Background
The Hague is one of the four largest municipalities in the Netherlands with approximately 525,000 inhabitants. The municipality of The Hague wants to shape the City’s sustainability and set an example including by pursuing a sustainable purchasing policy.
The city is working towards becoming a climate-neutral municipality by 2030. In the coalition agreement 2018-2022 ‘City of opportunities and ambitions’, sustainability is one of the key themes. In addition to environmental issues, The Hague’s policy on sustainable procurement pays a lot of attention to Social Return, SME-friendliness, and innovation.
The Hague 2016 Policy Rules on Social Return position Social Return as an instrument that gives shape to social objectives through municipal procurement policy. The municipality does this by strategically combining objectives, and by using purchasing power to realise social and economic objectives together with entrepreneurs. In this way, the city provides additional employment opportunities for people distant from the labour market. It also provides companies with advice on how to implement the Social Return aspect in their tenders and helps them in finding personnel belonging to the Social Return target group.
Procurement objectives
Various teams within the municipality of The Hague are responsible for facilitating events and meetings, such as receptions, dinners, openings, and lunch buffets. If their own stock of materials for such events is insufficient or unavailable, they hire additional materials from a supplier. These include chairs, bar stools, screens and tableware. The events and meetings vary in size, duration and number of visitors; thus, the size of the supply can vary enormously.
The municipality currently has several suppliers for the provision of these materials. With this tender, the municipality wished to contract a supplier for a five year period.
In compliance with its policies, the City imposed sustainability requirements in the purchase of materials for events and related services.
Criteria used
Award criteria:
The contract was awarded to the tenderer with the most economically advantageous tender, determined on the basis of the best price-quality ratio. The maximum score was 600 for price, and 900 for quality. The price/quality ratio was therefore 40/60.
The quality criterion included two subcriteria: a) Sustainability and innovation (maximum 450 points) and b) Services (maximum 450 points).
Sustainability & Innovation: Tenderers had to describe their role in achieving sustainability and innovation, covering at least the topics listed below and leaving room for other proposals:
• The choice of materials and products when purchasing new materials;
• Emission-free transport;
• Handling of the materials at the end of the depreciation period;
• Materials used for disposable items;
• How the tenderer would ensure a sustainable and innovative approach to the implementation of the contract.
Contract performance clauses:
For the execution of the contract, the tenderer had to employ people belonging to the following categories for an amount equal to at least 5% of the value of the contract:
• Persons registered as unemployed jobseekers, irrespective of being recipients of benefits or not;
• Persons with an occupational disability benefit;
• Persons suffering from physical, mental or intellectual disability who fall under the scope of the law for social work;
• Students who are looking for an internship or workplace;
• Persons performing sheltered work as referred to in the Work and Assistance Act;
• Persons who have accepted employment with the contractor less than 12 months prior to the conclusion of the contract and who previously belonged to one of the aforementioned categories may also be placed under the scheme.
Results
The framework agreement entered into force on 1 September 2019 with a duration of three years.
The assessment of the tenders received considered the extent to which:
• The products used by the bidder are sustainable;
• The transport is carried out without emissions;
• The disposal of materials is sustainable and/or circular;
• Items are reusable, sustainable or biodegradable;
• The proposed approach to achieving a sustainable and innovative execution of the contract is realistic and plausible in the opinion of the assessment committee.
The contracting authority received seven technical offers, from small and medium enterprises based in The Hague and the surrounding area. During the procurement phase, there were no significant questions from bidders concerning the environmental and social aspects. However, the contracting authority found it difficult to verify bidders’ claims in relation to the fulfilment of social and environmental criteria. The successful tenderer was David van Schie, whose offer got maximum points (450) against the sustainability and innovation criterion. Among the other bidders, one got 360 points, three got 270 points and two got 180 points. The economic offer of David van Schie was not the best, the tender was successful because it scored very high with reference to the sustainability and innovation criterion.
To fulfil the sustainability and innovation criterion, the successful tenderer proposed:
• Materials and choice of products when buying new materials. When buying furniture, it mostly buys wood, steel, aluminium or zinc materials because they can be repaired (as opposed to plastics). It buys linen produced in Europe, and of high quality to ensure a long life. The appliances it uses have the highest available energy label.
• Zero emission transport. All their cars are electric, while vans and trucks have a Euro 6 engine. Drivers are trained to drive in a fuel-efficient way. David van Schie does its best to plan transport in an efficient way, using specific rental software that allows for the most efficient planning and routing.
• Disposal of materials. 65% of materials get a second life (internal reuse or they are sent to another country), and 30% is recycled. They buy glasses from Rebottled, a Dutch company that collects empty wine bottles and transforms them into drinking glasses.
• Use of materials for disposable articles. David van Schie only uses paper cups and wooden stir sticks. 20% of plastics that are used to protect goods during transport is recycled. The other 80% is biodegradable.
• Innovative and sustainable working method. David van Schie sorts its waste into different waste streams. They use energy efficient appliances. Goods are transported in carts and sturdy boxes that are infinitely reusable.
Environmental impacts
The environmental impacts addressed in this procurement relate primarily to road transport and furniture. According to the technical report accompanying the EU GPP criteria for road transport, the key environmental impacts, associated with the use phase of internal combustion engine vehicles (ICEV), are greenhouse gas and air pollutant emissions, and noise pollution. For furniture, the impacts are linked to sourcing of raw materials, energy during the production phase, emissions associated with adhesives and other finishes, and the disposal of furniture at its end-of-life.
The procurement was designed to encourage circular principles (quality, eco-design, material resilience, re-use, recycling), energy efficiency (ecodriving, technology, energy label) and the use of electric vehicles. The chosen solutions aim at extending the furniture’s life, and in reducing energy consumption, pollutant emissions and noise pollution. It has to be mentioned that environmental improvements in the use phase of battery electric vehicles (BEV) are mitigated by impacts in the battery production phase, such as GHG emissions, air, soil and water pollution.
In 2021 the contractor employed a person with mental disabilities for one year for the execution of the contract. This was sufficient to fulfil the obligation of the 5% of the contract value to be devoted to Social Return. The contractor is a small company which had ten employees before COVID-19. Unfortunately, the pandemic affected the company’s business, as events were cancelled. The company was forced to make five employees redundant, but they did not make redundant the person with mental disabilities. As part of their commitment to Social Return, the contractor also sponsored the Christmas meeting that the municipality organised with homeless people.
David van Schie tries to buy in a socially responsible manner, for example buying candles produced by people with a disadvantaged background as part of their supplies for events. It also supports the Made Blue Foundation to contribute to providing drinking water in developing countries. At present, as the pandemic situation has improved, the company has started receiving a lot of orders and has to employ new staff. The contract of the person with mental health problems has been renewed for another year and the company will hire three additional employees that belong to the Social Return categories. The municipality of The Hague helped the company to find employees thanks to the collaboration with the employment services of two other smaller municipalities which are closer to where David van Schie is located.
Lessons learned
They also advise procurement officers in the preparation of tendering procedures about which percentage of Social Return to apply to each procedure. This percentage varies from 2 to 7%. The contracting authority shares the following lessons learned:
• The most difficult part of the procurement process was verifying bidders’ claims about social and environmental criteria. The recommendation is to put more emphasis on the hard evidence rather than on what tenderers would plan to do, for example by requiring them to show past experience and to illustrate what they did in previous contracts.
• It is useful for a contracting authority to have in place policies on sustainable procurement, as the market is ready to respond to tenders that include both social and environmental criteria. However, the municipality of The Hague usually applies Social Return to 5% of the contract value, which sometimes is considered too high by companies. Companies often suggest applying Social Return to 2 or 2.5% of the contract value. Depending on the type of contract and of market, it might be worth considering reducing this percentage from 5% to 2.5 or 2%.
• Contracting authorities often put a lot of emphasis on the procurement phase and have large teams devoted to the preparation of tendering procedures. However, contract management has the same importance as the bidding phase and should have a similar level of human resources as the contracting teams. It is also important to have very specialised teams, with expertise in environmental and social aspects, too. The Hague has 2 or 3 resources dedicated to monitor the Social Return of 500 contracts, which is not enough.
• The Social Return Adviser encourages adaptation of a partnership approach with companies in relation to the Social Return. It is important to have a dialogue with them, to accompany and support them.
More information
For related information, please see the EU GPP criteria for Road Transport and the Technical Background Report.