claims about their products and services, and there is a growing list of standards, certification schemes and labels which aim to give credibility to such claims. Procurers are often called upon to distinguish promotional or unfounded claims from bona fide evidence. GPP requires the application of these skills in order to avoid ‘greenwash’ and identify those products and services which genuinely meet criteria targeting environmental characteristics.”[5]
For these reasons, the guidance provides assistance in terms of the evidence buyers should look for when considering claims made by suppliers. Frequently, there will be an applicable label or accreditation relevant to the subject matter of the procurement. In circumstances where that is not available, guidance is given on alternatives. In other words, tenderers must be ready to back up any green claims with appropriate proof or risk being dumped out of the competition.
GPP, office buildings and construction methods
Construction of office buildings is identified by the EPA as one of the ten priority areas. The guidance note entitled “Office Building Design, Construction and Management” will be of interest to businesses involved in construction in Ireland[6].
There has been an increase in office capacity coming online in Ireland, possibly in response to an uptick in demand after Brexit. Savills has reportedly said that enough space to accommodate 30,000 people will be completed in Dublin this year alone[7]. The guidance note contains specific recommendations for specifications, selection and award criteria. Whilst directed towards office construction, it is likely to be influential in other public works projects as well.
The following are some examples of recommendations:
- Selection criteria – project managers may be required to have experience of building contracts which have met or exceeded clients’ environmental performance requirements. The design team may be required to have skills in Building Environment Monitoring Systems (BEMS) and evidence of projects where they exceeded minimum environmental standards.
- Specification – the tenderer may be required to submit evidence that its design would achieve a Building Energy Rating of A1 (or A2), as calculated using the EN 15603 standard. The ventilation system should be required to have a quality rating of at least IDA 2 according to EN 15251 or equivalent.
- Award criteria – a points based question could assess and give credit for design which would exceed the minimum energy rating set out in the tender documents;
- Timber – the specification could mandate that all timber used be legally sourced in accordance with Regulation (EU) 995/2010 (which requires timber’s source be traceable). This can be flowed into the contract with obligations for the supplier to provide evidence of origin if requested to do so;
- Demolition waste audit and management plan – a minimum threshold of non-hazardous waste (55% or more) should be recycled;
- Building Environment Management System – contract clauses could also require the successful bidder to provide evidence that BEMS had been carried out, linked to penalties for noncompliance.
Guidance issued in relation to the other priority areas may also be relevant to construction projects. For example, businesses may wish to review the EPA’s recommendations in relation to transport, indoor and outdoor lighting, heating equipment and energy related products. Contractors involved in building data centres will need to familiarise themselves with the note on ICT projects[8].
Comment – get ready for green
The Irish guidelines are detailed and comprehensive. In our view, they outstrip the UK’s efforts to buy green, even allowing for the UK’s recent procurement policy notice on climate change[9]. The guidelines are likely to have a significant influence on procurers of medium and high value projects related to the ten priority sectors.
However laudable and well-intentioned, GPP criteria can only work within the constraints of EU and Irish procurement law. They must not be disproportionate (relative to the scale or subject matter of the project) nor directly or indirectly discriminatory. Suppliers should, as soon as they receive the tender documents, consider whether any environmental factors would put them at an unfair competitive disadvantage. Under Irish procurement law, bid protests must usually be made within 30 days of knowledge of awareness of the underlying facts[10]. Suppliers cannot sit on their hands, see how things turn out and then decide to raise a grievance.
Suppliers should also keep a look-out for market engagement exercises with a view to shaping the possible GPP content of future tenders.
While the notes are addressed to public buyers, suppliers should take their own steps to keep pace with policy direction. They should consider whether any adjustments are needed to their operations to meet the likely future requirements. Relevant questions include:
- do their project managers and design teams have the necessary experience in environmentally friendly projects? If not, new hires may be needed!
- would previous designs meet the new requirements for energy efficiency? Is CPD required to get teams up to speed to address these needs?
- are there any labels or accreditations which are likely to be specified in light of the new guidelines? Does the company already have these and, if not, how could they be applied for? Do they have any alternative qualifications which should be considered as equivalent?
- if they are in the business of fit out, are their fixtures and fittings sufficiently environmentally friendly?
- are their demolition contractors able to deliver on recycling requirements?
Finally, businesses must be careful to ensure that their environmental claims can be justified. “Greenwashing” is an area where regulators are cracking down, as seen in a recent communique from the UK Competition and Markets Authority[11]. Making initial claims at the tender stage which turn out to be false or misleading could lead to an early termination of the contract or even debarment from future procurements.
On the other hand, the acceleration towards more sustainable procurement presents an opportunity. By adapting to the increased demands of the initiative, businesses can enhance their reputations and get ahead of the competition. To that end, we would be pleased to assist any supplier or public buyer wishing to understand how the new guidance will affect them and understand how they can turn the situation to their advantage.
[1] “Green Public Procurement: Guidance for the Public Sector”, available here.
[3] Contractors must comply with applicable environmental obligations set out in Irish law, EU law or certain international conventions on protection of the ozone layer, persistent organic pollutants and treatment of hazardous chemicals or waste (Article 18.2 of EU Directive 2014/24/EU on Public Sector Procurement)
[4] see Regulation 69 of EU Directive 2014/24/EU on Public Sector Procurement
[5] P.27 of EPA Guide
[7] https://www.independent.ie/business/commercial-property/office-space-for-30000-workers-to-be-built-in-dublin-this-year-as-post-covid-return-looms-40631369.html
[8] All of these guides are available here.
[10] See Regulation 7 (time limits for applications to the Court) of S.I. No. 130/2010 – European Communities (Public Authorities’ Contracts) (Review Procedures) Regulations 2010.
Download PDF
