Procurement can play a crucial role in identifying opportunities for improvement in the way an organisation is run. As well as providing better profitability for the organisation, the chance to influence the behaviour of suppliers in a positive way presents itself to procurement officers who will often have control over spending many millions of pounds.
The National Strategy for Local Government Procurement defines procurement as:-
"'Procurement' is the process of acquiring goods, works,and services from third parties. The process spans the whole life cycle from the identification of needs, through to the end of a services contract or the end of the useful life of an asset. It includes options appraisal and the critical "make or buy" decision.
In the context of a procurement process obtaining "best value for money" means choosing the bid that offers "the optimum combination of whole life costsand benefits to meet the customers requirement."This is not the lowest initial price option and requires assessing the ongoing revenue/resource costs as well as capital investment. The council's requirement can include social, environmental, and other strategic objectives and is defined at the earliest stages of the procurement cycle. The criterion of best value for money is used at the award stage to select the bid that best meets the requirement." What is Sustainable Procurement?Sustainable Procurement includes environmental or "green" procurement issues but it is broader than this. It also includes social, ethical and economic considerations. So while issues such as the protection of the rainforests and levels of pollution in the water and air are important issues for consideration in sustainable procurement a number of other ethical issues are also important. The use of child labour and working conditions need to be considered and where possible influence brought to bear to eliminate bad employment practices. The creation of jobs and the regeneration of run down areas should be examined and opportunities identified in the procurement process to make a positive impact in this area. Ethnic Minority Businesses (EMB's) and Small and Medium sized Enterprises (SME's) can be encouraged in the procurement process to bring about social and economic benefits to less advantaged sectors of society. On a world wide scale terms of trade between wealthy countries and trading blocks and the less developed countries of the world offer opportunities to address the huge inequalities of wealth which exist between people in different parts of the world.