The new rules that must be followed to actually win Australian Government tenders
Australia has committed to reducing national greenhouse gas emissions to net zero by 2050. It is also transitioning into a circular economy, meaning, products will need to be either recycled, remanufactured or re-used even after they have been used previously. The shift towards a circular economy that re-uses goods, and journeying to net zero has specific consequences for goods and services. Therefore, the government has introduced an Environmentally Sustainable Procurement (ESP) Policy which facilitates and assists in decision-making in order to allow the government to more easily determine environmental outcomes for procurements by devising a reporting framework. The new ESP Policy serves the purpose of improving environmental sustainability across three main areas – climate, the environment and circularity.
All this sounds easy on paper, however some businesses are finding it difficult to navigate the the new procurement requirements. So let us break it down.
What do governments require for tenders?
The government will require:
Supplier Environmental Sustainability Plan (SESP)
The construction services reporting requirements, including whether you need to either:
Contribute to or complete a sustainability rating for the project
Report against alternative base metrics
The Reporting template
Supplier Environmentally Sustainability Plan
If you are tendering for procurements covered by the ESP Policy, you must complete the Supplier Environmentally Sustainability Plan (SESP), and you will need to address:
How environmental sustainability will be optimised
How opportunities for innovation will be considered
Environmental sustainability impacts associated with your business
The reporting requirements as selected by the procuring agency
It must be noted that the SESP will form part of the contract once the contract is awarded, with the reporting required to be reported against the reporting template. The metrics must include:
Demonstrating environmentally sustainable outcomes (which can be found in the ESP Policy Reporting Framework)
There are two options in reporting:
Obtaining a sustainability rating for the project
This depends on the type of construction and it may necessitate suppliers to report on innovation
Providing base metrics on the project (where the sustainability is not set). The base metrics will include:
Waste diverted from landfill
The use of recycled content materials
The use of low embodied emissions materials or if you must achieve a NABERS Embodied Carbon Tool rating (when available), you must provide your certification at the end of the project.
Innovation
The Government’s Environmentally Sustainable Procurement (ESP) Policy
As of now, the ESP Policy commenced on 1 July 2024, with the second phase due to commence 1 July 2025.
The ESP Policy will be measured against three performance indicators:
The extent to which greenhouse gas emissions are minimised
The extent to which there is an increase in the use of circular economy principles
The number of Suppliers who are contracted to provide goods and services to the Australian Government that have a Supplier Environmental Sustainability Plan (SESP) in place
Who does the ESP Policy apply to?
The ESP Policy applies to four procurement categories which will be phased in, in the next 2 years:
Construction services
Furniture
Fittings and equipment
ICT goods and textiles
It must be noted that existing contracts or deeds of standing offer that are in place prior to 1 July 2024 or 1 July 2025 will not change.
What kind of factors will be considered by the government?
Where appropriate, officials will consider environmental factors and efficiency targets when defining a procurement such as:
Energy consumption
Greenhouse gas emissions
Climate change impacts
Reduction of waste
Use of recycled products
Reduction of hazardous substances (RoHS)
Packaging and
End-of-life recycling
These specific things are where Carbon LCA Certified comes in. We deal with this part, so you can submit your tender correctly and (hopefully) win one for your business.
The specifics of the government ESP Policy
Under the ESP Policy, certain procurements must achieve climate, environmental and circularity outcomes. These procurement categories are:
From 1 July 2024
Construction services procurements (with an estimated value at or above $7.5 million)
From 1 July 2025
Textiles (with an estimated value at or over $1 million)
Furniture, fittings and equipment (with an estimated value at or over $1 million)
Information and communication technology goods (with an estimated value at or over $1 million)
Why implementing sustainability is good for your Business?
Complying with the ESP Policy in order to secure government tenders
Thinking about your products environmental sustainability
Marketing your sustainability plan
Opportunities for small and medium sized enterprises (SMEs) securing commonwealth contracts
Creating competitive edge
Achieving value for money
Suppliers should offer environmentally sustainable options
Helping drive Australia’s transition to a net zero and a circular economy
The new procurement laws ensure what is good for your business, will now be good for the environment too.
What will the government look for when choosing tenders?
Value for money is the core principle underpinning Australian Government procurement. However, when conducting a procurement assessment, the government must ultimately consider the benefits of all relevant costs and benefits over the entire life of the procurement, specifically environmental sustainability of the proposed goods and services and climate change impacts.
Sustainable procurement practices can be shown by:
Strategies that reduce demand or unnecessary consumption and end-of-life disposal
Considering future sustainability issues and policies in the planning process (such as higher energy costs and energy intensity targets)
Encouraging sustainable solutions and innovation in tenders
Considering climate change impacts of procurements and
Measuring and improving sustainability throughout the life of the procurement
What can you do to demonstrate sustainability to the government?
If your organisation seeks to obtain a government tender, then a globally recognised carbon emissions certification will help you tick the boxes for sustainability outcomes. You do not require many different certifications, you only need one. A Life Cycle Assessment (LCA) is the best way to determine your carbon footprint, please visit our LCA Certification Webpage, and we will help you on your journey to sustainability, through a complimentary LCA scoping session.
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