09/06/2021
The Cabinet Office has issued an action note explaining how suppliers’ Net Zero[1] Carbon Reduction Plans should be taken into account in the procurement of major Government contracts.
The PPN is accompanied by a suite of documents including guidance on applying the PPN, a technical standard for completion of Carbon Reduction Plans and a list of FAQs.
It will take effect for relevant procurements advertised on or after 30 September 2021.
Application
PPN 06/21 applies to all Central Government Departments, their Executive Agencies and Non Departmental Public Bodies. These “in scope” organisations must apply the PPN (taking the action described below) to any contract procured (for goods, services or works) with an anticipated contract value of £5 million per annum or above (excluding VAT) unless the PPN is not related and proportionate to the contract.
The content of the PPN will also be of interest to those suppliers bidding for such Government contracts.
Action required
The PPN states that in scope organisations should include a selection stage criterion which requires suppliers to provide a Carbon Reduction Plan confirming the supplier’s commitment to achieving Net Zero by 2050 and setting out particular details about their carbon footprint.
To facilitate this, the guidance note on adopting and applying the PPN contains standard selection questions which should be used in order to request this information from suppliers (at Annex A) and explains how the responses to these questions should be assessed.
A template Carbon Reduction Plan is also annexed to the PPN and the accompanying technical standard provides additional guidance on the reporting requirements.
Key points
There is a considerable amount of detail for in scope organisations and suppliers to familiarise themselves with in the lead up to 30 September and the FAQs indicate that the Crown Commercial Service and Confederation of British Industry will be hosting webinars and round tables on the topic.
Some of the key points to note include:
- Given that environmental considerations and carbon reduction will be a factor in the majority of contracts, it is expected that in most cases the PPN will be related and proportionate to the assessment of whether a supplier has the necessary technical ability to perform the contract. In scope organisations will need to document a decision not to apply the PPN.
- The standard selection criteria set out in the guidance to the PPN cannot be amended. They are pass/fail (and information only) criteria. It is not expected that suppliers are scored for these questions or that any comparative assessment is undertaken. As with other selection criteria, it is necessary to verify that the successful supplier meets the criteria prior to award.
- Carbon Reduction Plans will be a standard document used for all relevant procurements. It is envisaged that plans will be published on supplier websites (or readily available on request) and should be reviewed and updated annually[2] to reflect changes in organisational structure and to take account of the progress made in reducing emissions.
[1] Net Zero refers to the Government’s target in the Climate Change Act 2008 (as amended) of achieving at least a 100% reduction in the net UK carbon account (as against 1990 levels of greenhouse gas emissions) by 2050.
[2] Within 6 months of an organisation’s financial year-end and approved by the organisation’s board of directors (or equivalent).
