From the book: Green Technology Strategies

Procurement

This week we will look at how to include green ICT requirements in procurement of products and services. Previously we looked at strategies for efficiently using ICT equipment to minimise energy and materials use. But much of the environmental benefit comes about by selecting the right products and services. How do you ensure that your hardware, software and services suppliers provide green products?

The Wikipedia defines Procurement as:

"... the acquisition of goods and/or services at the best possible total cost of ownership, in the right quantity and quality, at the right time, in the right place and from the right source for the direct benefit or use of corporations, or individuals, generally via a contract."

Large organisations, will typically have complex procurement policies with detailed processes. Economic analysis methods such as cost-benefit analysis or cost-utility analysis, may be used for large scale purchases, particularly by government organisations.

Green ICT considerations may be included in each stage of the calculations. Costs will be effected where, for example, higher efficiency power supplies are required. Consideration might be given to purchasing smaller quantities of equipment to be used more intensively. The equipment may need to be to a higher quantity, to allow for more intensive use, as well as requirements for materials to meet recycling and hazardous materials standards. The source of the equipment may play a larger role with the energy use in delivery being considered. As well as the direct benefit of the product to the organisation, its effect on the environment and the community generally needs to be considered. Purchasing arrangements may go beyond conventional legal contracts and involve long term partners, 'co-destiny' suppliers which commit one organisation to another.

ICT procurement is typically indirect procurement. That is ICT procurement activities concern "operating resources" for the organisation's operations. This contrasts with direct procurement, where raw materials are used in making some other product.

Procurement process

Procurement may involve a Tendering process, with potential suppliers submitting bids. Usually the potential supplier which submits the lowest bid which complies with the requirements is accepted. However, other criteria in addition to price may be used to assess tenders. Green ICT requirements may be included in the requirements and/or could be included in the criteria used for assessment.

Procurement steps

  1. Information Gathering: There may be a search conducted for potential suppliers and to see what products are available. A formal Requests for Information (RFI), may be issued, describing what purchases are intended and asking for information from suppliers. This might be used to see what environmental standards suppliers are able to supply to.
  2. Supplier Contact: A Requests for Quotation (RFQ) or Requests for Tender (RFT or ITT) may be advertised publicly, or sent to a limited set of suppliers suppliers.
  3. Background Review: The products or services offered are assessed against criteria set down in the RFT. This may require examination of claims of conformance to standards by the supplier or testing of samples of the equipment or servcie. In the case of Green ICT this might require testing power consumption of equipment, or verifying claims of conformance with independent standards, or tests conducted with independent test labs.
  4. Negotiation: Negotiations are undertaken, usually with one selected supplier or a short list.
  5. Fulfilment: An order is made and payment made. For a large order the payments may be staggered.
  6. Consumption, Maintenance and Disposal: The performance of the supplied product and after sales service is assessed. For ICT products there are usually maintenance contracts and the supply of maintenance, ensuring an ongoing relationship with the supplier. Green ICT considerations may include provision for return of the product to the supplier at the end of its useful life for disposal or refurbishment.
  7. Renewal: At the end of the supply contract, the supplier's performance is evaluated. With ICT equipment is likely that further equipment will be ordered from the same supplier, if satisfactory.

Green Procurement Policy

Large organisations are likely to have a formal Corporate Sustainability or Green Procurement Policy intended to apply to products and services, including ICT. The policy will include a general statement of aims, including a commitment to improve the environment, reduce the environment impacts and promote sustainable development. This is done by integration of environment performance in the procurement process.

As an examaple of green procruement Tata Consultancy Services Limited provide on their web site:

Such policies can have different levels of enforcement. As an example the Australian Government's Measures to Support Environmentally Friendly ICT includes a requirement for all departments and agencies to purchase office equipment that complies with the US Environment Protection Agency Energy Star standard. However, there is no requirement for reporting compliance, nor has this been covered in audits of agency purchasing.

The Queensland Government's Operational Concept - Sustainable procurement include a requirement for agencies to set sustainability targets and report against them annually, but leaves the actual targets to the agencies to set.

Energy Efficiency in Government Operations (EEGO)

The Australian Government's Energy Efficiency in Government Operations (EEGO) Policy (EEGO) was adopted in 2006 and aims to improve energy efficiency of Government operations.The policy requires annual reporting of energy performance by agencies and portfolio energy intensity targets by 2011. While use of an Australian version of the US EPA Energy Star program is required for appliances, the policy is in the main referring to buildings, and so doesn't cover desktop PCs and other ICT equipment in buildings. The policy refers to the Department of the Environment, Water, Heritage and the Arts (DEWHA) undertake scoping studies to identify energy efficiency opportunities for computer centres, but there are no reports on progress with this.

Department of the Environment Tender

A Department of the Environment, Water, Heritage and the Arts (DEWHA) RFT for Desktop PCs and servers included extensive and detailed environmental requirements (RFT 0708-705 — Provision of Desktop, LAN, Helpdesk, and Midrange Services - Release, Department of the Environment, Water, Heritage, 7 August 2008). Suppliers were required to include details of power consumption, cooling requirements and ewaste disposal. The RFT included mandatory Energy Star specifications and a silver rating, on the Electronic Product Environmental Assessment Tool (EPEAT™) specifications.

The department warned they may test equipment in the tender process or later. The supplier was required to commit to report annually on minimising environmental impacts, specify packaging waste specifications and look at recyclable and biodegradable packaging, as well as have a take-back program for packaging. Tenderers are required to also comply with, the guideline Green Marketing from the Australian Competition & Consumer Commission in 2008.

Apart from energy efficiency requirements, the tender required printers which can use 100% recycled content paper (but without any specific standard for paper being specified).

The Australian Department of Innovation, Industry, Science and Research Request for Tender for "Supply and maintenance of IT equipment" (August 2008) included similar environmental standards to the DEWHA RFT, but did not make energy saving mandatory. Tenderers were required to detail the heat output and power consumption of desktop PCs and Laptops configurations and how the claims were independently verified.

A later Australian National Audit Office (ANAO) Request for Tender for IT Hardware included energy saving requirements for up to 400 notebooks and 100 desktops computers (ATM ID ANAOCM2008/1071, 15-Aug-2008). The tender document included a requirement to supply details of "Energy Rating" with: Energy Star Compliant, EPEAT rating or similar, Energy Consumption. Details of energy consumption was required for computers when: On and Operating Sleep, Standby, Switched Off but power point on. However, the energy efficiency rating was not a mandatory requirement of the tender.

US Government Computer Power Management Purchasing Policy

The Energy Policy Act of 2005 requires US federal agencies to procure products, including ICT, complying to the US EPS ENERGY STAR. Executive Order 13423 requires the agencies to activate the "sleep" features of ENERGY STAR on computers and monitors and requires agencies to buy EPEAT* registered products.

References:

Read now:

  1. Procurement, The Wikipedia, 24 December 2008, at 17:28
  2. Green Procurement Policy, Tata Consultancy Services Limited, 2008.
  3. Measures to Support Environmentally Friendly ICT, Australian Government Information Management Office, August 2005.
  4. Operational Concept — Sustainable procurement, State Procurement Policy, Queensland Government (undated).
  5. Australian Government Tendering for Energy Efficient Computers, Tom Worthington, August 07, 2008.
  6. Product Purchasing and Computer Power Management for Federal Agencies, US EPA (undated).

Questions:

  1. Procurement process in your organisation: Describe the Procurement process in your organisation, or or an organisation you are familiar with (maximum three paragraphs). Is there a Tendering process, with formal assessment criteria?

  2. Green Procurement Policy: Describe the Green Procurement Policy of your organisation. If there is no such policy, outline what could be in such a policy (maximum three paragraphs).

  3. Australian government environmental criteria: Three Australian government agencies issued Requests for Tender in 2008 for ICT equipment, with slightly different environmental criteria. Why do you think this happened? Would it be feasable for your organisation to use the same criteria as the Australian Government? (maximum three paragraphs).

From the book: Green Technology Strategies

This book is about how to reduce carbon emissions and achieve other environmental benefits by using computers and telecommunications technology. It is designed to be used within an online course for professionals, using mentored and collaborative learning techniques.

Title: Green Technology Strategies: Using computers and telecommunications to reduce carbon emissions

Copyright © , 2009

Publisher: Tomw Communications, PO Box 13, Belconnen ACT 2617, Australia. Website: http://www.tomw.net.au/green

New edition available: ICT Sustainability: Assessment and Strategies for a Low Carbon Future, September 2011.

These notes are used for the courses:

  1. Green ICT Strategies (ACS25): offered in the Postgraduate Program of Open Universities Australia and available from 2010 to students of Curtin University, Griffith University, Macquarie University, Monash University, RMIT University, Swinburne University and the University of South Australia,

  2. Green Technology Strategies: offered in the Computer Professional Education Program, Australian Computer Society (first run as "Green ICT Strategies" in February 2009), and

  3. Green Information Technology Strategies (COMP7310), in the Graduate Studies Select program, Australian National University (first run July 2009).

The notes were first published as an electronic and paperback book in 2009 (Green ICT, Tom Worthington, Tomw Communications, 2009). Students can download or print their own copy of the e-book from the course learning management system, which is likely to be more up to date.

Green Technology Strategies: Using computers and telecommunications to reduce carbon emissions by Tom Worthington is licensed under a Creative Commons Attribution-Share Alike 2.5 Australia License, except for institutions covered by a Copyright Agency Ltd Statutory Licence.