New PPN’s Published; National Procurement Policy Statement & Taking account of Carbon Reduction Plans
The fifth and sixth Procurement Policy Notes of 2021 have been published.
PPN 05/21 applies to all contracting authorities.
PPN 05/21 provides information and guidance on the National Procurement Policy Statement (NPPS) which will require contracting authorities to have regard to national strategic priorities for public procurement.
As you will know, the current procurement rules are undergoing legislative reform. PPN 05/21 advises contracting authorities to prepare for the reform by ensuring that they have the right procurement capability and capacity to benefit from any changes. This includes considering annual benchmarking against relevant commercial and procurement operating standards and other comparable organisations.
The Government intends to bring forward legislation when Parliamentary time allows to ensure that:
- all contracting authorities are required to have regard to the National Procurement Policy Statement when undertaking procurements;
- contracting authorities with an annual spend of £200million or more are required from April 2022 to publish procurement pipelines and to benchmark their procurement capability;
- contracting authorities with an annual spend of £100million or more are required from April 2023 to publish procurement pipelines and to benchmark their procurement capability.
PPN 05/21 encourages contracting authorities to do the following
- Familiarise themselves with the contents of the NPPS;
- Begin to consider national priority outcomes (such as creating new businesses jobs and skills, tackling climate change and reducing waste, and improving supplier diversity) alongside local priorities
PPN 06/21 applies only to Central Government Departments, their Executive Agencies, and Non-Departmental Public Bodies. For example, it does not apply to NHS Trusts or Foundation Trusts.
PPN 06/21 sets out how the UK government’s Net Zero Carbon Reduction Plans can be taken into account when procuring major government contracts.
The PPN should be applied to procurements advertised on or after September 2021, for goods, services, or works with an anticipated value above £5million per annum, unless it would be irrelevant or disproportionate.
The relevance of the PPN is to be assessed on a case by case basis, however, it is expected that it will apply in the majority of cases. The note outlines some particular circumstances, but these are not exhaustive:
- Contracts which have a direct impact on the environment
- Contracts which require the use of buildings by staff
- Contracts which require the transportation of goods or people
- Contracts which require the use of natural resources.
As part of the selection criteria for these procurements, suppliers should be required to submit a Carbon Reduction Plan as part of the selection criteria for technical and professional ability.
The Carbon Reduction Plan should do the following:
- Confirm the supplier’s commitment to achieving Net Zero by 2050 for their UK operations
- Provide the supplier’s current emissions for the sources included in Scope 1 and 2 of the GHG Protocol, and a defined subset of Scope 3 emissions
- Provide emissions reporting in CO2e (Carbon Dioxide Equivalent) for the six greenhouse gases covered by the Kyoto Protocol4
- Set out the environmental management measures in effect, including certification schemes or specific carbon reduction measures they have adopted, and that will be able applied when performing the contract and how that support will achieve Net Zero by 2050.
The Carbon Reduction Plan should also be published on the supplier’s website.
Those affected by the contents of this PPN should ensure that future procurements with an estimated value above £5million per annum request and take into account Carbon Reduction Plan’s. In doing so, the principles of transparency, equal treatment and non-discrimination should be applied.
Hempsons’ specialist procurement team can advise you on the issues raised within these PPN’s or any other procurement issues.
Click here to read the PPN’s in full