Best Practice Framework Series #6: Procurement Procedures: The How and When

Even with all the ingredients, it is difficult to make a cake without a recipe. If Tools are the ingredients of a Sustainable Procurement Program, Procedures are the recipe. Once an organization develops their Tools, it is crucial that they update their Procurement Procedures to reflect how and when staff should use them.

Tailoring to Different Types of Procurement

Most often, large organizations have 3-4 methods of purchasing, including low value, tendering and quote-based, request for proposals (RFPs), and complex/project-based procurements. Each of these methods will have their own set of Procedures, and it is important that each set is adapted to reference how sustainability can be incorporated in that specific method.

1. Low value purchases are under thresholds and can be done without a competitive bid process, usually through a procurement card, purchase order (PO), or sole source. They have simple procurement processes and minimal required authorization, as they occur more frequently than other types of purchases. In Procurement Procedures, it is important to include guidance on how to implement sustainability in low value purchases; for example, using tip sheets or eco-label guides.
2. Quote-based procurement involves asking suppliers to provide a quote for their goods, services, or materials. This type ofpurchasing is used when evaluation is primarily based on cost, and the procurement has specific fixed requirements that need to be met by suppliers. For these purchases, it can help to present the supplier with your organization’s supplier code of conduct and non-negotiable ESG requirements. Supplier engagement (blog to come) is a crucial element to enable this.
3. Request for proposals (RFPs) are used for large and more complex procurements or contracts, usually above Trade Agreement thresholds – for example, IT system upgrades. RFPs include a variety of specifications and rated criteria to gain overall best value from a supplier.
4. Project-based procurement is the most complex and costly type of procurement and, in fact, is usually a series of multiple procurements associated with a large-scale project – for example, a construction project. These types of purchases are typically long term and have multiple stages/phases. To implement sustainability in these types of procurements, include contract clauses and a supplier sustainability questionnaire for organizations bidding.

Updating Procurement Procedures: A One-Stop-Shop

While Procedures can be updated more often than Policy, if they are changed too frequently, (every 1-2 years) this can become confusing and difficult for staff to follow. Ideally, sustainability can be incorporated in procurement procedures alongside any additional updates, like procurement optimization. This ensures minimal confusion for staff and reduces the quantity of training required.

Procedures, unlike Policy, don’t always need to be a formal, organization-wide document. Updating procedures can be as simple as adding a step to an existing document, or as robust as creating an entirely new one. The main goal is to ensure staff understand how sustainability is incorporated into each type of procurement and when to use sustainable procurement Tools for support.

From Top to Bottom

As we regularly state at Reeve, the 10 elements of our Best Practice Framework Series act in unison. It is helpful to understand how each element fits into the greater puzzle, and equally important to be able to distinguish between the elements. Often, Policy, Procedures, and Tools can be confused. Each of these elements depends on the others, but they are unique:

1. Policy broadly describes the purpose, or “what” an organization I committing to do through its Sustainable Procurement Program.
2. Procedures outline the steps, or the “when and where” for using Tools.
3. Tools provide guidance and actionable methods, or the “how” to consider and evaluate sustainability in procurement decisions.

Each of these elements fits into each other. Policy sets the stage, Procedures layout where sustainability will fit into procurement processes, and Tools help staff to follow Procedures and implement the Policy objectives. Thus, although the elements are distinct, they should be consistent and reference each other. In order to ensure the elements are understood, and the Tools and Procedures can be effectively referenced, it is crucial that organizations provide training for staff (blog to come).

Is your organization getting lost on your sustainable procurement journey? Contact us at info@reeveconsulting.com for support with updating your Procedures, developing Tools, and outlining a Roadmap for program implementation. Next month, come back to learn about solidifying staff’s understanding of your Sustainable Procurement Program with Training and Communications.