4. SUSTAINABLE PROCUREMENT FAQ's
How does Sustainable Procurement Work?
VicRoads’ sustainable procurement mechanism uses an additional contract schedule, where tenderers can indicate how sustainability will be delivered within their tender through the delivery of initiatives involving the use of sustainable materials and technologies. This schedule will form part of the evaluation of value for money within the tender and will carry a weighting of up to 5%.
Value for money will be assessed by a relative evaluation of the sustainability benefits of a tender against the least sustainable tender to determine the additional benefit of your tender. This additional benefit will then form a basis to evaluate their value as a function of the lowest conforming tender price. Table 1 shows an example evaluation where Tenderer B is seen as the best value for money, even though it is not the cheapest tendered price.
Table 1: Assessment of Value for Money Using Sustainability Attributes
 | Tenderer A | Tenderer B | Tenderer C |
| Sustainability Attribute Score (SAS) % | 3.40 | 2.50 | 1.16 |
| Relative Difference from Lowest SAS (RD) | 2.24 (3.4 – 1.16) | 1.34 (2.50-1.16) | 0 (1.16-1.16) |
| Tender Price (TP) | $16,600,000 | $16,100,000 | $15,900,000 |
| Sustainability Benefit (SB) (RD/100*Lowest Conforming TP) | $356,160 | $213,060 | $0 |
| Adjusted Tender Price (TP – SB)) | $16,243,840 | $15,886,940 | $15,900,000 |
It is important for contractors to understand that with the implementation of the sustainability attributes mechanism, the lowest cost conforming tender price may not be engaged by VicRoads. A tenderer with a higher price, which has been evaluated as the best value for money may be engaged instead. There are two components of the sustainable procurement model, which combine to give the Sustainability Attribute Score. These are
pavement materials and
other sustainability initiatives.
Pavement materials evaluates the level of virgin material replacement through the use of recycled materials such as Reclaimed Asphalt Pavement (RAP), glass fines or other substitute materials. It also evaluates the use of additives to reduce the required energy consumption (i.e. Warm Mix Asphalt). Both of these contribute to a reduction in the greenhouse footprint of the pavement materials.
Other sustainability initiatives include a broad range of other initiatives. Standard specifications allow the use of sustainable materials in some non-pavement materials, such as stormwater pipes or cement used in kerb and channel. However, this is not always the case as road furniture such as sleepers and bollards or seating can be made from recycled materials but without the same specifications. This also extends to the use of technologies that offer reduced energy consumption including LED street lights, the use of voltage regulation electronics in street lighting and operational renewable energy such as solar panels. The assessment of these would be at the discretion of the assessment panel who would consider the following factors for the proposed initiative relative to the standard product:
· whether the product is permitted by VicRoads specifications (if relevant)
· the capital, operating and replacement cost of the product within the project
· the appropriateness of the proposal
· maintenance costs (if any)
· service life of the item
· operational energy savings (if any)
· prior use and experience elsewhere.
Contractors are encouraged to ensure that their tenders conform to VicRoads specifications where relevant, especially for areas such as pavement materials and drainage. To assist with this, contractors should understand the implications of the pavement rating system once it is published.
What is the pavement rating system?
We identified through the development of the system that we needed to develop a common understanding between tenderers, material suppliers and VicRoads regarding the sustainability of pavement construction materials. As such the pavement rating system was developed. The main benefit of this system is that once understood, it allows tenderers to commit to a level of sustainability without having to hold detailed pricing negotiations with the material suppliers until the contract is awarded.
It will however, still require the material suppliers to consider the potential sources of material supply for a given contract to ensure the committed outcome is able to be delivered. This system is shown in the table below.
*There is also an opportunity for mixes to elect to utilise an additional 10 percent of RAP, where the tender response has integrated the additional testing requirements as per Hot Mix Specification section 407.09 (c). These will receive an additional 2 rating points for the pavement types and layers with the additional RAP.
Do I have to complete the additional contract schedule and do I have to include the initiatives in my tendered price?
No, it is the tenderers choice whether to complete the schedule and include sustainable initiatives. However, given that there is a weighting of up to 5% on sustainable procurement a tenderer who does not utilise it will likely be disadvantaged during tender evaluation.
Would I gain any benefit proposing more sustainable materials than the specifications allow?
Guidance on this is provided within the sustainable procurement schedule in the tender documentation. Tenderers must conform to the relevant VicRoads specifications. Initiatives nominated which do not comply with the VicRoads specification will not be able to be considered. It is understood that some initiatives will not be covered by VicRoads specifications, and when unsure tenderers are encouraged to enquire with the VicRoads project personnel.
Tenderers may elect to nominate mixes with additional levels of RAP, and this will require additional testing to be conducted as the per requirements of Hot Mix Specification section 407.09 (c ), and this will need to be addressed within their tender response. This will receive an additional 2 rating points for the pavement types and layers as nominated in this schedule (i.e. up to a potential 12 points for hot mix and 14 points for warm mix).
Why isn’t Sustainable Procurement applying to all VicRoads construction contracts?
VicRoads recognises that there is an amount of work associated with completing and evaluating the sustainability attributes. As such it is only being applied where VicRoads believes it will be an effective and efficient way of integrating sustainability into contracts. Initially this will be in design and construct contracts valued at over ten million dollars. The inclusion of sustainability in construct only contracts and alliances are still being investigated.
Why is VicRoads making more work for the tenderers?
VicRoads has investigated a number of ways to integrate sustainability into its construction activities. In doing so it believes that the best way of doing this is through integrating them into the procurement process, and assessing them through a sustainable procurement mechanism to determine the best value for money.
In developing the sustainable procurement mechanism, VicRoads has been mindful of minimising the amount of additional work it will require of tenderers. An example of this is the pavement rating approach which allows tenderers to nominate and commit to a level of pavement sustainability without having to hold detailed discussions with material suppliers and negotiate prior to the award of contract. This has benefits for tenderers in that it is a standardised approach to be evaluated consistently within VicRoads construction contracts.
What initiatives are likely to be successful?
It is a requirement that initiatives comply with VicRoads specifications where they exist; however, VicRoads will consider initiatives where specifications do not exist, and encourages tenderers to leverage their experience and knowledge in proposing new initiatives. The following information is provided to help guide tenderers thinking.
VicRoads receives a large number of requests to incorporate new and innovative materials and technologies within construction, maintenance and safety improvement activities in the road network. These activities range across the developmental spectrum from research and development to demonstration to commercialisation. However, given the risks associated with their use, VicRoads interest generally lies in reasonably mature technologies.
Whilst “blue sky” initiatives undoubtedly have some merit for further development and trial at the appropriate time, significant opportunity exists to incorporate sustainability within VicRoads’ current specifications for pavements and other types of road infrastructure (such as drainage). In a number of instances, these opportunities have existed for a period of time without being utilised in construction contracts. As such, the decision was made to leverage the potential within existing specifications, given the constraints associated with approving new products and developing new specifications. Details on the range of permitted sustainable materials are contained within VicRoads Technical Note 107.
Are there worked examples I can use?
Some worked examples of sustainability attributes are available on Sustainable Procurement page of the VicRoads website.
Why isn’t the sustainability attributes mechanism being used for more categories?
VicRoads considered a number of categories for inclusion in sustainability attributes. However VicRoads has decided to initially use a smaller suite of categories. It is possible that these will increase through time.
Why won’t VicRoads provide a list of initiatives?
VicRoads will provide general information on the types of initiatives it sees value in, however, sustainability initiatives will continue to evolve and VicRoads preference is for tenderers to provide initiatives that they feel are pertinent to a given project.
Why did a tenderer receive the contract who didn’t have the lowest price?
The VicRoads sustainability attributes mechanism assesses the tenderers value for money, using up to five percent weighting on the sustainability component. As such it is possible that a tenderer which is not the lowest price adds sufficient sustainability value to be the assessed as the best value for money.
Why is VicRoads asking for more information than other agencies?
New Zealand, Queensland and South Australia also have non-price attribute systems in place. VicRoads’ sustainability attributes mechanism is similar; however, it is making a far more quantitative assessment of tenders. As such it needs data to make these assessments. It is VicRoads understanding that other road agencies are working to achieve similar outcomes and as such will also require additional information.
How is VicRoads utilising the information?
VicRoads is using the information provided in the completed sustainability attributes schedule to assess the sustainability of the tender responses. This information along with the tender price is then assessed against the equivalent information in the other tenders to determine which provides the best value for money.