ICT Sustainability

Procurement

Environmental benefits can come about by selecting the right ICT products and services. How do you ensure that your hardware, software and services suppliers provide green products?

The Australian Government's Commonwealth Procurement Guidelines (2008) stated that:

"Procurement encompasses the whole process of acquiring property or services. It begins when an agency has identified a need and decided on its procurement requirement. Procurement continues through the processes of risk assessment, seeking and evaluating alternative solutions, contract award, delivery of and payment for the property or services and, where relevant, the ongoing management of a contract and consideration of options related to the contract."

Large organisations, will typically have complex procurement policies with detailed processes. Some of the Procurement Principles considered by the Australian Government were: Value for Money, Competition, Efficient and Effective Use of Resources, and Accountability.

Sustainability 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, 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 Request 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) 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 service. 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 example of green procurement Tata Consultancy Services Limited (TCS) provide a Green Procurement Policy (2011) and Corporate Sustainability Report 2017-2017 (2017).

Policies can have different levels of enforcement. The Queensland Government's Operational Concept - Sustainable procurement (2008) 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 (2006) aims to improve energy efficiency of Government operations.The policy required annual reporting of energy performance by agencies and portfolio energy intensity targets from 2011.

While use of an Australian version of the US EPA Energy Star program is required for appliances, the EEGO 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

The Australian Department of the Environment, Water, Heritage and the Arts issued a request for tender for Desktop PCs and servers included extensive and Provision of Desktop, LAN, Helpdesk, and Midrange Services (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.

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 (2008) included similar environmental standards to the Environment tender, 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 (2008) included energy saving requirements for up to 400 notebooks and 100 desktops computers. 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.

Now Read

1. Procurement Principles, Department of Finance and Deregulation (2008). Note that these were replaced by the Commonwealth Procurement Rules in 2014.
2. Green Procurement Policy, Tata Consultancy Services Limited (2011d)
3. Operational Concept - Sustainable procurement, Queensland Government (2008).

Questions

1. Procurement process in your organisation: Describe the Procurement process in your organisation, or or an organisation you are familiar with. Is there a Tendering process, with formal assessment criteria? Describe any Green Procurement Policy in your organisation. If there is no such policy, outline what could be in such a policy.

2. 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 feasible for your organisation to use the same criteria as the Australian Government?

Next: Energy Star Program and Quality Management.

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About the book: ICT Sustainability: Assessment and Strategies for a Low Carbon Future