Circular procurement REBMs process
“Sustainability does not have to be expensive.”
Cecile van Oppen, Copper8 (supplier)
By the end of this stage you will have:
Internal and external collaboration is an integral part of all the stages in the procurement cycle and with implementing more circular procurement in particular.
This stage, therefore, emphasises market engagement.
By scoping out spend, current positioning and dynamics of the marketplace, you can start to identify potential suppliers and the degree of competition in the marketplace relative to the scale of your ambition and goals.
How to guide
Developing the business case
The first step is to develop the initial evidence into a detailed business case for changing your procurement model from ‘business as usual’ to a circular procurement model.
This may involve adopting new methodologies to ‘monetise’ benefits and include whole-life approaches such as Total Cost of Ownership. The new EU Procurement Directives encourage the adoption of life cycle costing as part of the MEAT (Most Economically Advantageous Tender) requirements.
The business case might include scenarios for increasing the circularity of the given product or service based on different scales of ambition. These scenarios will bear different costs and benefits and it may be appropriate to consider internal benefits and costs e.g. social benefits, jobs etc., as well as life cycle costing.
Identifying circular products and services
Market dialogue is an important step in identifying the availability of circular products or services available at the current time. It is useful for identifying the type of REBM to adopt e.g. open or restricted procedure, or competitive dialogue, as well as how to best formulate and include circular procurement requirements into tendering processes.
Pre-Commercial Procurement (PCP) and the Competitive Dialogue procedure introduced under Directive 2004/18/EC offer opportunities for public authorities to engage in market dialogue and the procurement of innovation.
The REBus pilots from the Netherlands have demonstrated the value of this approach across textiles, furniture and construction. In addition to assessing the availability of more circular products and REBMs, this dialogue communicates the circular vision of the procuring body. This helps stimulate innovation.
Market dialogue workshops
Consider holding ‘market dialogue’ workshops to test the business case scenarios and identify what the market is capable of delivering now and in the future. The workshops can help your team understand the changes required to implement the circular procurement goal and what impact this will have on competition and the risks.
These workshops can identify the product and service options the market can supply to meet your circular procurement needs. They also stimulate ideas on potential innovation and alternative business models. Suppliers gain insights on the client’s vision, timescales, procurement needs and budget.
The REBus pilots have successfully used market dialogue workshops to communicate their vision and to test the ability of the market to meet it. The Municipality of Amsterdam in the Netherlands extended the market dialogue workshop it conducted for civils and infrastructure projects by creating a Forum for Concrete. The Forum provides a platform for sharing knowledge and the development of more circular options such as the use of recycled concrete.
Identifying suppliers for the pilot
Market dialogue workshops also enable the purchasing body to identify potential suppliers willing to participate in pilots as well as ensuring there is competition. This external engagement is an important factor in determining the pace of change required to sustain a pilot but also the scale-up required across product categories to deliver the full circular benefits of using REBMs.
Assessing the need for a pilot
Having undertaken the necessary engagement – note this may be an iterative process – your team will be in a position to assess whether a pilot may be necessary.
The Dutch Ministry of Defence chose to undertake a low risk small-scale pilot for the procurement of towels before committing to a much larger pilot for the procurement of uniforms.
Similarly, new methodologies like Rapid Circular Contracting, have been developed and applied to small scale catering procurement projects before being applied to the large scale construction projects they were designed for.
Market dialogue workshops are an important mechanism for understanding what the market can offer and how the procurer can potentially influence it.
Case Study examples
Most of the REBus circular procurement examples are relevant to this stage, in particular:
- Rapid Circular Contracting of Beverages, Municipality of Enschede, the Netherlands
- Procurement of towels and uniforms with recycled content. Ministry of Defence, the Netherlands
The case studies will be published on the REBus website as soon as they have been completed.