Procurement category: ICT

Environmental and social impacts targeted: Circular Economy, Social Inclusion

Relevant EU legislation/policy/guidance: EU GPP Criteria for Computers, monitors, tablets and smartphones (2021)

Background

The Norwegian Central Procurement Body was established in 2016 and has been part of the Norwegian Agency for Public and Financial Management (Direktoratet for forvaltning og økonomistyring or DFØ) since 2020. The DFØ helps to ensure sound financial management in Norway’s governmental institutions. 

In 2021, the DFØ, together with the Norwegian Environment Agency, adopted its new Action plan to increase the proportion of green public procurement and green innovation. This included a recommendation for Norwegian public authorities to “adapt their procurement practices to minimise negative environmental impact by promoting long product life, repairs, reuse and material recovery”.

In this context, the Norwegian Central Procurement Body approved, in February 2023, a new joint state agreement for the reuse and recycling of ICT equipment. This agreement includes services for the collection, transport, secure deletion of data and sorting for reuse or material recycling of the equipment. It is also in line with the waste hierarchy principles established by the DFØ, and ensures that purchasers and providers follow the priorities which are central to the circular economy.

Procurement objectives

During the production and use phases of materials in Electrical and Electronic Equipment (EEE) and Information and Communication Technology (ICT) products, approximately 50-90% of their life cycle greenhouse gas emissions are generated¹. The Norwegian Central Procurement Body was determined to take a circular approach in this matter and developed this call for competition to reuse and recycle the equipment used by contracting authorities around the country. This contract aims to manage ICT equipment after Public Authorities no longer need them and the end-of-life phase of these products. 

The agreement included computers, imaging equipment, cell phones, and audio-visual equipment previously used by different Norwegian contracting authorities and state-owned enterprises. The requested service included the collection, transport, data deletion and reuse or recycling of all these equipments.

^{1 European Commission (2020) Circular Economy Action Plan. For a cleaner and more competitive Europe.} 

Procurement procedure

A cross-disciplinary procurement team led the preparation of the call for competition. They conducted research, which included questionnaires and one-to-one meetings with state-owned enterprises and suppliers, an estimation of the potential environmental benefits as well as the creation of a user group consisting of representatives from state enterprises. The public organisations that developed similar tenders were consulted, and a public consultation was held in order to gain input from other potential stakeholders. Before publishing the final documents, the suggested competition criteria were shared through a public notice with all stakeholders to gain input. This procedure helped to make this call for competition more transparent and competitive. 

This collaborative approach resulted in the publication of the call for competition in November 2022 as a two-year framework agreement, with two possible one-year extensions. Out of the 190 governmental entities in Norway, 155 agreed to take part in this framework agreement. The budget allocated for the contract was 5.5 million euros for the 4-year period, for the reuse and recycling of ICT equipment (personal computers, office equipment, telecommunications and audio-visual equipment). This type of joint procedure allows the contracting authority to make financial savings and reduces transaction costs while ensuring better regulatory compliance.

The call for competition was divided into 4 lots according to the volume of equipment to be handled: National (for organisations with offices all over the country) (45%), Eastern Norway (25%), Southern and Western Norway (15%) and Central and Northern Norway (15%). A total of seven companies submitted their offers to the published call.

Requirements/clauses

By promoting reuse and repair, the contract aims to extend the lifespan of devices, reduce e-waste and consequently its negative environmental impacts. 

Regarding legal requirements, all suppliers covered by the agreement had to comply with applicable laws and related regulations, including the Pollution Control Act, the General Data Protection Regulation and the Second-Hand Trade Act. The supplier also had to have a second-hand trade licence (a “Bruktbutikkonsesjon” in Norwegian, by the start of the contract at the latest) approved by the Norwegian Environment Agency, or have an agreement with another legal recipient with permission, according to the Pollution Control Act. This second-hand trade licence ensures that second-hand, refurbished, or remanufactured products meet certain standards and are resold legally and ethically. 

Regarding export-waste regulations, the supplier had to comply with the Norwegian Waste Regulation Act, specifically with regard to the requirements for the testing, documentation and protection against damage in cross-border shipments of used electric and electronic products. Other environmental requirements included the transportation of the devices, which should be carried out (at least) with vehicles that meet Euro 6/VI emission standards.

An additional feature of this call for competition is the profit-sharing model ruling the profit on resale. When public entities no longer need ICT products, these are provided to the supplier. The supplier then deletes the data, repairs and refurbishes products as needed, and these second-hand products are then resold to the general public. The profit from the resale of the equipment is shared between the state enterprises and the supplier. The supplier is responsible for reselling the devices. When devices are resold, public enterprises receive a financial reimbursement for their disposed devices, but they do not face a loss in cases where devices are not resold. As of the first quarter of the contract, state enterprises were reimbursed a total of over 2 million NOK (or EUR 176,700) for their used devices. In cases where the devices cannot be resold, they are sent to recycling and critical materials are recuperated and reused in the production of new devices. 

To ensure better accountability and transparency, as well as to monitor the performance of the supplier, the winning contractor was also required to report on their delivery and collection services, per contracting authority, per contract area annually to ensure that they comply with the principles of the waste hierarchy.

This agreement also promoted social inclusion and in particular, the employment of people with disabilities. A clause was included to ensure that 20% of the workforce engaged through the agreement had a reduced functional capacity. 

Award criteria

The table below outlines the award criteria used in the tendering process: 

Awarding the contract

A total of seven companies submitted an offer. The winning supplier was a company specialised in reuse and recycling. As established in the profit-sharing model, the profit from the resale of reused equipment could potentially generate several million NOK are shared between the public organisations that dispose of the devices and the service provider. This model provides a financial benefit to the public entities involved in this framework contract, and it provides an incentive for the supplier to prioritise the reuse of devices over recycling. Through this model, the supplier would get money for the refurbishment process as well as for the logistics, while the public organisation would also receive a part of the benefit as the original owner of the equipment.

Results

Economic benefits

The procurement of reuse and recycling services provided several benefits. The joint profit agreement also provides an important potential for reimbursement and financial benefit: the profit from the resale of the equipment is shared between the state-owned enterprise that provides the devices and the supplier. As of the first quarter of the contract, state-owned enterprises were reimbursed a total of over 2 million NOK (equivalent to 171 400 EUR), and an approximate amount of 5 million NOK at the end of the first year of the contract (about 430 000 EUR).

The state-owned enterprises that supply ICT equipment receive dedicated security cabinets for their used items, which are then transported directly to the service provider. Then, specially trained employees, approved for the security measures, meticulously sort and register all incoming equipment. Every unit is labelled with an internal ID number to maintain traceability at every stage of the process.

Environmental impacts

After the first quarter of the contract, more than 15 000 units of ICT equipment were sent for reuse and material recycling to the supplier, and 22% of the state-owned enterprises in Norway have adopted the agreement. Laptops have the highest reuse rate so far - 89%, while for smartphones it is 49%. All adapters, hard drives and other components sent to the supplier have been sent for material recycling.

These findings carry significant implications for CO₂ reduction. During the first year, the agreement has achieved a reduction of 2 000 tonnes of CO₂, with a computer reuse rate of 90%. Additionally, a substantial amount of precious metals, such as gold, have been extracted through material recycling efforts, as well as a great deal of lead, tin, silver, platinum, palladium and indium.

Social benefits

Regarding the social considerations included in the tender, a minimum requirement to employ at least 20% of people with reduced functional capacity was initially established. However, this number was already surpassed by the first quarter of the contract, as 50% of the personnel involved had a disability. Given the number of offers received and this positive result, this example demonstrates that including minimum quotas for the employment of people with disabilities and other marginalised groups is achievable and does not necessarily limit competition.

This ICT agreement was awarded as the Sustainable Procurement of the Year at the Procura+ Conference 2024, held in March in the city of Lisbon. The jury included members from the OECD, UNEP’s One Planet Network, ICLEI Europe and the Fair Trade Advocacy Office (FTAO).

Lessons learned

• The contracting authority realised that it is possible to develop contracts that are economically, socially and environmentally beneficial, both for the contracting authority and for the supplier.
• This contract shows that it is possible to create financial incentives for both the Contracting Authorities and the service providers to prioritise the reuse of ICT devices and thus, extend their lifespan over recycling. These types of contracts could be combined with Extended Producer Responsibility (EPR) policies to ensure that products procured by public authorities are managed at the end-of-phase phase. However, it is important to also encourage eco-design practices to ensure that products are kept in use for as long as possible by Contracting Authorities.
• Still, the development of this kind of pioneer procedure takes time and courage. It is not an easy task to identify the appropriate criteria for such a new type of call for competition.
• Market consultation and dialogue is key. The services that can be potentially offered by suppliers have to be understood, and the call for competition criteria have to consider these limitations (or opportunities). For instance, regarding the low-emission transport in this call for tenders, the contracting authority decided to require the use of cleaner vehicles based on a market analysis, without mandating electric ones, given the type of vehicles used for the service (mainly trucks) and the long distances to be travelled in some regions.
• Support from governmental organisations can help: in this case, the state-owned enterprises can make use of the agreement. Their early involvement in the procedure was key to ensure their engagement throughout the process. In addition, the surveys handed out offered relevant information, in which it was clear that safety and environmental aspects were prioritised over possible financial benefits.

More information

For related information, please see European GPP criteria for Computers, monitors, tablets and smartphones and the Technical Background Report.

Tender documents are available online.