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Local procurement and supply chain toolkit

Local procurement and supply chain toolkit
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The purpose of this toolkit is to provide SMEs with practical guidance to increase their chances of accessing and winning tenders from large public and private sector organisations, particularly in the growing energy efficiency and renewable energy markets. It is also designed to share best procurement practice among public and private sector buyers on how to create opportunities for ‘local’ SME suppliers from their low carbon investments.

Applicability

The toolkit focuses particularly on the market opportunities emerging for local SMEs and economies from the new ’green’ sectors (particularly onshore renewable energy and low carbon building retrofit). While the opportunities are substantial there are still considerable obstacles for SMEs to navigate if they are going to realise their full potential, including:

  • complex and formalised buying processes and regulatory frameworks (particularly in the public sector) that mitigate against contracting with local SME suppliers
  • danger that new government-sponsored schemes, such as Green Deal and the Energy Companies Obligation (ECO), will be dominated by large delivery organisations – given the financial and regulatory costs and obligations associated with this – and that large numbers of local SMEs may therefore be excluded or commercially squeezed in the supply chain
  • a lack of capacity and experience within SME suppliers to navigate and adhere to complex commercial and collaborative agreements
  • limited knowledge-sharing and coordination between large procurers and SME suppliers operating in the developing ‘green’ market areas
  • a lack of knowledge and readiness among SMEs generally to compete effectively in the new ‘green’ markets against large organisations, given that these opportunities require higher levels of technical, commercial and delivery competence (and stricter accreditation) than has been the case in their traditional markets
  • a lack of knowledge and confidence among public and private consumers about which ‘green’ technologies and design solutions provide best value, which will in turn delay market expansion and confidence in smaller suppliers.

It is intended that this toolkit will help to overcome these and other barriers faced by SMEs in trying to access opportunities from large buyers in the public and private sectors.

The toolkit is focused on the South East of England region. However, many of the challenges, opportunities and guidance provided here are common to, and applicable to, all local areas of the UK, and may be useful for consideration for the rest of Europe as well.

Process of tool application

The toolkit consists of six chapters:

  1. Introduction: description of the main aims of the toolkit and an initial overview of policy drivers, incentives and market.
  2. Investment and procurement, the local picture: How-procurement friendly are public and private sector buyers towards local SMEs, specifically in the South East of England.
  3. Local low carbon sectors and supply chains: Definition of the low carbon sector and details on specific sub-sectors, their market background, main customer types and procurement models (drawing on detailed research in the South East of England).
  4. Winning business in the low carbon sector: A series of tools and tips to help SMEs with public and private sector tenders and improve their chances of winning contracts.
  5. Local procurement implementation tools: Guidance for buyers on developing a local procurement strategy, and the mechanisms for embedding local procurement into their larger contracts.
  6. Case studies: examples of good rpactice in developing the local economy from a local authority, a social enterprise and a business support project.

Link

The Local Procurement and Supply Chain Toolkit is available on the website of the Institute for Sustainability: http://procurementtoolkit.instituteforsustainability.org.uk/

The Institute for Sustainability has also published the related Renewable Energy Toolkit.