Subject matter: ICT

Environmental and social impacts targeted:

Requiring CO 2 footprints and a Life Cycle Analysis (LCA) calculation for all products,
Inclusion of people far from the labour market,
Respect of international core labour and human rights standards including in the supply chain.

Relevant EU legislation/policy/guidance: Articles 40, 43, 67 and 70 of Directive 2014/24/EU; EU GPP Criteria for computers, monitors, tablets and smartphones (2021); Public procurement for a circular economy (2017).

Background

In 2019, the Dutch central government adopted its procurement strategy called "Procurement with Impact". It has the aim of creating climate neutral business operations by 2030 and making ten business categories circular by 2023, including ICT Hardware, by means of strategic procurement by the central government. This was followed by the adoption of a category plan for the ICT Working Environment for Central Government 2021-2023 as the basis of all the category tenders.

In 2021, in line with the procurement strategy, the Ministry of Economic Affairs and Climate Policy initiated five procurement procedures for the government-wide purchasing ‘Category ICT Workspace Central Government (IWR)’, which includes in its scope all ICT hardware for the national offices and employees of the central government. The five interrelated tenders were for the purchase of: Displays; Laptops & Fixed ICT workstations; Android hardware devices & Accessories; iOS, MacOS, and iPadOS devices; and Workspace Services.

Procurement objectives

The contracting authority (CA) did a preliminary market consultation, entering into discussions with large manufacturers and vendors, to identify which sustainability and circularity goals and requirements would produce an additional impact whilst being accepted by the market. Subsequently, the sustainability, circular and corporate social responsibility (CSR) goals were translated into specific tender requirements.

The CA has been innovative and set a new standard in the field, by applying many elements for the first time in ICT, in The Netherlands (and likely in the EU). The innovations consisted of requiring CO₂ footprints and a Life Cycle Analysis (LCA) calculation for all products. The CO₂calculation from the LCA is directly used as input for theCO₂compensation. Other newly introduced elements were the use of the Fairtrade Climate Standard or equivalent standards/certifications to compensate for all the CO₂emitted by the delivered products, and waste compensation through TCO Certified (the world-leading sustainability certification for IT products, firstly introduced by the trade union Swedish Confederation of Professional Employees, called TCO) Edge E-Waste Compensated or equivalent certification. The contract also required the use of an independent scorecard to encourage resellers, manufacturers and their subcontractors to make their business operations and supply chains fairer and more sustainable. For instance, producers had to meet a minimum threshold to be eligible for a framework contract. All products purchased, excluding accessories, had to be TCO Certified or equivalent, and repairability and the availability of spare parts had to be ensured for at least 3-5 years after the end of sale on the Dutch market. At present, for all new IWR 2023 tenders the CA uses a growth mechanism, awarding companies with higher future ambitions. As from 1st of July 2024 within this scorecard, it will require a minimum score on all specific subthemes as environment, sustainable procurement, ethics, human rights and labour, to support a balanced approach toward suppliers and the supply chain.

Tender requirements

The five tenders included the use of green and social criteria in technical specifications, award criteria and contract performance conditions, as well as the use of labels, which varied from one tender to the other. On average, there were 75 technical specifications and award criteria in each tender (focused on sustainability). Price vs. quality was 50/50 on a scale of 2000 points. The quality aspect (sustainability in this case) had on average a total of 795 points which equals on average to 40% of all points. The minimum is due to different combination of criteria not representative and is always way higher than 465. Below is the range of award criteria that was used in the five tenders to ensure sustainability (ranging from a minimum of 46,5% of the total points to a maximum of 79,5% of the total points):

Energy: was weighted from 1,5% to 4,5% of the total points
CO2 compensation: from 7,5% to 22,5% of the total points
ISO type 1 ecolabel: from 10% to 15% of the total points
Battery SOH: from 5% to 12,5% of the total points
Packaging: from 2,5% to 5% of the total points
Reinstatement devices 2nd life: 10% of the total points
Disassembly and recycling: 10% of the total points.

The main elements are summarized below:

Sustainable and circular ICT equipment

The CA used a variety of technical specifications and award criteria mainly related to energy use, climate change impacts and circularity of materials. A general environmental criterion used was that the products had to be provided by companies that have an environmental management system (ISO 14001 certificate, EMAS certificate, or equivalent).

Aside from requiring that the transport and delivery of products be carried out using a CO₂ efficient mix of transport options with additional CO₂-neutral and Zero-emission transport, all products had to comply with the latest Energy Star criteria for energy performance. Power supplies for desktops and workstations had to meet the energy performance standards set by the 80 PLUS Gold label, equivalent or higher standards. In addition, displays also to comply with the EU Energy label. There were two major innovations which were introduced. One was requesting a life cycle assessment (LCA) of all the products within the scope of this tender, except for accessories, which had to include a quantification of the global warming potential (expressed in emissions of CO₂equivalents), following the guidelines of the Greenhouse Gas Protocol: 'Product Life Cycle Accounting and Reporting Standard'. The second foresaw that all delivered products (excluding accessories) had to be 100% offset through the Fairtrade Climate Standard or equivalent, whereby the compensation projects must be linked to at least three related Sustainable Development Goals (SDGs).

The CA also aimed at boosting circularity by requiring:

Essential components of computers, laptops, tablets, displays and mobile phones to be replaceable based on the 'EU GPP criteria for computers and displays 2016'.
The availability of spare parts for at least five years to be demonstrated by a certificate of an ISO Type I eco-label.
All batteries to have 60% of their original capacity after 300 charging cycles.
The possibility for the public authority to be offered reused, refurbished, remanufactured or similar products upon request and, if the products are leased, that at least 80% are returned for a second/third life.
All products to contain an average of at least 10% of post-consumer recycled plastics and, where cardboard boxes are used for packaging, to consist of at least 80% post-consumer recycled cardboard.
Where non-biobased plastic film or sheets are used for packaging, to include at least 75% recycled material. All products (excluding accessories) to be mandatorily TCO Certified which is at the moment the only worldwide independent certification for e-waste compensation mechanisms that are reliable, verifiable and credible.

Finally, regarding chemicals and health, to ensure the general compliance with applicable legal requirements, including the REACH and RoHS legislation.

Social responsibility criteria

The Contractor applies a standard of 5% social return (SR) on the Wage Sum for the execution of the contract. SR includes the beneficiaries of specific Dutch Acts on work, social assistance, disability and income support, such as people who have been unemployed for more than 12 months, etc. For the IWR2021 Services contract, award criteria assigned increasing points for each additional percentage point of social return, from a minimum of 6% to a maximum of 10%. The Contractor also had to submit a plan of an approach describing how this requirement would be fulfilled no later than three months after the framework agreement's signature date.

Labour aspects in the supply chain

Through a process of due diligence, tenderers had to commit, as part of contract performance clauses, to the respect of the following international labour standards and human rights, including in the production chains of government suppliers:

Core labour standards, as set out in the International Labour Organisation (ILO) conventions on the abolition of forced labour and slavery (29, 105), abolition of child labour (138, 182), freedom from discrimination at work and at work (100, 111), freedom of association and the right to collective bargaining (87, 98).
Human rights from the Universal Declaration of Human Rights (UDHR) and elaborations thereof in binding treaties, which are labour- and business-relevant.

In addition, the contractor had to provide, no later than 3 months after the first contract awarded under the framework agreement, a production chain risk analysis which included its own CSR policy, a description of the chain from the production process to at least final assembly, and an analysis of the risks of labour and human rights violations in the chain. Within 6 months from the first assignment under the framework agreement, a plan of action to mitigate risks had to be provided by the contractor.

The contractors could use EcoVadis to prove that the above-mentioned requirements were met. EcoVadis is built on international sustainability standards, including the Global Reporting Initiative, the United Nations Global Compact, and the ISO 26000. The Sustainability Scorecard illustrates performance across 21 indicators in four themes: environment, labour and human rights, ethics and sustainable procurement. The CA can monitor the scores and sub-scores in an online portal.

Results, social and environmental impacts

The five tenders intended to establish a framework agreement each, with up to three (minimum two) contractors. In total 12 framework agreements were awarded for a total value of 474 million euros, each with a maximum duration of 4 years (2 initial years and 2 years of renewals). They all conformed to all the sustainability requirements and award criteria. Contractors were Dutch SMEs although some were part of German, British or Swedish holdings. After the framework agreements were concluded, specific contracts were assigned based on mini competitions, in which bidders had to meet the specifications related to the products tendered, as well as the requirements of the framework agreements.

Regarding the year 2021, the five IWR2021 Workplace Hardware Agreements have led to:

Approximately 17% CO₂ reduction compared to 1990 for all five agreements.
3,36 K tonnes of CO₂ has been compensated through Fairtrade Climate Standard credits via projects in Burkina Faso, India and Rwanda.
All 13,527 purchased laptops, tablets and smartphones were certified as e-waste neutral by TCO Certified E-waste Compensated. This led to 4,400 kg less e-waste, 46 tonnes of CO₂ reduction and recycled raw materials (gold: 1.5 kg, copper: 5,700 kg, silver: 15.5 kg and palladium 600gr)
The lifecycle of the purchased ICT products was extended to a minimum of 4 years up to 10 years, depending on the product.
Strong increase of EcoVadis scores of resellers from 3% up to 34%.
Minimum Ecovadis score for manufacturers' products to encourage them to a more sustainable production and supply chain and increased chain responsibility (CSR) and excluding manufacturers who don’t meet the standards of the Dutch Government.
Depending on the scope of the tender, the percentage of the social return achieved ranged from 5 to 10%.

Moreover, since 2021, the CA has received considerable visibility from their contracts and from winning the Procura+ award for innovation in 2022. It is currently sharing its experiences and developing successful collaborations at national, EU (Sweden, Denmark, Italy, Spain and Germany) and international level (Canada, Singapore, United Kingdom, Switzerland and Norway).

Lessons learned

Building up expertise on market knowledge for sustainability and circularity is crucial. The CA got involved with the market early during a preparation period that ran for over a year. Simultaneously, It worked with a professional and positively critical strategy group consisting of representatives of the major governmental ICT System Integrators (government-owned IT organisations), which supported the ambitions in terms of sustainability from the start.
A preliminary market consultation was also important. Entering into discussions with large manufacturers and vendors, to investigate which goals and requirements regarding sustainability and circularity would produce an additional impact whilst being accepted by the market was key. The continuous support by the steering committee and the strategy group was an added value
Market involvement, engagement and transparency have led to overcoming all challenges and to a successful procurement procedure. It is worth noting that, despite the size of the procedure and the complex innovative character, it has not led to any legal proceedings. The CA experienced full large-scale support from the entire ICT market.
The CA is currently updating the criteria and procedure for the next period based on the feedback received from contractors.

More information

Ministry of Economic Affairs and Climate Policy

Contact person: Johan Rodenhuis

Tender documents available online.

Sustainability and circularity as a starting point for ICT procurement